The following blog entry supports the findings reported in a recent article authored by ITSSD President Lawrence Kogan that was published by the Washington Legal Foundation.
[See: France Proposes New EU Ministry of Silly Authentic Acts ala Monty Python that Jeopardizes Anglo-American Free Enterprise, ITSSD Journal on Economic Freedom, at: http://itssdeconomicfreedom.blogspot.com/2009/02/france-proposes-eu-law-ministry-of.html ].
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http://www.lawgazette.co.uk/opinion/letters/bid-civil-law-notaries-protect-their-monopoly
Bid By Civil Law Notaries to Protect Their Monopoly
By Anthony Northey
UK Law Society Gazette
Dec. 18, 2008
The news item ‘CCBE [Council of Bars & Law Societies of Europe/ Conseils des barreaux europeens] warning on threat of notaries’ highlighted what is going on behind the scenes in Brussels (see [2008] Gazette, 4 December, 3).
As vice-president of the Notaries Society of England and Wales, I attended the Forum on Judicial Cooperation in Civil Matters; Debate with National Parliaments in Brussels on 2 December.
The Council of the Notariats of the European Union (CNUE) used this forum to promote legislation to obtain international status and mutual recognition in EU states of Authentic Acts prepared by civil law notaries. The proposals would not give any status or recognition to notarial acts or instruments (Authentic Acts) prepared by common law notaries, let alone deeds or documents prepared by solicitors or barristers.
We also had a meeting in Brussels with CNUE but they appear to be totally unyielding over this issue.
Bid By Civil Law Notaries to Protect Their Monopoly
By Anthony Northey
UK Law Society Gazette
Dec. 18, 2008
The news item ‘CCBE [Council of Bars & Law Societies of Europe/ Conseils des barreaux europeens] warning on threat of notaries’ highlighted what is going on behind the scenes in Brussels (see [2008] Gazette, 4 December, 3).
As vice-president of the Notaries Society of England and Wales, I attended the Forum on Judicial Cooperation in Civil Matters; Debate with National Parliaments in Brussels on 2 December.
The Council of the Notariats of the European Union (CNUE) used this forum to promote legislation to obtain international status and mutual recognition in EU states of Authentic Acts prepared by civil law notaries. The proposals would not give any status or recognition to notarial acts or instruments (Authentic Acts) prepared by common law notaries, let alone deeds or documents prepared by solicitors or barristers.We also had a meeting in Brussels with CNUE but they appear to be totally unyielding over this issue.
If legislation ensues giving international legal effect and recognition to civil law notaries’ Authentic Acts alone, this will create an even more uneven playing field in Europe and will disadvantage the common law jurisdictions throughout the UK, Ireland and also the Nordic countries.
The Medina Ortega Report on Authentic Acts is now due to be voted on at the plenary session, on 18 December. It is extremely important that we all lobby our MEPs over this issue. Diana Wallis, who is not only a Member of the European Parliament, but also both a solicitor and vice-president of the European Parliament, is doing her best to oppose this proposal. She joined us at our meeting with CNUE. We are very grateful to her for her support.
The civil law notaries enjoy monopolistic status and are determined to retain this. The UK, Ireland and Nordic countries are not part of CNUE.
Our three British legal professions of solicitors, barristers and notaries public cannot afford to ignore what is happening in Brussels any longer.
-------------------------------------------------------------------------------------------------
http://www.europarl.europa.eu/sides/getDoc.do?type=CRE&reference=20081218&secondRef=ITEM-003&language=EN&ring=A6-2008-0451
European Parliament - Debates
Thursday, 18 December 2008 – Strasbourg Provisional edition
3. European Authentic Act - E-Justice - Cross-border implications of the legal protection of adults (debate)
http://www.europarl.europa.eu/sides/getVod.do?mode=unit&language=EN&vodDateId=20081218-10:17:26-176
Diana Wallis, MEP, UK - on behalf of the ALDE Group. – Mr President, I think my group will have no difficulty, I hope, in supporting my own report and certainly that of Mr López-Istúriz White.
The report I want to address – because it brings problems for Members across this House – is that of Mr Medina Ortega. We all share the same idea: we have freedom of movement of judgments. We would like freedom of movement of authentic acts, and I add: ‘or equivalent documents’. There has been much talk about facilitating the lives of our citizens. To me, that means the lives of all Europe’s citizens and it would not serve us well if a number of countries and a number of legal traditions were excluded from this area of justice. That is what will happen if we do not look more widely and have patience and tolerance for legal systems that on the face of it may appear different, but if you dig deeper have very similar ways of approaching things.
We have managed to recognise one another’s documents. There is no earthly reason why with tolerance and care we cannot recognise one another’s acts when they are done by contract or notarial act, but not in exactly the same manner and form.
My plea is: Please, respect the amendments that have been put today. They may not be passed, but the spirit of them is that this is a Europe of justice for all citizens and all legal cultures. It should not become exclusive.
-------------------------------------------------------------------------------------------------
[UNFORTUNATELY, HOWEVER, THE BRITISH MEPs WERE UNSUCCESSFUL – SEE BELOW].
-------------------------------------------------------------------------------------------------
http://www.europarl.europa.eu/sides/getDoc.do?type=PV&reference=20081218&secondRef=ITEM-006-21&language=EN&ring=A6-2008-0451
Minutes: Thursday, 18 December 2008 – Strasbourg Provisional edition
6.21. European Authentic Act (vote)
Report: with recommendations to the Commission on the European Authentic Act [2008/2124(INI)] – Committee on Legal Affairs. Rapporteur: Manuel Medina Ortega (A6-0451/2008)
(Qualified majority)
(Voting record: 'Results of votes', Item 20)
MOTION FOR A RESOLUTION
Adopted (P6_TA-PROV(2008)0636)
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http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P6-TA-2008-0636+0+DOC+XML+V0//EN#BKMD-41
http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P6-TA-2008-0636
European Parliament Resolution of 18 December 2008, with recommendations to the Commission on the European Authentic Act (2008/2124(INI))
The European Parliament,
– having regard to Article 192, second paragraph, of the EC Treaty,
– having regard to the Commission's communication of 10 May 2005 entitled "The Hague Programme: Ten priorities for the next five years. The Partnership for European renewal in the field of Freedom, Security and Justice" (COM(2005)0184),
– having regard the comparative study on authentic instruments conducted for the Committee on Legal Affairs,
– having regard to Rules 39 and 45 of its Rules of Procedure,
– having regard to the report of the Committee on Legal Affairs (A6-0451/2008),
A. whereas, in its aforesaid communication on the Hague Programme, the Commission singled out, as one of its priorities, the need to guarantee an effective European area of civil justice, not least as regards the recognition and enforcement of judicial decisions; whereas, with the aim of strengthening mutual trust within the European Union, that programme stated that continued implementation of the principle of mutual recognition was a main priority in the coming years, as mutual recognition is a specific means of protecting the rights of citizens and guaranteeing their application across borders in Europe,
B. whereas the Hague Programme states that continued implementation of the programme of mutual recognition is a main priority and that this should be completed by 2011,
C. whereas there is a steady increase in the movement of citizens within the Union; whereas there is therefore a development in the number of legal situations concerning two or more Member States,
D. whereas, in its aforesaid Communication on the Hague Programme, the Commission recognised that in the field of civil justice one key aspect that needs to be addressed is the recognition of public documents; whereas, in this respect, there is an urgent need to promote the recognition and enforcement of authentic acts, as defined in the Unibank judgment(1) ,
E. whereas the sectoral and inconsistent approach taken by Community legislation in this field is not satisfactory(2) ,
F. whereas there is a need to protect European citizens in their cross-border family and property relationships,
G. whereas businesses have more and more branches abroad and intra-Community activities that result in the greater movement of authentic acts relating to the setting-up and operation of businesses,
H. whereas it is essential to establish a clear and comprehensive legal framework for the Union that guarantees citizens and economic operators the certainty and predictability of legal situations and transactions drawn up by those delegated with public authority,
I. whereas the creation of a genuine European legal area is based, in the field of litigation, on the cross-border recognition of legal decisions made by a court or administrative authority and, in non-judicial matters, on the cross-border recognition of authentic acts drawn up or registered by a judicial authority or by public officials appointed to authenticate legal acts,
J. whereas the existing regulations on the mutual recognition of legal decisions apply to authentic acts when these emanate from the public authorities,
K. whereas the key characteristic of an authentic act is that it has a greater probative value than a private agreement and that this probative value, which must be accepted by the judge, is regularly conferred on it in Member State legislation on account of the trust placed in acts drawn up, in the context of legal transactions, by a public officer appointed for that purpose or by a public authority(3) ,
L. whereas the prerequisite for the probative value of an authentic act is recognition of its authenticity, in that it emanates from a public official vested with the power to draw up authentic acts or from a public authority; whereas mutual trust in the legal systems of the Member States justifies making authenticity verification procedures only applicable in future when serious doubts arise as to the veracity of the document,
M. whereas respect for the legislation of the Member State on the territory of which the act is to be produced for use nevertheless entails the certainty that recognition of the probative value does not mean that the foreign authentic act enjoys a greater probative value than national authentic acts in that Member State by virtue of its recognition in the Member State in which it is to be produced; whereas the material scope of the Regulation requested should cover an essential part of civil and commercial law, with the exception of certain clearly defined matters,
N. whereas differences in the structure and organisation of public registry systems in the field of immoveable property, as well as differences concerning the nature and scale of the public confidence placed in them, mean that the transfer of immoveable property rights has to be excluded from a future Community instrument, given the close correlation between the method of drawing up an authentic act and entry in the public register, [i.e., VALUABLE REAL PROPERTY CONVEYANCES 'AUTHENTICATED'/REGISTERED BY NOTARIES ESCAPE THESE RULES OF MUTUAL RECOGNITION]
O. whereas, as regards the recognition of legal decisions across the Union, this exclusion corresponds to attributing exclusive competence to the courts of the place where the property is situated for all appeals relating to immoveable property rights and to the courts on the territory where the public register is kept for all appeals relating to the validity of entries in the public register(4) ,
P. whereas the concept of an authentic act does not exist in common-law systems, in particular the law of England and Wales, or in Nordic countries; whereas although in England and Wales there exist solicitors who act as notaries public and the profession of scrivener notaries, those lawyers cannot produce authentic acts, but are merely empowered to certify signatures, and whereas accordingly, in adopting any legislation on European authentic acts, steps should be taken to ensure that no confusion can arise in this respect; whereas, in turn, every precaution should be taken to ensure that authentic acts cannot be used in countries where such acts cannot be made by nationals of those countries in order to circumvent procedures prescribed by the those countries' legal systems (e.g. grant of probate); whereas, in addition, in order to raise awareness among legal professionals in those Member States where authentic acts do not exist, a suitable information campaign should be initiated by the Commission and every effort should be made to ensure that common-law legal professionals are aware of the work done by civil-law public officials and of the potential advantages for their clients – in terms of legal certainty, in particular – of using authentic acts in transactions which they are proposing to conclude in those countries where that instrument is used; whereas this underscores a need often expressed by Parliament's Committee on Legal Affairs for trans-European networks of legal practitioners, information campaigns and material and common training, which the Commission is called upon to promote,
Q. whereas the Regulation requested may not apply either to matters relating to the applicable law covered by other Community instruments or to questions relating to the competence, organisation and structure of public authorities and officials, including the authentication procedure, which come under the jurisdiction of the Member States,
1. Considers that mutual trust in the field of law within the Community justifies the future abolition of procedures for checking the accuracy of authentic acts in cross-border matters; considers that this recognition of an authentic act for the purpose of its use in the requested Member State can only be refused in the case of serious and substantiated doubts as to its authenticity, or if recognition is contrary to public policy in the Member State requested;
2. Requests the Commission to submit to Parliament, on the basis of Article 65(a) and the second indent of Article 67(5) of the EC Treaty, a legislative proposal on establishing the mutual recognition and enforcement of authentic acts;
3. Stresses that recognition may not result in giving a foreign act greater effect than a national act would have;
4. Asks that the Regulation requested apply to all authentic acts in civil and commercial matters except those which relate to immoveable property and which must or may be subject to entry or mention in a public register;
5. Specifies that the Regulation requested should not apply either to matters relating to the law applicable to the subject-matter of the authentic act or to questions relating to the competence, organisation and structure of public authorities and officials, including the authentication procedure;
6. Notes, in this context, that the recommendations annexed hereto respect the principles of subsidiarity and proportionality and the fundamental rights of citizens;
7. Considers that the requested proposal will not have any financial implications;
8. Instructs its President to forward this resolution and the accompanying detailed recommendations to the Commission and the Council, and to the governments and parliaments of the Member States.
