What is the Court of Equity?

January 31, 2020


In this video, you will get answers to these questions:

  • What is the court of equity?
  • What is the history of the court of equity?
  • How is the court of equity used today?
  • What does it take to be an effective litigator?

Video Transcript

What is the court of equity? That’s what I’m going to answer today. I’m Aaron Hall, a business attorney in Minneapolis, Minnesota. The court of equity is a term that you may not have heard before. In fact, I don’t think I had heard it until I showed up at law school, and one of my first reading assignments in civil procedure was on the history of the court of equity and the court of law.

Let me give you a really high level of how this works. Before the United States and its legal system was established, over in the UK, there was a court of law. These are judges who had the authority to decide who was right and who was wrong, but they didn’t always get it right. And so what would happen is, if you were in a dispute with somebody, and the court of law got it wrong, you could go to the court of chancellery or the court of equity. Essentially it is the ecclesiastical or religious leaders in the Catholic church. And to kind of say this roughly, the leaders of that church could pronounce a ruling, and if the parties didn’t honor that ruling, they may have some risk of not going to heaven or going to hell or at least some eternal ramification. And so the people at that time had great motivation to follow the direction of the ecclesiastical leaders, the priests if you will, the chancellery. So that is the Genesis of the court of law in government and the court of equity or the court of chancellery.

Now the United States, in every court, has those two courts merged, which means there are not two judges, you don’t have two separate courtrooms, one of law and one of equity or chancellery. They’re merged in the United States, which means every judge is making decisions regarding what is right under the law as well as what is right based on a sense of justice, fairness, and equity. That is very interesting because what it means is that judges can set aside the law to do what is equitable and right according to the judge.

Now, as you might imagine, this causes consternation among people who would like predictability with the courts. We all assume judges are just going to apply the law, but judges are also interested in justice and laws are not always just, and so whenever I’m looking at the legal analysis of an issue, as an attorney, I’m also thinking about the equitable analysis of an issue because what you find is that, when something seems grossly unfair or unjust, judges will sit in a court of equity or they will make a pronouncement as the judge in equity.

I one time worked with a judge, federal judge appointed by President Ronald Reagan, and I asked that judge, “How is it that you made a decision to do something that was never done prior in the law?” In other words, there was no precedent to it, there was no case law supporting it, there was no legal authority saying the judge could do this. And the judge quite simply said to me, “I was in a court of equity. I was sitting in equity.” The judge didn’t have to say anything more. I knew exactly what that meant.

It doesn’t matter what the law says, the judge has the authority to pronounce an equitable decree to declare justice, even if such justice is not permitted in the law. Now of course the case can be appealed to the United States court of appeals in this case, and in fact, it was, but the bottom line is courts sit both in a court of law, applying the law, and a court of equity, applying equity or justice. So what is court of equity? It is the consideration that judges may set aside the law and make sure that justice prevails in the judge’s decree. One litigator who worked for a large, famous law firm in town, I asked him one time, his name is Roger Magnuson, I said, “What does it take to be an effective litigator?” And he said, “You need to speak to the judge’s mind, their brain, and their heart, their feelings, their sense of justice, their emotions.” And so if you think about it, we’re dealing with the legal analysis and then what feels right from that innate sense of justice.

So there you have it. That’s a summary of the history of the court of equity and how it is used today. For more information on similar topics, please see the description below and there’s a link to aaronhall.com. If you like these kind of educational videos, you’re welcome to subscribe. And please don’t forget, this is not a substitute for legal advice in your particular circumstances. I do these general educational videos to highlight big issues and help educate members of the public, but there’s an important disclaimer in the description below. Until next time, thanks for joining me on this video today.

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