Abstract
Those familiar with the prominent and prolonged ‘fusion’ and ‘conscience’ debates in Equity might consider both somewhat stale. Nonetheless, neither topic will likely fade away in the foreseeable future. In Equity: Conscience Goes to Market, Irit Samet revitalises the ‘pro-equity’ and ‘pro-conscience’ sides of these debates. In doing so, she stimulates thought about both ‘conscience’ and the ‘market’, and relationships between them, opening avenues for critically assessing Equity’s role in societies that have common law systems.
Sceptics of Equity’s ‘conscience’ fear that such an indeterminate concept invites judicial capriciousness (Birks, 1996: 18). Fusionists deem it insufficiently distinctive to justify Equity’s separate existence, especially at the expense of ‘horizontal justice’ or like cases being treated alike (Worthington, 2006: 325). Samet contextualises these criticisms with pillars of the ‘Rule of Law’ (ROL), particularly ‘generality’, ‘prospectivity’ and ‘clarity’ (pp. 19–26). Rather than mandating menace and mayhem, the mild degree to which Equity compromises these values complements the ROL aim – of suppressing arbitrary exercise of power from the state – by disallowing the same from private and non-state entities (p. 73). Private power that manifests in the market might stem from, inter alia, one’s ownership of property or occupancy of a position of trust. How can the law cast a net sufficiently broad to apprehend abuses of such power which are often difficult to define or detect?
Samet theorises that Equity does so by equipping courts with moral principles and language in pursuit of ‘Accountability Correspondence’: When legal rules impose liability it should ideally correspond to the pattern of moral duty in the circumstances to which the rules apply. (p. 28)
The equitable response to the first of these examples is the subject of Chapter 2, ‘Proprietary Estoppel’. Samet argues that, in this highly factually sensitive context, ‘no set of [preconceived] rules’ will always calculate an appropriate solution (p. 102). Rather, the flexible conscionability test can hit ‘the nuanced point of equilibrium between respect for the formal requirements of property law and the need to do (and be seen to do) justice’ (p. 103). A negotiating party might encourage pre-contractual investment from the other, then ensnare them in a ‘hold-up’ trap where the former ‘may take advantage of the situation and set up the price to just below the point where [the latter] will prefer to give up the sunken cost of the investment and cut their losses’, with the ‘adjusted price’ being ‘calculated…to siphon all the surplus benefit from the investment’ (p. 87). Also, thorny family farm disputes may leave decades of labour unremunerated (pp. 100–103). Such scenarios exemplify the benefit of leaving an expansive scope of conscience-based principles available for areas of life where a rule-based mentality tends to obstruct judges from tailoring just outcomes. In a system in which judges are vested with a responsibility to shape law according to justice, conscience-based principles remind them to actively engage moral reasoning when necessary.
Equity’s characteristic pursuit of Accountability Correspondence is apparent even where standards have ‘crystallised’ into a strict rule, such as the loyalty demanded from fiduciaries (p. 148). Samet discusses this in Chapter 3, ‘Fiduciary Law as Equity’s Child’. Moral language here performs an expressive task, harnessing sentiment to develop ‘a virtue of loyalty’ (p. 139; emphasis in original). When fiduciaries undertake a special position of trust in managing another’s interests, it guides them to cultivate a consciousness that the application of their position to self-interested pursuits would be more egregious in nature than a contractual breach (p. 129).
Conscience, for Samet, ‘beautifully expresses [Equity’s] role as an advocate of Accountability Correspondence, as well as the mode of reasoning it employs in order to impel our legal system in the direction of this ideal’ (p. 43; emphasis in original). Importantly, also, its ‘terminology…has an important communicative function [alerting] people to the fact that Equity takes seriously considerations of the inter-personal morality aspect of their relationship with other players in the market’ (p. 43). If we are persuaded that there is something special about Equity’s approach to justice, our next question might concern whether we as a community can trust it.
Thus Samet enlists Immanuel Kant to elucidate Equity’s ‘conscience’. We would worry if judges applied their own subjective moral attitudes to resolve disputes. The type of conscience invoked by Equity, however, is ‘objective’ and ‘communal’ in that – at least in the private law – in most cases, individuals and judges are capable of exercising moral reasoning to reach a just answer (p. 48). Samet disclaims that using Kant to articulate an appeal to shared morality need not import wholesale acceptance of his absolutism or world view and acknowledges existence of cases in which conscientious people may respond differently where Equity should hold back (pp. 58–59, 68). We find explanatory assistance in her reference to Kant’s illustration of conscience as the ‘consciousness of an internal court in one’s mind’ (Samet, 2018: p. 48, quoting Kant, 1998: 560). Here the following components interact: ‘the judge as the inner voice that applies public objective standards; the verdict as supplying a motivation to act accordingly; and the inner drama of a conflict between self-love (the ‘advocate’) and reason (the ‘accuser’)’ (Samet, 2018: p. 49, citing Kant, 1997: p. 354; emphasis in original). Linking the function of human conscience with curial conscience illuminates how Equity is capable of egalitarian rather than elitist judgment since parties can expect the court to insist upon what they should have insisted from themselves.
