The High Court of Chancery was the court that developed from the Lord Chancellor's jurisdiction. Unlike the courts of law, which were rigidly based on formal causes of action, the Lord Chancellor had jurisdiction to determine cases, on behalf of the King, according to equity or fairness rather than according to the strict letter of the law. Gradually the rules of equity became formalized, but they preserved important innovations, such as injunctions and trusts. See equity (law). Records of the court are kept by The National Archives.
It is a frequent misconception, however, that the Court of Chancery's primary principle of decision in the fifteenth and early-sixteenth century was Equity. The Courts of Chancery were courts of the King's conscience, decisions were not bound by the doctrine of stare decisis so the powers of the chancellors equity were not bound by the blinkers of due process as in the common law courts. Due to this fact the Court of Chancery lost favor with many people as the court gained a reputation for being inconsistent, an old proverb illustrates this "equity varies with the length of the chancellor's foot". The year-book reports reveal that the court was primarily a court of Conscience in its early days. Conscience—a term of art—connoted the moral law applied to prevent peril to the soul of the wrongdoer through mortal sin. The crucial twist to a modern mind is that the remedy was given to the plaintiff not to return him to his rightful position but to look after the wrongdoer's soul. The benefit to the plaintiff was only incidental. This is also the explanation for specific performance, which compels the sinner to put matters right, if he is to save his soul. The concept of Equity—which generally softens the harsh effects of written laws—did not take on a primary role until later in the Court's history.
Most other common law jurisdictions either (1) abolished chancery courts and merged the powers of the courts of equity with the courts of law, thus making it possible for one to seek equitable relief at the same time as legal relief or (2) made the equitable jurisdiction the responsibility of a separate chancery division of the court of general jurisdiction. However, four American states (Delaware, Mississippi, Tennessee, and New Jersey), have retained separate Courts of Chancery. Judges who sit on these courts are called Chancellors.
In New York state, the Court of Chancery was abolished by the Constitution of 1846, which took effect in 1848. The last Chancellor was Reuben Hyde Walworth, who served as New York's highest judge from 1828 to 1848.
One important distinction between chancery courts and law courts (at least in the United States, where juries still commonly hear civil cases) is that generally a jury trial is not possible in equitable actions (whether in a merged court or a court of equity) as only a judge can dispense equity; a jury, while it can answer questions of fact, has no power to answer questions that involve interpretation of the law.
In the context of Charles Dickens interest in the Court of Chancery, see the book: 'Charles Dickens as a Legal Historian' by William Searle Holdsworth (Published in 1928 by Yale University Press). This has very detailed descriptions of the working of the Court of Chancery.