(1) Judgment of the Court of Justice of 17 June 1999 in Case C-260/97 Unibank [1999] ECR I-3715.
(2) Council Regulation (EC) No 44/2001 (OJ L 12, 16.1.2001, p. 1); Council Regulation (EC) No 2201/2003 (OJ L 338, 23.12.2003, p. 1); Council Regulation (EC) No 805/2004 (OJ L 143, 30.4.2004, p. 15).
(3) Opinion of Advocate-General La Pergola of 2 February 1999 in Case C-260/97 Unibank , cited above, paragraph 7.
(4) See Article 22, points 1 and 3, of Regulation (EC) No 44/2001.
ANNEX
DETAILED RECOMMENDATIONS ON THE CONTENT OF THE PROPOSAL REQUESTED
1. Mutual trust in the field of law within the Community justifies the future abolition of procedures for checking the accuracy of authentic acts in cross-border matters.
2. This recognition of an authentic act for the purpose of its use in the requested Member State can only be refused where there is serious and substantiated doubt as to its authenticity, or if recognition is contrary to public policy in the Member State requested.
3. Parliament requests the Commission to submit to it, on the basis of Article 65(a) and the second indent of Article 67(5) of the EC Treaty, a legislative proposal on establishing the mutual recognition and enforcement of authentic acts.
4. The act that is the subject of the legislative proposal should apply to all authentic acts in civil and commercial matters except those which relate to immoveable property and which must or may be subject to entry or mention in a public register. It should not apply either to matters relating to the law applicable to the subject-matter of the authentic act or to questions relating to the competence, organisation and structure of public authorities and officials, including the authentication procedure.
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http://www.lawgazette.co.uk/news/ccbe-warning-threat-notaries
CCBE Warning on the Threat of Notaries
By Paul Rogerson
UK Law Gazette
Dec. 4, 2008
A backdoor bid by continental notaries to beat off the threat of competition is meeting fierce resistance from lawyers across Europe. At its plenary session in Brussels last weekend, the Council of Bars and Law Societies of Europe (CCBE) abandoned its historically neutral position on the notarial profession to pass a resolution outlining its concerns.
The CCBE stressed that the European Commission wants lawyers to compete with continental notaries in their own markets. However, a report from the European Parliament’s Legal Affairs Committee has recommended that the commission legislate to introduce a common system for the mutual recognition and enforcement of so-called ‘authentic acts’. These are instruments used by continental notaries, such as certificates of inheritance. The report will be submitted to the Parliament on 15 December.
Richard Frimston, a partner at London law firm Russell-Cooke and an expert in the area, explained: ‘Notaries feel under threat from the EU over the whittling away of their monopoly. Their reaction is to say “instead of allowing free movement of notaries you should instead allow free movement of so-called authentic acts”. This disadvantages common law jurisdictions where we do not have the concept of an authentic act. We have a deed.
‘If this proposal went through you’re creating a fortress of civil law notaries, who can make documents within their own jurisdiction which then have to be recognised throughout the EU. We can’t make documents which are then recognised in their country – it’s not a level playing field.’
Calling for more research before any EU-wide legislation is drafted, the CCBE stressed that EU citizens should not suffer any discrimination in cross-border legal actions. The UK law societies, meanwhile, have written separately to MEPs calling on the Parliament to table an alternative resolution that takes into account deeds and other equivalent documents.
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http://www.cnue-nouvelles.be/en/000/actualites/cp-etude-acte-authentique-02-12-08-en.pdf
A European Initiative for Authentic Acts: A Project Serving Citizens and Business
Press Release
Conseil des Notariats de l’Union Européenne
Council of the Notariats of the European Union
Brussels, 2 December 2008
On Tuesday 2 December the European Parliament organised a forum on judicial cooperation in civil matters, in collaboration with the French Presidency of the Council of the European Union. On this occasion, the Council of the Notariats of the European Union (CNUE), represented by its president, Mr Juan Bolás Alfonso, presented the results of a study commissioned by the European Parliament on the mutual recognition and enforcement of authentic acts in Europe.
The study makes a comparative analysis of national rules on private law and private international law relating to authentic acts in six EU Member States representing the different legal systems that coexist within the EU, namely:
England, France, Germany, Poland, Romania and Sweden. After having identified the gaps and obstacles arising in the recognition and enforcement of authentic acts between the Member States, the study proposes to remedy this with a European initiative.
To this end, reviewing the Brussels I Regulation on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters could be envisaged. Likewise, a horizontal Community initiative could be possible and also useful. Taking the form of a Regulation, according to Mr Bolás it would make it possible to “remove the procedural requirements involved until now in areas such as family law and company law”. Aside from simplifying procedures, “the benefits expected for citizens, families and business would be considerable in terms of costs and time”, he added. The free movement of the authentic act and its intrinsic qualities, namely probative value and enforceability, would bring greater legal certainty to exchanges.
The Medina Ortega Report on Authentic Acts is now due to be voted on at the plenary session, on 18 December. It is extremely important that we all lobby our MEPs over this issue. Diana Wallis, who is not only a Member of the European Parliament, but also both a solicitor and vice-president of the European Parliament, is doing her best to oppose this proposal. She joined us at our meeting with CNUE. We are very grateful to her for her support.
The civil law notaries enjoy monopolistic status and are determined to retain this. The UK, Ireland and Nordic countries are not part of CNUE.
Our three British legal professions of solicitors, barristers and notaries public cannot afford to ignore what is happening in Brussels any longer.
-------------------------------------------------------------------------------------------------
http://www.europarl.europa.eu/sides/getDoc.do?type=CRE&reference=20081218&secondRef=ITEM-003&language=EN&ring=A6-2008-0451
European Parliament - Debates
Thursday, 18 December 2008 – Strasbourg Provisional edition
3. European Authentic Act - E-Justice - Cross-border implications of the legal protection of adults (debate)
http://www.europarl.europa.eu/sides/getVod.do?mode=unit&language=EN&vodDateId=20081218-10:17:26-176
Diana Wallis, MEP, UK - on behalf of the ALDE Group. – Mr President, I think my group will have no difficulty, I hope, in supporting my own report and certainly that of Mr López-Istúriz White.
The report I want to address – because it brings problems for Members across this House – is that of Mr Medina Ortega. We all share the same idea: we have freedom of movement of judgments. We would like freedom of movement of authentic acts, and I add: ‘or equivalent documents’. There has been much talk about facilitating the lives of our citizens. To me, that means the lives of all Europe’s citizens and it would not serve us well if a number of countries and a number of legal traditions were excluded from this area of justice. That is what will happen if we do not look more widely and have patience and tolerance for legal systems that on the face of it may appear different, but if you dig deeper have very similar ways of approaching things.
We have managed to recognise one another’s documents. There is no earthly reason why with tolerance and care we cannot recognise one another’s acts when they are done by contract or notarial act, but not in exactly the same manner and form.
My plea is: Please, respect the amendments that have been put today. They may not be passed, but the spirit of them is that this is a Europe of justice for all citizens and all legal cultures. It should not become exclusive.
-------------------------------------------------------------------------------------------------
[UNFORTUNATELY, HOWEVER, THE BRITISH MEPs WERE UNSUCCESSFUL – SEE BELOW].
