Educated at Trinity Hall, Cambridge, he became a barrister and was made a KC in 1923. He was elected to the British House of Commons in 1929 as a Liberal representing Montgomeryshire. In 1931 the Liberals divided into three groups and he became one of the Liberal National MPs supporting the National Government. However in 1939 he resigned from both the party and supporting the National Government. During World War II he was chairman of the All Party Action Group that played a significant role in forcing the resignation of Prime Minister, Neville Chamberlain.
In 1942 he rejoined the Liberal Party. Despite the fact that he had been absent from it for a decade, and with lingering suspicions that his commitment to Liberalism was less than full, he then became leader of the party in 1945 after Archibald Sinclair surprisingly lost his seat in the electoral debacle of that year that reduced the Liberals to just 12 seats in the House of Commons.
Davies had not sought the position of leader, and was not enthusiastic about it. But with only 12 MPs—6 of whom were only newly elected that year—the party's choice was somewhat limited. It was widely expected, and generally hoped (probably even by Davies himself), that he would be only a 'caretaker' leader until the more dynamic and popular Sinclair could get back into the House of Commons. But this never happened, and Davies was in fact to remain party leader for the next 11 years, taking the Liberals through three General Elections.
His first General Election as party leader in 1950 reduced the party to 9 MPs with barely 9% of the vote, and in those of 1951 and 1955, the Liberals fell back even further, holding only 6 seats, with 2.5% and 2.7% of the vote (although these vote shares were largely attributed to the huge drop in the number of seats the party fought). He finally resigned as leader at the party conference in September, 1956, and was succeeded by Jo Grimond, following what was effectively a coup by the membership of which both Davies and Grimond appeared to be unaware until it was over.
Davies therefore led the once-powerful Liberal Party through its lowest period, when it was reduced to a minor party due to the electorate's polarisation between the Labour and the Conservatives, and the classic "A Liberal vote is a wasted vote" argument never held truer than in the 1950s. He was well liked however, both in the party and beyond, and was generally regarded as a good man who did his best in a position that he was not really cut out for.
His life was also one touched by personal tragedy, not least in that he lost three of his four children within the space of a few years after the outbreak of the Second World War. His oldest son David died in 1939 as a result of natural causes related to epilepsy, his daughter Mary committed suicide in 1941 (though the family always bitterly disputed that this was the cause of death) and another son, Geraint, was killed on active service in 1942. Each of his children was just 24 years old at their times of death except Davies' fourth son, Stanley, who survived until old age.
Davies was an alcoholic for much of his life, and this left him in a weakened state of health, particularly by the time he took on the burden of party leadership. For two of his three General Election campaigns as leader, for example, he was hospitalised. And, despite the general affection in which he was held, his leadership was widely regarded as lacklustre and ineffective, and thus contributing to the party's malaise at a time when it was most in need of direction.
In recent years however, his role has been revised and treated more sympathetically by historians who point out that the task of leading the Liberal Party in the late 1940s and early 50s would have been a challenge for anyone, and that in simply keeping the party together and in existence at all, his contribution was a significant one. It has also emerged that he was offered cabinet office (Education Minister) in 1951 by Winston Churchill in exchange for supporting the new Conservative government, but refused on the grounds that it would have destroyed the Liberal Party.
Clement Davies died in 1962, aged 78. Though still an MP, he was by then largely detached from the affairs of the Liberal party and acted semi-independently. He was succeeded as Liberal MP for Montgomeryshire by Emlyn Hooson.