The Necessity of a Unitary Law of Tracing
In an important recent judgment, Millett LJ urged that nothing be done to exacerbate the continuing duality of our tracing rules. Although there was in his view 'no merit in having distinct and differing tracing rules at law and in equity', he thought that it was probably inevitable that some differences would persist.1 The best we could hope for, therefore, was that the differences be kept to an absolute minimum. This essay suggests, more optimistically, that we must recognize that there is only one tracing regime and that this can be done without much difficulty and without legislative intervention.
History conditions us to accept duality, and it is true in this field that our legal system has come to take for granted the awkward co-existence of two sets of tracing rules, one at common law and one in equity. Equity's tracing rules are hailed as ingenious and resourceful, rarely defeated by evidential difficulties.2 The common law, by contrast, is supposedly short-sighted and slow-footed, baffled by the least complication. In particular the common law is thought rarely to be able to trace money through a bank account, on the ground that it cannot cope with the evidential difficulties implied by any form of mixture. The locus classicus is the judgment of Lord Ellenborough CJ in Taylor v. Plumer and especially this passage:3
[T]he product of or substitute for the original thing still follows the nature of the thing itself, so long as it can be ascertained to be such, and the right only ceases when the means of ascertainment fail, which is the case when the subject is turned into money, and mixed and confounded in a general mass of the same description. The