-------------------------------------------------------------------------------------------------
http://www.europarl.europa.eu/sides/getDoc.do?type=PV&reference=20081218&secondRef=ITEM-006-21&language=EN&ring=A6-2008-0451
Minutes: Thursday, 18 December 2008 – Strasbourg Provisional edition
6.21. European Authentic Act (vote)
Report: with recommendations to the Commission on the European Authentic Act [2008/2124(INI)] – Committee on Legal Affairs. Rapporteur: Manuel Medina Ortega (A6-0451/2008)
(Qualified majority)
(Voting record: 'Results of votes', Item 20)
MOTION FOR A RESOLUTION
Adopted (P6_TA-PROV(2008)0636)
-------------------------------------------------------------------------------------------------
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P6-TA-2008-0636+0+DOC+XML+V0//EN#BKMD-41
http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P6-TA-2008-0636
European Parliament Resolution of 18 December 2008, with recommendations to the Commission on the European Authentic Act (2008/2124(INI))The European Parliament,
– having regard to Article 192, second paragraph, of the EC Treaty,
– having regard to the Commission's communication of 10 May 2005 entitled "The Hague Programme: Ten priorities for the next five years. The Partnership for European renewal in the field of Freedom, Security and Justice" (COM(2005)0184),
– having regard the comparative study on authentic instruments conducted for the Committee on Legal Affairs,
– having regard to Rules 39 and 45 of its Rules of Procedure,
– having regard to the report of the Committee on Legal Affairs (A6-0451/2008),
A. whereas, in its aforesaid communication on the Hague Programme, the Commission singled out, as one of its priorities, the need to guarantee an effective European area of civil justice, not least as regards the recognition and enforcement of judicial decisions; whereas, with the aim of strengthening mutual trust within the European Union, that programme stated that continued implementation of the principle of mutual recognition was a main priority in the coming years, as mutual recognition is a specific means of protecting the rights of citizens and guaranteeing their application across borders in Europe,
B. whereas the Hague Programme states that continued implementation of the programme of mutual recognition is a main priority and that this should be completed by 2011,
C. whereas there is a steady increase in the movement of citizens within the Union; whereas there is therefore a development in the number of legal situations concerning two or more Member States,
D. whereas, in its aforesaid Communication on the Hague Programme, the Commission recognised that in the field of civil justice one key aspect that needs to be addressed is the recognition of public documents; whereas, in this respect, there is an urgent need to promote the recognition and enforcement of authentic acts, as defined in the Unibank judgment(1) ,
E. whereas the sectoral and inconsistent approach taken by Community legislation in this field is not satisfactory(2) ,
F. whereas there is a need to protect European citizens in their cross-border family and property relationships,
G. whereas businesses have more and more branches abroad and intra-Community activities that result in the greater movement of authentic acts relating to the setting-up and operation of businesses,
H. whereas it is essential to establish a clear and comprehensive legal framework for the Union that guarantees citizens and economic operators the certainty and predictability of legal situations and transactions drawn up by those delegated with public authority,
I. whereas the creation of a genuine European legal area is based, in the field of litigation, on the cross-border recognition of legal decisions made by a court or administrative authority and, in non-judicial matters, on the cross-border recognition of authentic acts drawn up or registered by a judicial authority or by public officials appointed to authenticate legal acts,
J. whereas the existing regulations on the mutual recognition of legal decisions apply to authentic acts when these emanate from the public authorities,
K. whereas the key characteristic of an authentic act is that it has a greater probative value than a private agreement and that this probative value, which must be accepted by the judge, is regularly conferred on it in Member State legislation on account of the trust placed in acts drawn up, in the context of legal transactions, by a public officer appointed for that purpose or by a public authority(3) ,
L. whereas the prerequisite for the probative value of an authentic act is recognition of its authenticity, in that it emanates from a public official vested with the power to draw up authentic acts or from a public authority; whereas mutual trust in the legal systems of the Member States justifies making authenticity verification procedures only applicable in future when serious doubts arise as to the veracity of the document,
M. whereas respect for the legislation of the Member State on the territory of which the act is to be produced for use nevertheless entails the certainty that recognition of the probative value does not mean that the foreign authentic act enjoys a greater probative value than national authentic acts in that Member State by virtue of its recognition in the Member State in which it is to be produced; whereas the material scope of the Regulation requested should cover an essential part of civil and commercial law, with the exception of certain clearly defined matters,
N. whereas differences in the structure and organisation of public registry systems in the field of immoveable property, as well as differences concerning the nature and scale of the public confidence placed in them, mean that the transfer of immoveable property rights has to be excluded from a future Community instrument, given the close correlation between the method of drawing up an authentic act and entry in the public register, [i.e., VALUABLE REAL PROPERTY CONVEYANCES 'AUTHENTICATED'/REGISTERED BY NOTARIES ESCAPE THESE RULES OF MUTUAL RECOGNITION]
O. whereas, as regards the recognition of legal decisions across the Union, this exclusion corresponds to attributing exclusive competence to the courts of the place where the property is situated for all appeals relating to immoveable property rights and to the courts on the territory where the public register is kept for all appeals relating to the validity of entries in the public register(4) ,
P. whereas the concept of an authentic act does not exist in common-law systems, in particular the law of England and Wales, or in Nordic countries; whereas although in England and Wales there exist solicitors who act as notaries public and the profession of scrivener notaries, those lawyers cannot produce authentic acts, but are merely empowered to certify signatures, and whereas accordingly, in adopting any legislation on European authentic acts, steps should be taken to ensure that no confusion can arise in this respect; whereas, in turn, every precaution should be taken to ensure that authentic acts cannot be used in countries where such acts cannot be made by nationals of those countries in order to circumvent procedures prescribed by the those countries' legal systems (e.g. grant of probate); whereas, in addition, in order to raise awareness among legal professionals in those Member States where authentic acts do not exist, a suitable information campaign should be initiated by the Commission and every effort should be made to ensure that common-law legal professionals are aware of the work done by civil-law public officials and of the potential advantages for their clients – in terms of legal certainty, in particular – of using authentic acts in transactions which they are proposing to conclude in those countries where that instrument is used; whereas this underscores a need often expressed by Parliament's Committee on Legal Affairs for trans-European networks of legal practitioners, information campaigns and material and common training, which the Commission is called upon to promote,
Q. whereas the Regulation requested may not apply either to matters relating to the applicable law covered by other Community instruments or to questions relating to the competence, organisation and structure of public authorities and officials, including the authentication procedure, which come under the jurisdiction of the Member States,
1. Considers that mutual trust in the field of law within the Community justifies the future abolition of procedures for checking the accuracy of authentic acts in cross-border matters; considers that this recognition of an authentic act for the purpose of its use in the requested Member State can only be refused in the case of serious and substantiated doubts as to its authenticity, or if recognition is contrary to public policy in the Member State requested;
2. Requests the Commission to submit to Parliament, on the basis of Article 65(a) and the second indent of Article 67(5) of the EC Treaty, a legislative proposal on establishing the mutual recognition and enforcement of authentic acts;
3. Stresses that recognition may not result in giving a foreign act greater effect than a national act would have;
4. Asks that the Regulation requested apply to all authentic acts in civil and commercial matters except those which relate to immoveable property and which must or may be subject to entry or mention in a public register;
5. Specifies that the Regulation requested should not apply either to matters relating to the law applicable to the subject-matter of the authentic act or to questions relating to the competence, organisation and structure of public authorities and officials, including the authentication procedure;
6. Notes, in this context, that the recommendations annexed hereto respect the principles of subsidiarity and proportionality and the fundamental rights of citizens;
7. Considers that the requested proposal will not have any financial implications;
8. Instructs its President to forward this resolution and the accompanying detailed recommendations to the Commission and the Council, and to the governments and parliaments of the Member States.
(1) Judgment of the Court of Justice of 17 June 1999 in Case C-260/97 Unibank [1999] ECR I-3715.
(2) Council Regulation (EC) No 44/2001 (OJ L 12, 16.1.2001, p. 1); Council Regulation (EC) No 2201/2003 (OJ L 338, 23.12.2003, p. 1); Council Regulation (EC) No 805/2004 (OJ L 143, 30.4.2004, p. 15).
(3) Opinion of Advocate-General La Pergola of 2 February 1999 in Case C-260/97 Unibank , cited above, paragraph 7.
(4) See Article 22, points 1 and 3, of Regulation (EC) No 44/2001.
ANNEX
DETAILED RECOMMENDATIONS ON THE CONTENT OF THE PROPOSAL REQUESTED
1. Mutual trust in the field of law within the Community justifies the future abolition of procedures for checking the accuracy of authentic acts in cross-border matters.
2. This recognition of an authentic act for the purpose of its use in the requested Member State can only be refused where there is serious and substantiated doubt as to its authenticity, or if recognition is contrary to public policy in the Member State requested.
3. Parliament requests the Commission to submit to it, on the basis of Article 65(a) and the second indent of Article 67(5) of the EC Treaty, a legislative proposal on establishing the mutual recognition and enforcement of authentic acts.
4. The act that is the subject of the legislative proposal should apply to all authentic acts in civil and commercial matters except those which relate to immoveable property and which must or may be subject to entry or mention in a public register. It should not apply either to matters relating to the law applicable to the subject-matter of the authentic act or to questions relating to the competence, organisation and structure of public authorities and officials, including the authentication procedure.
-------------------------------------------------------------------------------------------------
http://www.lawgazette.co.uk/news/ccbe-warning-threat-notaries
CCBE Warning on the Threat of Notaries
By Paul Rogerson
UK Law Gazette
Dec. 4, 2008
A backdoor bid by continental notaries to beat off the threat of competition is meeting fierce resistance from lawyers across Europe. At its plenary session in Brussels last weekend, the Council of Bars and Law Societies of Europe (CCBE) abandoned its historically neutral position on the notarial profession to pass a resolution outlining its concerns.
The CCBE stressed that the European Commission wants lawyers to compete with continental notaries in their own markets. However, a report from the European Parliament’s Legal Affairs Committee has recommended that the commission legislate to introduce a common system for the mutual recognition and enforcement of so-called ‘authentic acts’. These are instruments used by continental notaries, such as certificates of inheritance. The report will be submitted to the Parliament on 15 December.
Richard Frimston, a partner at London law firm Russell-Cooke and an expert in the area, explained: ‘Notaries feel under threat from the EU over the whittling away of their monopoly. Their reaction is to say “instead of allowing free movement of notaries you should instead allow free movement of so-called authentic acts”. This disadvantages common law jurisdictions where we do not have the concept of an authentic act. We have a deed.
‘If this proposal went through you’re creating a fortress of civil law notaries, who can make documents within their own jurisdiction which then have to be recognised throughout the EU. We can’t make documents which are then recognised in their country – it’s not a level playing field.’
Calling for more research before any EU-wide legislation is drafted, the CCBE stressed that EU citizens should not suffer any discrimination in cross-border legal actions. The UK law societies, meanwhile, have written separately to MEPs calling on the Parliament to table an alternative resolution that takes into account deeds and other equivalent documents.
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http://www.cnue-nouvelles.be/en/000/actualites/cp-etude-acte-authentique-02-12-08-en.pdf
A European Initiative for Authentic Acts: A Project Serving Citizens and Business
Press Release
Conseil des Notariats de l’Union Européenne
Council of the Notariats of the European Union
Brussels, 2 December 2008
On Tuesday 2 December the European Parliament organised a forum on judicial cooperation in civil matters, in collaboration with the French Presidency of the Council of the European Union. On this occasion, the Council of the Notariats of the European Union (CNUE), represented by its president, Mr Juan Bolás Alfonso, presented the results of a study commissioned by the European Parliament on the mutual recognition and enforcement of authentic acts in Europe.
