Equity was a parallel legal system developed in the United Kingdom starting in the 15th century. It was first developed to deal with injustices in the common law, but by the 19th century, it too was bogged down in procedural and resource issues that made it largely ineffective. In the late 19th century, most common law jurisdictions in the United Kingdom, the United States, Canada and the commonwealth merged the two court systems. However, a distinction is still made in a few jurisdictions, most notably, the state of Delaware.

When the common law courts were developed, they depended on a strict set of precedents and a limited set of remedies, largely limited to the payment of damages and writs for possession of property.

By the 15th century, it was clear that the strict application of common law was usually inequitable in the circumstances, or the remedy granted by the court was completely inadequate. Technically, the sovereign still had the authority to overrule a court of law, and by the 15th century, this authority was delegated to the chancery. The chancery effectively became the first court of appeal in the United Kingdom and developed new remedies, most notably the injunction and specific performance, which were not available under common law.

In the mid-16th century, the chancery was strengthened when what could be described as the first trusts to avoid estate taxes were developed. The common law refused to recognize the rights of the beneficiaries of these trusts and left the use of an estate's land in the exclusive hands of the trustee. However, equity did recognize such trusts creating a distinction between "legal" property interests and "equitable" property interests. This distinction was later recognized by the development of the mortgage.

The chancery soon became a court of original jurisdiction instead of just an appeal court. The lawyers who were allowed to appear there were the solicitors. However, as both court systems became more and more separate, even experienced lawyers soon became confused about what types of claims could be brought in which court. Moreover, procedure in chancery was truly byzantine and many claims with merit could not be pursued either due to minor defects in pleading or the lengthy delays in waiting for a trial. Delays of years or decades were common, particularly in complicated estates cases.

In the late 18th century, the United Kingdom passed the Judicature Act which did away with the original juridiction of chancery and transferred all new cases to the common law courts. The Act also put equity precedent ahead of common law precedent where the two conflicted.

Although equity and common law are now merged, old rules regarding equity are still maintained, such as the need for good faith when pursuing remedies in equity.