Henry II inherited the throne of a troubled kingdom. The Crusades were in full swing at the time, a military endeavour that kept noble landowners away from their castles for years at a time. Unoccupied and unclaimed land invited squatters; since there was no central recording office for real property in England at the time, and sorting out who owned what fief was entrusted to human memory, disputes arose when aristocrats returned, or died thousands of miles from home.
Another, even more serious problem requiring royal action was the aftermath of the disastrous civil war between King Stephen and the Empress Maud. The two competing factions had hired mercenary soldiers, and when there was no one left to pay them, many of them took up robbery and other forms of violence as a profession. Crime followed the breakdown of local authority. The quarrel between the King and the Empress created more property troubles; as communities were divided, both factions were happy to reward their supporters with the lands of the local opponents. King Henry inherited a right royal mess.
Finally, there was the long-standing difficulty involving the Church, which culminated in the murder of St Thomas Becket. The problem for the King was that the Church acted like an imperium in imperio, a kingdom within a kingdom, only partially subject to Henry's laws if at all. The Church operated its own court system, which answered not to Henry but to the Pope, and was a large landowner and powerful vested interest. Henry wished to establish a system of justice that would enlarge the power of the Crown at the expense of the clergy.
Henry therefore founded a number of assizes. One was the assize of novel disseisin, which in Law French meant something close to the "assize of recent dispossession." Those who had been recently put out of their lands could recover the beneficial use of them by resort to this assize, which led to a then innovative method of trial. Twelve "sword-girt" knights of the locality were summoned to determine, upon their own knowledge, who was entitled to the property. This innovative method of proceeding, the origin of the civil petit jury at common law, was aimed at the chaos introduced into property rights by crusade and civil war.
Henry's true measure of cleverness, though, is on display in his innovations in criminal justice. Henry appointed "justices in eyre," the counterpart of circuit judges, to travel from town to town. When they arrived, they too called upon "sword-girt knights" to summon twenty four free men from the surrounding areas. These twenty-four free men were the first grand jury. They were called to report under oath any accusations of crime they were aware of in the community. In theory, then as now, the grand jury only brought accusations; it did not find guilt or innocence.
This new assize did away with the old form of trial known as "compurgation" in accusations brought by the grand jury. Under compurgation, an accused person who swore he didn't do the crime, and who found a sufficient number of his neighbours to swear that they believed him, was acquitted. Compurgation was no longer available in charges brought by the grand jury.
The trial available to the defendant remained the traditional trial by ordeal. Nevertheless, Henry did not put much faith in the results of the ordeal. The unfortunate felon who was convicted through the ordeal was, of course, executed. But even if the indicted culprit was acquitted in the ordeal, he was banished. In other words, the proceedings by the grand jury were the actual trial; everyone it accused was punished, and the community rid of the malefactor, one way or another.
These proceedings did much to transfer power out of the hands of local barons and into the hands of the royal court and its judges. In 1215, moreover, the Fourth Lateran Council forbade clergymen of the Roman Catholic Church from participating in trial by ordeal. After this date, trials after indictment by the grand jury were conducted by juries as well.
The large changes wrought in the English system of justice did not go unchallenged. The dispute over jurisdiction over the one-sixth of the population of England in holy orders was the chief grievance between the King and Becket. Disgruntled peers attempted to undo Henry's reforms by the Magna Carta forced on King John, but by that time the reforms had progressed too far --- and their superiority over the system they had replaced was too obvious --- for the forces of reaction to gain much ground. Henry II's reforms laid the groundwork for the system of trials in common law.