The study makes a comparative analysis of national rules on private law and private international law relating to authentic acts in six EU Member States representing the different legal systems that coexist within the EU, namely:
England, France, Germany, Poland, Romania and Sweden. After having identified the gaps and obstacles arising in the recognition and enforcement of authentic acts between the Member States, the study proposes to remedy this with a European initiative.
To this end, reviewing the Brussels I Regulation on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters could be envisaged. Likewise, a horizontal Community initiative could be possible and also useful. Taking the form of a Regulation, according to Mr Bolás it would make it possible to “remove the procedural requirements involved until now in areas such as family law and company law”. Aside from simplifying procedures, “the benefits expected for citizens, families and business would be considerable in terms of costs and time”, he added. The free movement of the authentic act and its intrinsic qualities, namely probative value and enforceability, would bring greater legal certainty to exchanges.
[THIS IS THE OSTENSIBLE PUBLIC POLICY GOAL THAT MASKS THE TRUE PURPOSE OF THE REGULATION: THE DISGUISED PROTECTIONISM OF CIVIL LAW NOTARIES, ESPECIALLY THOSE IN FRANCE, FROM EU, UK & US COMPETITION].
This is why, on the basis of this study and its results, the CNUE supports the creation of a Community framework that is applicable in exactly the same way to all authentic acts within its scope, and it calls on the European institutions to consider creating such a framework. The CNUE considers that this contribution will add to discussions before the vote in plenary session on 18 December 2008 of the report by MEP Manuel Medina Ortega (PES, Spain) on the creation of a European Authentic Act, and the publication at the beginning of 2009 of a Green Paper on the subject by the European Commission.
[THE STUDY FOLLOWS IMMEDIATELY BELOW]
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http://www.cnue-nouvelles.be/en/000/actualites/aae-etude-acte-authentique-final-25-11-2008-en.pdf
Comparative Study on Authentic Instruments National Provisions of Private Law, Circulation, Mutual Recognition and Enforcement, Possible Legislative Initiative by the European Union: England, France, Germany, Poland, Romania, Sweden
http://www.cnue-nouvelles.be/en/000/actualites/aae-etude-acte-authentique-final-25-11-2008-en.pdf
Comparative Study on Authentic Instruments National Provisions of Private Law, Circulation, Mutual Recognition and Enforcement, Possible Legislative Initiative by the European Union: England, France, Germany, Poland, Romania, Sweden
Study for the European Parliament
By the Council of the Notariats of the European Union (No. IP/C/JURI/IC/2008-019)
Nov. 25, 2008
Nov. 25, 2008
…1.1. Aim of the study
The aim of this study is to provide an in-depth and objective comparative analysis of the national provisions of private law and private international law in the field of authentic instruments (or authentic acts) with special focus on their mutual recognition and enforcement within selected EU Member States in order to evaluate if a legislative initiative of the EU in this field is worthwhile or necessary.
1.2. Geographic scope of the study
This study examines authentic instruments in six EU Member States, chosen as examples of different legal systems coexisting within the EU, namely:
- England (as an example of the common law legal system);
- France (as an example of the civil law or roman legal system, subtype of Code Napoleon);
- Germany (as an example of the civil law or roman legal system, subtype of the Germanic system);
- Poland and Romania (as examples of the civil law or roman legal system, subtype new Member States); and
- Sweden (as an example of the Nordic or Scandinavian legal system).
In making this selection, preference has been given to countries, which are generally regarded as typical within each legal system.
2. Authentic instruments as the cornerstone of preventive justice limited to Civil Law countries
2.1. No authentic instruments for contracts in the Common Law and in the Nordic legal systems
Examining the examples of England and Sweden, this study reinforces the traditional view, that the concept of authentic instruments for contracts or other declarations is not recognized in the Common Law and Nordic legal systems. In particular, the functions of the English general notaries can be compared to the certification of signatures rather than to the issue of authentic instruments.
2.2. Authentic instruments as the cornerstone of preventive justice in Civil Law countries
The concept of authentic instruments is based on the Civil Law concept of preventive justice. In fact, authentic instruments are the cornerstones of the concept of “preventive justice” (FR justice préventive; DE vorsorgende Rechtspflege; PL jurysdykcja prewencyjna; RO justiţie preventivă).
- Under the concept of preventive justice, the state does not just become involved in deciding legal disputes ex post (“contentious jurisdiction”; FR juridiction contentieuse; DE streitige Gerichtsbarkeit). Instead, it provides for a preventive legal control through authentication by authentication authorities (in particular by civil law notaries as external holders of a public office) for transactions with a particular economic and/or personal importance to the public interest or to the parties concerned.
[GENERALLY SPEAKING, IN OTHER WORDS, AUTHENTIC ACTS ADMINISTRATIVE PRACTICE PREEMPTS LITIGATION]
- Obliged by law to be as neutral as a judge, the authenticating official has to ensure that contractual provisions fully comply with the law (preventive legality control), that the parties have full (mental and legal) capacity to enter into their intended agreement and that they have fully understood the legal implications of their commitments. Otherwise, the official is required by law to refuse to complete the transaction.
- The idea underlying this system is to establish legal certainty and legal security by means of authentic instruments in order to avoid costly and time-consuming litigation about the validity and meaning of contractual provisions after the transaction has been concluded.
3. Definition of authentic instruments
Present EC Law: authentic instruments have been defined by the European Court of Justice in the Unibank decision1, following the Jenard-Möller Report, and by the EC legislator in Article 4 (3) (a) Regulation (EC) No 805/2004 on the European Enforcement Order2:
- An authentic instrument is an instrument which has been established by a public authority or other authority empowered for that purpose by the Member State in which it originates;
- in the required form;
- and the authenticity must relate not only to the signatures, but also to the and content of the instrument.
Thus, EC law looks to national laws concerning authenticating authorities and authentication procedures.
National Law: This definition is consistent with the existing definitions in the national laws of the four civil law systems examined in this study (France, Germany, Poland and Romania).
In those systems of law, authentic instruments are defined as follows:
- The instrument has to be issued by a public authority or an official.
- The authenticating authority or official has to be empowered to authenticate the type of act in question.
- The authenticating authority or official has to act within its competence in issuing authentic instruments.
- The authenticating authority or official must follow a specific authentication procedure.
- It must also follow the relevant rules on the formalities for drawing up and issuing authentic instruments.
- The resulting legal effect is that the authentic instrument provides conclusive proof of the content of the instrument.
- Generally, obligations arising from authentic instruments are enforceable (in some States by operation of law; in other States if a specific submission to enforcement is contained in a declaration in the authentic instrument).
Proposal: There is no need to change the existing definitions (although their wording might be formulated more precisely).
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- Obliged by law to be as neutral as a judge, the authenticating official has to ensure that contractual provisions fully comply with the law (preventive legality control), that the parties have full (mental and legal) capacity to enter into their intended agreement and that they have fully understood the legal implications of their commitments. Otherwise, the official is required by law to refuse to complete the transaction.
- The idea underlying this system is to establish legal certainty and legal security by means of authentic instruments in order to avoid costly and time-consuming litigation about the validity and meaning of contractual provisions after the transaction has been concluded.
3. Definition of authentic instruments
Present EC Law: authentic instruments have been defined by the European Court of Justice in the Unibank decision1, following the Jenard-Möller Report, and by the EC legislator in Article 4 (3) (a) Regulation (EC) No 805/2004 on the European Enforcement Order2:
- An authentic instrument is an instrument which has been established by a public authority or other authority empowered for that purpose by the Member State in which it originates;
- in the required form;
- and the authenticity must relate not only to the signatures, but also to the and content of the instrument.
Thus, EC law looks to national laws concerning authenticating authorities and authentication procedures.
National Law: This definition is consistent with the existing definitions in the national laws of the four civil law systems examined in this study (France, Germany, Poland and Romania).
In those systems of law, authentic instruments are defined as follows:
- The instrument has to be issued by a public authority or an official.
- The authenticating authority or official has to be empowered to authenticate the type of act in question.
- The authenticating authority or official has to act within its competence in issuing authentic instruments.
- The authenticating authority or official must follow a specific authentication procedure.
- It must also follow the relevant rules on the formalities for drawing up and issuing authentic instruments.
- The resulting legal effect is that the authentic instrument provides conclusive proof of the content of the instrument.
- Generally, obligations arising from authentic instruments are enforceable (in some States by operation of law; in other States if a specific submission to enforcement is contained in a declaration in the authentic instrument).
Proposal: There is no need to change the existing definitions (although their wording might be formulated more precisely).
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1. European Court of Justice (ECJ), Judgement of 17 June 1999 - C-260/97, Unibank, ECR 1999, p. I-3715.
2. Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims, OJ L 143, 30.4.2004, p. 15.
4.1. Abolition of apostille
Present situation:
- In order for its core legal effects – heightened probative value and enforceability – to be recognised, an authentic instrument needs to be authentic (or ”genuine“) in the sense that it has been established by the public official from whom it appears to originate. While under national law the four civil law systems examined in this study there is a legal presumption of authenticity for domestic authentic instruments, authenticity usually needs to be positively proven where instruments are used cross-border. This has traditionally been done by following the procedure known as legalisation.
- The Hague Convention of 5 October 1961 which is applicable to all EU Member States has replaced legalisation with the apostille procedure.
- There are some general bilateral agreements between Member States abolishing the need for an apostille and some multilateral agreements (mostly on specific subject matters), which some Member States have ratified. However, these are far from being universally applicable within the EU. In particular, a European Convention abolishing legalisation of documents in the Member States of the European Communities3 has never come into force.
- The apostille procedure is an obstacle both in terms of time and money to the unhindered circulation of authentic instruments within the EU.
- Under EC Regulations already in force concerning the free circulation and enforceability of certain types of authentic instruments (Brussels I Regulation4, Brussels II bis Regulation5 and the Regulation on the European Enforcement Order), the need for an apostille has already been abolished.
We propose to abolish the requirement for an apostille completely between all EU Member States. In a European Area for Justice, there should generally be no procedural conditions to be fulfilled before an authentic instrument created in one Member State can effectively be used in another.
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3 Convention Abolishing the Legalisation of Documents in the Member States of the European Communities, done at Brussels on the 25th May 1987.
3 Convention Abolishing the Legalisation of Documents in the Member States of the European Communities, done at Brussels on the 25th May 1987.
4 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 12, 16.1.2001, p. 1.
5 Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, OJ L 338, 23.12.2003, p. 1.