While it might suit an ‘amoralist’ or practitioner of ‘creative compliance’ to reduce law to algorithmic rule application, ‘a person who is willing to engage in moral reasoning, and who perceives other players as human beings first and foremost’ is better served by a private law system that requires not a legal education, but an active conscience, to instruct their interpersonal interactions (pp. 68–69). To safely embark on either path of eviscerating Equity of its conscience or subsuming it into the Common Law, we need well-founded confidence that we have nothing indispensable to lose. Samet contends that either route would be regressive for the interrelated aims of maintaining the conditions for moral reasoning to flourish in our legal system and inculcating ethical standards into the practices of market actors. Notwithstanding, it may be interjected that conscionable standards in the private law can only do justice between parties, far from embedding justice into the social relations in which they interact
The relationship between ‘conscience’ and the ‘market’ provides a point of departure for furthering our understanding of Equity’s function in the community. As Samet’s title implies, Equity is (at least partially) about involving conscience in the market. She dedicates much more explanation to ‘conscience’ than ‘the market’, although she is erudite about the latter. One could argue that Equity and conscience have a role in preserving the market-based economy within which our legal system operates (Gearey, 2015: 169). A Marxist critique might proffer that the fall of capitalism would hasten if we lacked a body of law that maintains standards of conscience between actors in the market, thereby stabilising a market-based economy which is unconscionable in itself. For example, many recognised categories of fiduciaries are protective of the relationships that capitalism arguably needs to maintain for its own preservation; would the business world descend into chaos if commercial parties could not trust their solicitor or agent or business partner to abstain from snatching opportunities they encounter while acting on their behalf?
Although these questions are outside Samet’s scope, she gives us a basis from which to reimagine them. She argues that proprietary estoppel not only has a compensatory ‘tort-like’ aim but also facilitates and encourages ‘efficient and autonomy-enhancing, pre-contractual reliance’ (p. 109), purportedly a ‘highly valuable social practice…(p. 111)’. She acknowledges that imposing fiduciary duties on financial intermediaries is important for promoting a trustworthy financial services market (pp. 136–137). These two instances, for some, might point to each doctrine as primarily providing stability for markets that ingrain inequality into society. In Chapter 4, ‘On Clean, Soiled and Spattered Hands’, Samet discusses the ‘clean hands’ doctrine as a ‘gatekeeper to the Court of Equity’, which enables judges to go beyond the Common Law exclusion of claims based on illegality and consider other moral factors (pp. 153–154). She asserts that courts could invoke this doctrine to block CEOs from claiming compensation for breach of contract against companies who decline to pay excessive remuneration schemes, adding that this ‘can help to restore trust in the financial market’ (p. 155). Here, she probes us to think about how Equity’s conscience could be applied in a limited, but surely not trivial, reformative sense. With these examples in mind, one might be inclined to underscore either Equity’s potential to combat unscrupulousness in property and financial markets, or its limitations in combatting the inequalities that these markets entrench. Anyhow, Samet does not hail ‘the market’ as an unqualified good.
Samet observes that often fusion and anti-conscience related arguments conceal free-market political goals. A property rights enthusiast, fond of formalism, might not appreciate Samet alerting us to how proprietary estoppel fends off abuses of these rights such as aforementioned underhanded ‘hold up’ traps (pp. 87, 111). We can see how those who advocate liberty over duties of loyalty for classes of individuals who occupy the more powerful end of fiduciary relationships deceptively advance their cause by presenting ‘their project as a mere exercise in legal taxonomy – which implies indeed changes in the law, but is otherwise politically neutral…’ (p. 133). Having alerted us to the covertly political contractarianism seeking to undermine the equitable nature of fiduciary law, Samet makes the case that ‘…Equity’s interpretation of the fiduciary position as a distinct legal institution helps to create an environment in which these trust-based relationships can flourish’ (p. 133). We might, then, consider what else fusionist and conscience-sceptic goals might threaten: for example, equitable protections for vulnerable parties against exploitative contracts.
The clamour to eradicate Equity’s independence might stem from ‘the deep ideological commitment it represents, and/or the magnitude of the economic interests that are at stake’ (p. 194). Those most affronted by Equitable principles are likely to be advocates, and beneficiaries, of laissez faire free-market policy. While we have a market-based economy, Equity’s conscience-based justice fetters it with the Accountability Correspondence that insists that market actors have regard for how their practices and reliance on legal rules might impact (particularly more vulnerable) others. We are inspired to think about two aspects of the relationship between Equity and the market. First, is Equity more about protecting us from the market, or the market from us? Second, insofar as it does the former, who and what ideologies would profit from implementing fusionist and conscience-sceptic agendas?
What Samet does, she does splendidly. Other questions remain beyond the scope of her focus in her accessible, concise and engaging book. First, Samet’s defence of Equity focuses on what it does, and her theoretical contribution can help us to conceive whether it has potential to do more. If disguised activists push to marginalise Equity, perhaps this points to an untapped potential pertaining to the scope of its conscience. Second, although Samet satisfactorily explains her choice not to include a chapter on trusts (p. xvii), if she did so, it might expose some ‘cracks’ in Equity’s conscience – concerning how trusts are often employed by the wealthy and powerful to accomplish aims conflicting with our collective conscience – which should be closed (see Cotterrell, 1987). Third, how could, or does, Equity’s conscience go beyond the market? Samet touches on noneconomic interests at stake in lawyer–client, guardian–ward and doctor–patient relationships, evincing that there is something more personal than contractual about the fiduciary doctrine (pp. 126–128). Equitable doctrines have occasionally protected noneconomic interests, such as privacy, and might do so further as social and technological changes render these interests more precarious (Madden, 2019). If Samet’s book attains the influence it deserves, we might be closer to putting the conscience and fusion debates to rest and, using her insights, refocussing our efforts on exploring how Equity’s conscience might succeed or fail if applied to pressing contemporary questions of social and economic justice.