… 1.2.1. Defining criteria
If we compare these definitions, their criteria are almost identical in the four civil law systems analyzed:
- The instrument has to be issued by a public authority or by an official.
- The authenticating authority or official has to be empowered for authentication of this act (either by an empowerment to authenticate in general, or a specific empowerment for certain types of document or subject matter).
- The authenticating authority or official has to act within its competence for establishing authentic instruments.
- The authenticating authority or official must follow a specific authentication procedure.
- It must also follow the specific rules on the form of how to draw up and issue the authentic instrument.
Sometimes the legal effects of an authentic instrument are regulated in the same article as the definition. There are two main legal effects:
- conclusive proof of the content of the instrument (and not only of the signature); and
- (if the instruments authenticates a contract or another legal act by the parties) enforceability (which might require a specific submission to enforcement).
1.3. Types of authentic instrument
Authentic instruments might be categorized by various factors:
- either by the authenticating authority (notarial acts, authentic instruments by courts, authentic instruments by administrative agencies), which seems to be the usual categorization in the French legal doctrine;
- by the area of law to which they relate to (civil law, administrative law, procedural law), which are defined differently in Polish law; or
- by the nature of their content (contracts and other declarations, decisions and other official acts, statements of fact), which is the distinction of the German law (§§ 415 ss.ZPO).
It might be useful to explain the last distinction by reference to the content of the instrument. Here one can distinguish three basic types:
- authentic instruments on contracts or other juridical acts (FR acte juridique; DE Rechtsgeschäft; RO act juridic) or generally on declarations of intention (FR déclaration de volonté; DE Willenserklärung; RO declaraţii de voinţă) or on other declarations of persons (FR déclaration; DE Erklärung; RO declaraţie) - whether of legal significance or not (DE § 415 ZPO);
- decisions and other official acts or generally declarations of the public authority itself (DE § 417 ZPO); and finally
- authentic instruments about (other) facts (Tatsachen) (DE § 418 ZPO)19.
This distinction is particularly important, because in most civil law systems competence to authenticate differs according to the content of the instrument20:
- The power to authenticate contracts and other declarations by the parties has generally been entrusted to the civil law notaries.
- While the power to authenticate facts (with the probative value attached to the instrument) generally is given to specific authorities limited for specific facts (e.g. to the civil status registers concerning the facts of birth or death).
- Other public authorities generally are only competent to authenticate their own official acts, as for example the decisions of an administrative authority or of a court: The public authority may authenticate these acts without having to refer to an authenticating official.
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19 A similar distinction is made by the Romanian jurisprudence.
20 See also Part One, par. 5.
… 2. Do similar instruments exist in the Common Law and Nordic legal systems?
2.1. England
2.1.1. No authentic instrument
England has no equivalent of the civil law system of preventive justice.
Consequently, English law – like the whole of the Common Law legal family – has no concept of authentic instruments either23. The Common Law system does not provide for any contractual instrument issued by a neutral official, which gives full proof of its content and can be enforced without further judicial examination. There is no undisputed about this among the representatives of the Common Law themselves24. In spite of many interconnections between Common law and Civil law in general, both legal families have developed along separate paths in this respect25.
So we have to look whether there is any similar instrument equivalent to an authentic instrument.
2.1.2. Public documents
English law does give some special evidentiary effect to public documents. According to Section 7(2) of the Civil Evidence Act, “public documents (for example, public registers, and returns made under public authority with respect to matters of public interest) are admissible as evidence of facts stated in them”26.
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… 2. Do similar instruments exist in the Common Law and Nordic legal systems?
2.1. England
2.1.1. No authentic instrument
England has no equivalent of the civil law system of preventive justice.
Consequently, English law – like the whole of the Common Law legal family – has no concept of authentic instruments either23. The Common Law system does not provide for any contractual instrument issued by a neutral official, which gives full proof of its content and can be enforced without further judicial examination. There is no undisputed about this among the representatives of the Common Law themselves24. In spite of many interconnections between Common law and Civil law in general, both legal families have developed along separate paths in this respect25.
So we have to look whether there is any similar instrument equivalent to an authentic instrument.
2.1.2. Public documents
English law does give some special evidentiary effect to public documents. According to Section 7(2) of the Civil Evidence Act, “public documents (for example, public registers, and returns made under public authority with respect to matters of public interest) are admissible as evidence of facts stated in them”26.
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23 E.g. ZWEIGERT/KÖTZ, Einführung in die Rechtsvergleichung, volume II (1969), p. 44: “The Notary in his function as a public official entrusted with the establishment of authentic instruments is unknown in the legal concepts of the Anglo-American legal family. There is no such thing as the ”notarielle Urkunde“ (§ 128 BGB), the “Notariatsakt“ (e.g. § 551 ABGB) or the “acte authentique“ (Art. 1312 Code civil) under Common Law“ (own translation from the German original). Cf. also LEUTNER, Die vollstreckbare Urkunde im europäischen Rechtsverkehr (1996), pp. 138 ss. (with further references); SCHLOSSER, EUZivilprozessrecht, 2nd edit. (2003), Art. 57 EuGVVO note 2. In detail LANGHEIN, Kollisionsrecht der Registerurkunden, p. 39 with further references: “Notarial authentication (…) and the authentic instrument are unknown to (the Common Law)“ (translated from German).
24 Cf. e.g. CLANCY, The Organisation and Function of the Profession of Notary in the United Kingdom, Notarius International, Vol. 5, 2000, p. 102: “(…) the Anglo-American legal system does not recognise the role of the publicly certified instrument (…).” Ibid., p. 103: “(…) the notarial act and notarial evidence have never enjoyed the status of “authenticity” in common law jurisdictions.” In the same sense CLAUDET, National Report England, Notarius International 2002, 39, 40.
25 As will be shown later in Part Two, the fact that the concept of the authentic instrument is unknown to England, results on the Community level among other things in the consequence that there is no need for transferring those provision of Community law into national law that deal with the cross-border recognition and enforcement of notarial authentic instruments as far as the establishment of such instruments is concerned. Consequently, the Commisson’s European Judicial Civil Atlas clearly points out with regard to the establishment of a European enforcement order in England based on an authentic instrument according to Article 25 of the Regulation (EC) No 805/2004 of the European Parliament and of the Council creating a European Enforcement Order for uncontested claims: „While Authentic Instruments from other Member States will be enforced in England and Wales they are not produced in England and Wales. Therefore there is no need to designate an authority to certify them.”
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26 See also Wilton & Company v. Phillips (1903) 19 T.L. R. 390.
However, public documents under English law must not be mistaken for authentic instruments. A public document is rather different from the authentic instrument in that it only relates to the official business of public agencies or other public officials. Consequently, a private juridical act does not achieve any particular public or authentic status by virtue of the participation of a notary in the setting up of the documents.
In order for a document to enjoy the status of a public document, it must have a public origin and a public subject matter, and must be in the form of a public document with some indication of authenticity as what it purports to be.
- Specifically, a public document must on its face be issued by a public agency or official acting in the pursuit of his public duties. Public documents can be issued by any organ of national or local government including courts as well as executive, legislative and administrative bodies.
- The document must relate to the official business of the agency. Examples would be a birth certificate issued by the Registrar of Births, or a report of a Parliamentary committee, or a judgment of a court. Private business documents do not achieve public document status merely by being typed on a government letterhead.
- Finally, almost all public issuers have some form by which their issued documents are identified as genuine – usually a seal, an official's signature, or both.
2.1.3. Notarial documents
Documents set up by English general notaries27 mainly serve as a mere certification in the above-mentioned sense, where the professional does not assume any responsibility for the legal correctness of the content and the validity of the underlying agreement.
- English law does not require a notarial instrument for any type of contract or other legal act. Also, the notarial procedure, the form of a notarial instrument and the duties of the English general notaries are not regulated by statute in the same way as those of their civil law counterparts. E.g. there are no provisions on legal control or on independent legal counsel to the parties. Unlike the civil law notary, the English general notary is not a neutral intermediary whose function is to counsel both parties and draft a balanced contract28
.
- Thus, the English notary only certifies the genuineness of a signature or the identicalness of a copy with the original. The document thus produced is not an authentic instrument.
- Consequently, such “notarisations” do not share the main legal effects of authentic instruments, i.e. enforceability and full probative value. Notarial acts do not have any explicit statutorily-based evidentiary status as sufficient proof of their contents and are not entitled to the particular evidentiary status of a public document under English law29; although they may have enhanced credibility in individual cases by virtue of the circumstances under which they were prepared or the mercantile context in which they are used. A recent amendment to English procedural rules makes a notarial signature sufficient proof of authenticity (in the sense of genuineness) of private documents30. That, however, just grants it the same status as a document with a certification of signature in civil law jurisdictions, not as an authentic instrument.
- English law does not know the civil law concept of an “executable title” based on a notarial act as is common in civil law jurisdictions. Only a judgment of a court can be made the subject of a civil execution process in favour of a private party. English notaries have no power to create a document that can be executed against a debtor or his property without first going to court, initiating a suit, and obtaining a court judgment.
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27 For English notaries in general see: BROOKS/HELMHOLZ/STEIN, Notaries Public in England since the Reformation, published for the Society of Public Notaries of London, Norwich, Erskine Press, 1991; READY, Brooke's Notary, 12th edit. 2002; SHAW, ‘Notaries in England and Wales; Modernising a profession frozen in time’, International Journal of the Legal Profession, 2000, vol. 7, no. 2, pp. 141-155; SHAW, ‘Notaries in England and Wales: What future in a climate of globalisation?’ Notarius International 1-2/2006, p. 43.
28 According to Section 6.2. of the Notaries Practice Rules 2001, a notary must not act for both parties to a transaction unless both have consented in writing; and he is satisfied that there is no conflict of interest between the parties, but where a conflict of interests exists or arises a notary may act or continue to act for both parties for the sole purpose of resolving or attempting to resolve that conflict of interest.
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29 E.g. see READY, Brooke's Notary (12th Edition, 2002), Sec. 6-08.
30 Rule 32 (20) of the Civil Procedure Rules.
… 2.1.5. Results for England
Thus our result for England is: there are neither authentic instruments for contracts or other private acts nor anything equivalent to authentic instruments in English law, just as the civil law concept of preventive justice is not known in England either.
- English formal requirements are about writing, witnesses and filing, but not about authentication.
- English notarial instruments are not similar to authentic instruments. They come closest to mere certifications of signature.
- English public documents do not record declarations by the parties, but relate to the official business of public agencies or other public officials only.
… 3.1.2. Comparative analysis
[THE TYPES OF BUSINESS TRANSACTIONS REQUIRING 'AUTHENTIC ACTS' REFLECT THE EXTENT OF THE DISGUISED PROTECTIONISM SOUGHT]
The comparative table shows that the legal acts for which the four civil systems require authentic instruments are similar, but not identical:
- In all four civil law systems studied, legal acts changing the civil status (such as recognition of paternity or consent to an adoption) usually require an authentic instrument (unless these acts fall within the exclusive competence of the courts anyway). These acts are of highest importance to the persons involved. Legal certainty as to family relations is also important to third parties.
- The same applies generally to matrimonial or antenuptial agreements, but does not in all civil law systems studied extend also to maintenance agreements. However, Germany recently introduced an authentication requirement for maintenance agreements, because it was generally considered to protect the weaker spouse from rash decisions, either during the marriage or in the course of divorce proceeding.
- In all four civil law systems studied, testaments can be made in notarial form, but other forms of testaments are also permitted. Only for a succession contract (DE Erbvertrag) which binds the parties, the German law requires mandatory authentication. The notarial form ensures that the testament has not been falsified. Also, it ensures that the will of the testator is recorded clearly and that the testator has been advised about its legal effects (e.g. about reserved portions or the various testamentary provisions permitted by the succession law).
- Also the transfer of a succession typically requires an authentic instrument. The underlying reason is both to prevent an unconsidered transfer and to provide legal certainty to heirs. In Romania, in cases of transfer of a succession an authentic instrument is mandatory, when land or pieces of land are part of the succession.
- Donations (or more precisely the promise to donate) require an authentic instrument in all four civil law systems studied. The donor should not be bound by a rash word, but only by a formal act undertaken after sufficient consideration of his or her promise.
- In land law, generally both the transfer of immovable property and the creation of limited rights in rem in land require an authentic instrument (or the latter at least a certification of signature) for the registration. The underlying idea is to ensure the functioning of the land register and to guarantee the legal certainty provided by the land register in combination with the underlying authentic instrument. For land, legal security is even more important than for movables – if a piece of land is in dispute, then it cannot be used securely. Nor can land be replaced (whereas movables often are generic).
- For the establishment of companies, three out of the four civil law systems studied require an authentic instrument (and the fourth system (FR) for one specific type of company), in particular for limited companies and for joint stock companies, some also for some types of partnership38.
- A transfer of shares requires formalities in two of the four civil law countries studied (DE, PL). The formal requirement is meant to ensure proof of the chain of title. In Germany the authentic instrument and the list of the partners which is based on the act of transfer even serves as the basis for good faith acquisitions39.
- Enforceable title may be established in all four civil law systems studied by authentic instruments, whereas in England and Sweden in general enforceable title cannot be created by a declaration by the parties (with minor exceptions, in particular concerning maintenance agreements in Sweden, concluded before the Swedish maintenance office).
The legal situation in England and Sweden (as the examples studied of the Common Law or the Nordic systems respectively) is very different:
- Many of the above-mentioned contracts or legal acts do not require any formalities at all.
- If there is any formal requirement, it is limited to writing (including the signature of the party) and sometimes also the attestation by two witnesses. The witnesses are meant to prevent fraud and to enhance the probative value.
- However, none of the legal acts for which civil law countries “typically” require an authentic instrument requires the involvement of any official in England and Sweden. Thus, there is no requirement of an impartial legal counsel and no legal control, which are the key elements of authentication requirements in the civil law countries.
The comparative table shows that the legal acts for which the four civil systems require authentic instruments are similar, but not identical:
- In all four civil law systems studied, legal acts changing the civil status (such as recognition of paternity or consent to an adoption) usually require an authentic instrument (unless these acts fall within the exclusive competence of the courts anyway). These acts are of highest importance to the persons involved. Legal certainty as to family relations is also important to third parties.
- The same applies generally to matrimonial or antenuptial agreements, but does not in all civil law systems studied extend also to maintenance agreements. However, Germany recently introduced an authentication requirement for maintenance agreements, because it was generally considered to protect the weaker spouse from rash decisions, either during the marriage or in the course of divorce proceeding.
- In all four civil law systems studied, testaments can be made in notarial form, but other forms of testaments are also permitted. Only for a succession contract (DE Erbvertrag) which binds the parties, the German law requires mandatory authentication. The notarial form ensures that the testament has not been falsified. Also, it ensures that the will of the testator is recorded clearly and that the testator has been advised about its legal effects (e.g. about reserved portions or the various testamentary provisions permitted by the succession law).
- Also the transfer of a succession typically requires an authentic instrument. The underlying reason is both to prevent an unconsidered transfer and to provide legal certainty to heirs. In Romania, in cases of transfer of a succession an authentic instrument is mandatory, when land or pieces of land are part of the succession.
- Donations (or more precisely the promise to donate) require an authentic instrument in all four civil law systems studied. The donor should not be bound by a rash word, but only by a formal act undertaken after sufficient consideration of his or her promise.
- In land law, generally both the transfer of immovable property and the creation of limited rights in rem in land require an authentic instrument (or the latter at least a certification of signature) for the registration. The underlying idea is to ensure the functioning of the land register and to guarantee the legal certainty provided by the land register in combination with the underlying authentic instrument. For land, legal security is even more important than for movables – if a piece of land is in dispute, then it cannot be used securely. Nor can land be replaced (whereas movables often are generic).
- For the establishment of companies, three out of the four civil law systems studied require an authentic instrument (and the fourth system (FR) for one specific type of company), in particular for limited companies and for joint stock companies, some also for some types of partnership38.
- A transfer of shares requires formalities in two of the four civil law countries studied (DE, PL). The formal requirement is meant to ensure proof of the chain of title. In Germany the authentic instrument and the list of the partners which is based on the act of transfer even serves as the basis for good faith acquisitions39.
- Enforceable title may be established in all four civil law systems studied by authentic instruments, whereas in England and Sweden in general enforceable title cannot be created by a declaration by the parties (with minor exceptions, in particular concerning maintenance agreements in Sweden, concluded before the Swedish maintenance office).
The legal situation in England and Sweden (as the examples studied of the Common Law or the Nordic systems respectively) is very different:
- Many of the above-mentioned contracts or legal acts do not require any formalities at all.
- If there is any formal requirement, it is limited to writing (including the signature of the party) and sometimes also the attestation by two witnesses. The witnesses are meant to prevent fraud and to enhance the probative value.
- However, none of the legal acts for which civil law countries “typically” require an authentic instrument requires the involvement of any official in England and Sweden. Thus, there is no requirement of an impartial legal counsel and no legal control, which are the key elements of authentication requirements in the civil law countries.
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38 For the role of the civil law notaries in companies law, see in particular: DE: FITZ/ROTH, Der Notar im Kapitalgesellschaftsrecht, JBl. 2004, 205; PRIESTER, Notar und Gesellschaftsrecht, DNotZ 2001, Sonderheft (special edition) p. 52*, 64*; RO: POPESCU, Contractul de societate, Ed. Lumina Lex, Bucureşti, 1996.
39 DE §§ 16, 40 GmbHG (reform as of 1.11.2008, BGBl. = OJ 2008 I, p. 2026); see BT-Drucks. (parliamentary materials of Bundestag, the lower house of Parliament) 16/6140, p. 44; HARBARTH, Gutgläubiger Erwerb von GmbH-Geschäftsanteilen nach dem MoMiG-RegE, ZIP 2008, 57; KÖNIG/BORMANN, Die Reform des Rechts der Gesellschaften mit beschränkter Haftung, DNotZ 2008, p. 652, 668 s.
38 For the role of the civil law notaries in companies law, see in particular: DE: FITZ/ROTH, Der Notar im Kapitalgesellschaftsrecht, JBl. 2004, 205; PRIESTER, Notar und Gesellschaftsrecht, DNotZ 2001, Sonderheft (special edition) p. 52*, 64*; RO: POPESCU, Contractul de societate, Ed. Lumina Lex, Bucureşti, 1996.
39 DE §§ 16, 40 GmbHG (reform as of 1.11.2008, BGBl. = OJ 2008 I, p. 2026); see BT-Drucks. (parliamentary materials of Bundestag, the lower house of Parliament) 16/6140, p. 44; HARBARTH, Gutgläubiger Erwerb von GmbH-Geschäftsanteilen nach dem MoMiG-RegE, ZIP 2008, 57; KÖNIG/BORMANN, Die Reform des Rechts der Gesellschaften mit beschränkter Haftung, DNotZ 2008, p. 652, 668 s.
3.2. Legal objectives of authentication requirements for contracts and other declarations
3.2.1. Prevention of undue haste
3.2.2. Guarantee of impartial and qualified counsel for the parties
3.2.3. Guarantee of reliable proof
3.2.4. Enforceability
3.2.5. Legal certainty
3.2.6. Legal control
Also the authentication of a contract serves as a legal control by the state:
- that might be preliminary legality control (FR contrôle légal préventif; DE vorbeugende Rechmäßigkeitskontrolle; RO control juridic preventiv);
- but includes also notification of controlling agencies (FR devoir de notification; DE Mitteilungspflichten; RO notificarea autorităţilor competente).
The legality control might cover various areas.
- In particular, the notarial intervention in authenticating a contract also obliges the notary to deny authentication and to notify the authorities in case of a suspicion of money laundering (FR blanchiment d’argent, DE Geldwäsche; RO spălarea banilor)50.
In particular, the authentication and the notification duties of the authenticating official might help the state in collecting taxes (FR faciliter la perception d’impôts ou de taxes).
- In some states, the notary is only obliged to notify the tax authorities concerning the acts authenticated by him (DE).
- In other states, the notary is also personally responsible for collecting or retaining the tax: e.g. in France and in Romania51, the notary acts as an unpaid auxiliary of the State in collecting taxes. If the legal act recorded in the authentic instrument is taxable, the notary is responsible for collecting the tax for the State. Therefore, the notary is obliged to verify the sincerity of the tax declarations by the parties and to withhold the registration rights due to the acts he has recorded. In principle, the notary is personally liable for the payment of the taxes arising from the authentic instruments authenticated by him.
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50 FR Article L. 562-1 Code on Money and Finances; DE § 11 GwG (Geldwäschegesetz = Law against Money Laundering, version of 13 August 2008 (BGBl. 2008 I, 1690); PL Article 2 Law of 16 November 2000 concerning the fight against money laundering and against the financing of terrorisme (Official Journal 2003 No 153, 1505; 2004 No 62, 577); RO Article 8(e) Law No 656/2002 on the prevention and punishment of money laundering.
51 Article 77 ss. Law No 573/2003 - Romanian Fiscal Code.
… Part Three
REGULATORY INTERVENTION BY THE EUROPEAN UNION
After having analysed the existing national provisions on authentic instruments in Part One and the existing rules on the circulation of authentic instruments, this study deals in the following Part Three with the question of whether legislative action at EU level is needed to promote the free circulation of authentic instruments in cross-border cases – and if so, how such legislation should be framed.
… 1. Concept of authentic instrument not uniformly recognized throughout the EU
The findings in Parts I und II reinforce the traditional notion that the concept of preventive justice, while being recognised in all Member States adhering to the Civil Law System, is not at all recognised in those countries belonging to the Common Law or Nordic legal systems. Consequently, the authentic instrument that is the core legal means and very foundation of the whole concept of preventive justice, has been found not to exist in the latter sets of countries. In spite of many interconnections between Common Law and Civil Law in general, both legal families have developed along separate paths in this respect.
The study confirmed this finding by taking the situations in England and Sweden as examples. For England, the study found that in line with academic opinion among the representatives of the Common Law, there is no instrument like the authentic instrument. Rather, the activities of English general notaries for the most part boil down to mere certifications that fall short of producing authentic instruments.
As the study found, since the concept of the authentic instrument is not recognised by Common Law systems, in consequence there is no need for transferring those provisions of Community law into national law that deal with the cross-border recognition and enforcement of authentic instruments as far as the establishment of such instruments is concerned. Consequently, the Commission’s European Judicial Civil Atlas rightly points out, with regard to the establishment of a European enforcement order in England, based on an authentic instrument according to Article 25 of the Regulation (EC) No 805/2004 of the European Parliament and of the Council creating a European Enforcement Order for uncontested claims:
“While Authentic Instruments from other Member States will be enforced in England and Wales they are not produced in England and Wales. Therefore there is no need to designate an authority to certify them.” 310
… This also applies to the other Common Law countries and to the Nordic countries…With authentic instruments being produced on the Continent, but not in the Common Law or Nordic countries, the Common Law or Nordic countries already feel at a certain disadvantage since, under existing Community legislation with regard to the circulation of authentic instruments311, they have to accept the cross-border circulation and enforcement of foreign authentic instruments without being able to issue such instruments themselves.
Consequently, it might be argued that any further Community intervention might even deepen this gulf between the Common Law/Nordic approach on the one hand, and the Continental-European model on the other. As a matter of fact, the English national reporters of this study pointed to this concern very explicitly and suggested excluding the Common Law countries and the Nordic countries from the scope of application of any further Community action on the free circulation of authentic instruments.
50 FR Article L. 562-1 Code on Money and Finances; DE § 11 GwG (Geldwäschegesetz = Law against Money Laundering, version of 13 August 2008 (BGBl. 2008 I, 1690); PL Article 2 Law of 16 November 2000 concerning the fight against money laundering and against the financing of terrorisme (Official Journal 2003 No 153, 1505; 2004 No 62, 577); RO Article 8(e) Law No 656/2002 on the prevention and punishment of money laundering.
51 Article 77 ss. Law No 573/2003 - Romanian Fiscal Code.
… Part Three
REGULATORY INTERVENTION BY THE EUROPEAN UNION
After having analysed the existing national provisions on authentic instruments in Part One and the existing rules on the circulation of authentic instruments, this study deals in the following Part Three with the question of whether legislative action at EU level is needed to promote the free circulation of authentic instruments in cross-border cases – and if so, how such legislation should be framed.
… 1. Concept of authentic instrument not uniformly recognized throughout the EU
The findings in Parts I und II reinforce the traditional notion that the concept of preventive justice, while being recognised in all Member States adhering to the Civil Law System, is not at all recognised in those countries belonging to the Common Law or Nordic legal systems. Consequently, the authentic instrument that is the core legal means and very foundation of the whole concept of preventive justice, has been found not to exist in the latter sets of countries. In spite of many interconnections between Common Law and Civil Law in general, both legal families have developed along separate paths in this respect.
The study confirmed this finding by taking the situations in England and Sweden as examples. For England, the study found that in line with academic opinion among the representatives of the Common Law, there is no instrument like the authentic instrument. Rather, the activities of English general notaries for the most part boil down to mere certifications that fall short of producing authentic instruments.
As the study found, since the concept of the authentic instrument is not recognised by Common Law systems, in consequence there is no need for transferring those provisions of Community law into national law that deal with the cross-border recognition and enforcement of authentic instruments as far as the establishment of such instruments is concerned. Consequently, the Commission’s European Judicial Civil Atlas rightly points out, with regard to the establishment of a European enforcement order in England, based on an authentic instrument according to Article 25 of the Regulation (EC) No 805/2004 of the European Parliament and of the Council creating a European Enforcement Order for uncontested claims:
“While Authentic Instruments from other Member States will be enforced in England and Wales they are not produced in England and Wales. Therefore there is no need to designate an authority to certify them.” 310
… This also applies to the other Common Law countries and to the Nordic countries…With authentic instruments being produced on the Continent, but not in the Common Law or Nordic countries, the Common Law or Nordic countries already feel at a certain disadvantage since, under existing Community legislation with regard to the circulation of authentic instruments311, they have to accept the cross-border circulation and enforcement of foreign authentic instruments without being able to issue such instruments themselves.
Consequently, it might be argued that any further Community intervention might even deepen this gulf between the Common Law/Nordic approach on the one hand, and the Continental-European model on the other. As a matter of fact, the English national reporters of this study pointed to this concern very explicitly and suggested excluding the Common Law countries and the Nordic countries from the scope of application of any further Community action on the free circulation of authentic instruments.
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310 Commission’s European Judicial Atlas in Civil Matters: http://ec.europa.eu/justice_home/judicialatlascivil/html/rc_information_en.htm
311 See infra par. 3.
310 Commission’s European Judicial Atlas in Civil Matters: http://ec.europa.eu/justice_home/judicialatlascivil/html/rc_information_en.htm
311 See infra par. 3.
… 6.9. Interim conclusion on the legal areas relevant for regulatory intervention
To sum up our findings on the need for Community intervention, this study began by tackling an issue of general concern in this context. This is that as authentic instruments are the product of the continental European system of preventive justice they are not produced in those legal systems following the common law approach like England and Wales, Ireland, and the Nordic countries. Based on the concerns pointed out in the English country report, the study thus raised the question whether any regulatory intervention on the part of the Community that specifically deals with the circulation of authentic instruments might even serve to deepen the already existing gulf between the civil law Member States and the common law States, in that the latter would have to recognise and enforce foreign authentic instruments without being able to produce them themselves. This study found this to be a primarily political issue, though, and therefore refrained from dealing with it in greater detail.
This issue aside, the study found that one has to differentiate between kinds of authentic instrument. As regards the function of authentic instruments as enforcement titles the various EC regulations enabling a free movement of titles already existing or at least about to be enacted already seem to cover most situations. Nevertheless, an aspect that might deserve further attention on the part of the Community legislator is the diversity of rules regarding the exequatur. As analysed above, the older regulations Brussels I and Brussels II bis, still provide for some form of simplified exequatur, whereas the newer EEO Regulation does away with any kind of exequatur. The study found reasons that given today’s advanced state of European integration with regard to the free circulation of enforcement titles the time may be ripe for one single and uniform regulation substituting all existing instruments and repealing within its scope of application the exequatur.
As regards authentic instruments subject to registration in national public registers the study found that they are generally not covered by European legislation. The study found, though, that Community legislator’s reluctance in this field does not come by mere accident but rather is based on certain well-founded grounds. In particular, the differences both in structure, organization and proceedings of the various national public register systems in place in the Member States including the differences regarding the nature and extent of public faith assigned to register entries as well as the close interconnection between those peculiarities of national registration law on the one hand and the way of drawing up an authentic instrument subject to entry into a public register on the other strongly speaks against including such instruments within the scope of EU regulatory intervention. This seems to be true at least as long as the national registers remain within the regulatory domain of the Member States.
The study thus concluded that for the time being there is no need for regulatory intervention particularly with regard to authentic instruments dealing with rights in rem in immovable property that are the basis of registration in a public real estate register.
With regard to authentic instruments dealing with company law matters the study with similar reasoning came to doubt the need for intervention for instruments subject to registration. Against the current development of European company law and the ever-increasing need for companies to do cross-border business, though, the study decided in favour of incorporation of authentic instruments in this area into future regulatory intervention by the Community.
Also, given the already more-advanced state of European integration for authentic instruments on civil status the study found reasons speaking in favour of Community intervention to further facilitate the free circulation of these instruments. In particular, the study pointed to apostille procedures and the related cross-border recognition of the instrument’s heightened probative value.
With regard to authentic instruments not subject to entry into national public registers the study found that here, too, repealing the apostille procedure and substituting it by an expost facto control in cases of serious doubt as to the authenticity of the instrument, as well as providing for a general cross-border recognition of the instrument’s probative value, might contribute to further facilitating the free circulation of authentic instruments.
It needs to be pointed out, though, that a serious evaluation of the issue of need of regulatory intervention ultimately remains difficult given the lack of well-founded reliable data both on the extent of today’s cross-border use of authentic instruments and on the kind of possible problems connected to any such cross-border use in any given case.
… 2. Soft instruments like recommendations and furtherance of cross-border networking systems
… Especially against the background of the gulf analysed above between the Member States following the civil law system of preventive justice and hence knowing the authentic instrument and the common law States where such instruments are not produced one might indeed consider some kind of a “soft” Community-based development of networking systems rather than a binding legislative measure.
… Chapter III
Scope and content of a possible legislative instrument
… 2. Geographic scope
One of the main political decisions will be whether or not the proposed new rules should regulate only the mutual recognition and enforcement of authentic instruments within the Civil Law Member States, or whether also the Common Law and the Nordic Member States should be required to recognise and enforce authentic instruments.
We propose that the new rules should apply to all Member States (except Denmark, but including the United Kingdom if it chooses so). This is the approach of all existing and proposed Regulations. The Common Law and the Nordic Member States are already obliged to enforce authentic instruments under the Brussels I and II bis Regulations and the EEO Regulation. Abolishment of the apostille and the general recognition of the probative value of authentic instruments do not seem to place too high a burden on these countries.
… 2.2. Effects on the English judicial system
Our national reporters for England, Prof. Murray and Prof. Watson, were highly critical of this approach. They favour a restriction of the new rules to the Civil Law Member States. In their opinion, it would be too intrusive and run against existing principles of the Common Law evidence rules to require a Common Law judge to accept strict rules of evidence for foreign authentic instruments and to deny the judge any discretion in weighing the documentary evidence. So applying the probative force of authentic instruments also in England etc., would introduce a completely new set of evidence rules…
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http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+REPORT+A6-2008-0451+0+DOC+PDF+V0//EN
EUROPEAN PARLIAMENT REPORT with recommendations to the Commission on the European Authentic Act (2008/2124(INI)), Committee on Legal Affairs, Rapporteur: Manuel Medina Ortega (A6-0451/2008) (11/19/08)
MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION with recommendations to the Commission on the European Authentic Act (2008/2124(INI))
The European Parliament,
… K. whereas the key characteristic of the authentic act is that it has a greater probative value than a private agreement and that this probative value, which must be accepted by the judge, is regularly conferred on it in Member State legislation on account of the trust placed in acts drawn up, in the context of legal transactions, by a public officer appointed for this purpose or by a public authority3,
L. whereas the prerequisite for the probative value of an authentic act is recognition of its authenticity, in that it emanates from a public official vested with the power to draw up authentic acts or from a public authority; whereas mutual trust in the legal systems of the Member States justifies making authenticity verification procedures only applicable in future when serious doubts arise as to the veracity of the document,
… N. whereas differences in the structure and organisation of public registry systems in the field of property ownership, as well as differences concerning the nature and scale of the public confidence placed in them, mean that the transfer of immovable property rights has to be excluded from a future Community instrument, given the close correlation between the method of drawing up an authentic act and entry into the public register,
O. whereas, as regards the recognition of legal decisions across the Union, this exclusion corresponds to attributing exclusive competence to the courts where the property is situated for all appeals relating to immovable property rights and to the courts on the territory where the public register is kept for all appeals relating to the validity of entries in the public register4,
P. whereas the institution of the authentic act does not exist in common-law systems, in particular the law of England and Wales, or in Nordic countries; whereas although in England and Wales there exist solicitors who act as notaries public and the profession of scrivener notaries, those lawyers cannot produce authentic acts, but merely certify signatures, and accordingly, in adopting any legislation on European authentic acts, action should be taken to ensure that no confusion can arise in this respect; whereas, in turn, every precaution should be taken to ensure that authentic acts cannot be used in countries where such acts cannot be made by nationals of those countries in order to circumvent procedures prescribed by the those countries' legal systems (e.g. grant of probate); whereas, in addition, in order to raise awareness among legal professionals in those Member States where authentic acts do not exist, a suitable information campaign should be initiated by the Commission and every effort should be made to ensure that common law legal professionals are aware of the work done by civil-law public officials and of the potential advantages for their clients – in terms of, in particular, legal certainty – of using authentic acts in transactions which they are proposing to conclude in those countries where that instrument is used; whereas this underscores a need often expressed by Parliament's Committee on Legal Affairs for trans-European networks of legal practitioners, information campaigns and material and common training, which the Commission is called upon to promote,
Q. whereas the Regulation requested shall not apply either to matters relating to the applicable law covered by other Community instruments or to questions relating to the competence, organisation and structure of public authorities and officials, including the authentication procedure, which come under the jurisdiction of the Member States,
1. Considers that mutual trust in the field of law within the Community justifies the future abolition of procedures for checking the accuracy of authentic acts in cross-border matters; considers that this recognition of an authentic act for the purpose of its use in the requested Member State can only be refused in the case of serious and substantiated doubts as to its authenticity, or if recognition is contrary to public policy in the Member State requested;
2. Requests the Commission to submit to Parliament, on the basis of Article 65(a) and the second indent of Article 67(5) of the EC Treaty, a legislative proposal on establishing the mutual recognition and enforcement of authentic acts;
3. Stresses that recognition may not result in giving a foreign act greater effect than a national act would have;
4. Asks that the Regulation requested apply to all authentic acts on civil and commercial matters except those that relate to property and should or may be subject to entry or mention in a public register;
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3 Conclusion of Advocate-General La Pergola of 2 February 1999 in the aforementioned Unibank Case, point 7.
4 See Article 22, points 1 and 3 of Regulation (EC) No 44/2001.
3 Conclusion of Advocate-General La Pergola of 2 February 1999 in the aforementioned Unibank Case, point 7.
4 See Article 22, points 1 and 3 of Regulation (EC) No 44/2001.
…ANNEX TO THE MOTION FOR A RESOLUTION: DETAILED RECOMMENDATIONS ON THE CONTENT OF THE PROPOSAL REQUESTED
…EXPLANATORY STATEMENT
I. Background points
Europe is growing and Europeans are required to be more and more mobile within this area whose borders are constantly expanding. The movement of citizens within the European Union is, however, impeded by problems with the movement of authentic acts. The concept of the authentic act exists in most Member States. Member States on the European continent with a civil law jurisdiction have a two-pillar system. In contrast to countries with Anglo-Saxon and Scandinavian laws, the State is not just involved ex post as regards judicial decisions ("the administration of contentious justice"), but submits legal acts with major consequences in terms of personal or property rights to mandatory preventive scrutiny of their legality through authentication of the legal act by a public official or public authority ("administration of preventive justice"; "voluntary jurisdiction"). The administration of preventive justice is thus separate from contentious justice. The authentic act is intended to avert future litigation relating to the basic legal act whilst making it easier for the judge to take decisions in the case of legal proceedings by virtue of the binding probative value attached to the authentic act.
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http://european-tax-adviser.com/wordpress/wp-content/uploads/2008/11/plr_04_08.pdf
Professional Law Report
Confédération Fiscale Européenne (CFE)
5 November - 2008 / Edition 4
…EUROPEAN COMMISSION
Commission calls on notaries to work towards building “European legal area”
On 11 September, in Warsaw, at the opening of the 2nd Congress of EU Civil Law Notaries (CNUE), the European Commission invited all those in the law sector to play an active part in creating a true European area of justice. “We need the practitioners that you are and the great European judicial tradition” to establish a European area of legal certainty, said European Justice Commissioner Jacques Barrot during the opening session. Nearly 800 legal representatives from 21 EU Member States and partner countries attended the Congress organised by the Conference of Notaries of the European Union (CNUE). All those taking part (politicians, professionals in the field and researchers) have been called upon to discuss the theme: “A European area of legal certainty: a value for citizens and families, an by the Conference of Notaries of the European Union (CNUE). All those taking part (politicians, professionals in the field and researchers) have been called upon to discuss the theme: “A European area of legal certainty: a value for citizens and families, an opportunity for businesses”.
Although 8 million citizens reside in a Member State other than their own, “law does not move with those people”, Mr Barrot commented, leading in to his speech. “The legal obstacles to citizens’ mobility must be removed”, he said, placing emphasis on the principle of mutual recognition of decisions and legal acts, which in his view are the “cornerstone” for developing the European area of justice. The Commissioner spoke of three workshops underway, which go to illustrate the construction of the European legal area and for which the European notary sector must make its contribution: inheritance, authentic acts and matrimonial regimes.
On the subject of inheritance, Mr Barrot announced his intention to present a legislative proposal during the first half of 2009 for finding solutions on applicable legislation and providing for the recognition of jurisdictional decisions. This should facilitate the 50-100 thousand transnational legacies each year within the EU. The proposal will also include the establishment of a European certificate of inheritance to facilitate proof of the identity of heirs to a legacy. Mr Barrot also stressed the role played by the European Network of Registers of Wills (ENRW), an initiative of the European notaries, which should lead to the interconnection of registers of wills from all Member States. Other work in progress is on authentic acts. According to Mr Barrot, this is “essential to give citizens greater legal security”. He went on to add that “the authenticity of an act established by a public authority may be a very strong base for the European legal order”. The Commissioner has announced his intention to launch a Green Paper in 2009. “‘The aim is to generalise and to promote the recognition of authentic acts”, he explained. “Hitherto, recognition has been done in a pragmatic way. What we now need is more horizontal reflection”, the Commissioner said. The last work that the Commission intends to tackle is that on matrimonial regimes. Some 2,5 million properties located in the EU are owned byspouses in Member States other than the Member States of which they are nationals. In this context, “division is a problem” when couples break up, Mr Barrot said, specifying that he will put forward a proposal during 2009. Once again, he pointed out that it was not a matter of harmonising material law but rather of harmonising the rules of a conflict in law proposal during 2009. In addition to these legislative proposals, the vice-president of the Commission spoke of other ways to increase confidence between professionals in the justice sector, in particular the European Judicial Network (EJN, see below) and e-Justice.
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http://www.ecla.org/documents/Brussels%20Agenda%20-%20November%202008.pdf
The Law Societies – Brussels Agenda Newsletter
Nov. 1, 2008
…RECOGNITION AND ENFORCEMENT
European Parliament proposes a European Authentic Act
The Legal Affairs Committee of the European Parliament has taken the initiative to propose a common system for the mutual recognition and enforcement of authentic acts around the EU. Whilst not a formal legislative proposal, it is presented as a recommendation to the European Commission. The rapporteur, Manuel Medina Ortega MEP, outlines that such a system would make life easier for citizens and businesses, mainly through dispensing with the formalities on legalisation and apostilles and simplifying registration procedures. From the UK perspective however, this initiative throws up a number of problems. Not only does it fail to take into account analogous legal documents, such as deeds, but it is also heavily biased in favour of the civil law notarial system. The Committee is due to vote on the draft report on 4 November.
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http://pr.euractiv.com/?q=system/files/CP-Conférence-Acte-authentique-06-10-08-en.pdf
Mrs Dati: The Movement of Authentic Acts is “What Still Has to be Integrated in Europe”
Press Release
Conseil des Notariats de l’Union Européenne
Council of the Notariats of the European Union
06 October 2008
The French Presidency of the Council of the European Union organised on Monday, 6 October, a colloquium on “the movement of authentic acts within the European judicial area”. The Council of the Notariats of the European Union (CNUE) welcomes the opportunity given to European institutions to launch a joint reflection and discussion with a view to enabling each citizen to enforce in another European Union State, without any additional procedure, the provisions set out in an authentic act executed by a civil law notary in one of the Member States.
The European civil law notaries who participated actively in the day’s work share with Mrs Rachida Dati , the French Minister of Justice, the idea that this “reflection on the movement of authentic acts will help to advance the freedom to come and go within the European Union”. Moreover, they did not fail to note that, according to her, “evoking authentic acts means talking about everyone’s everyday life, it means taking stock of what remains to be integrated in Europe”.
Europe’s civil law notaries, as stakeholders in the construction of judicial Europe, wish to underscore that while physical frontiers have come down, far too often judicial frontiers still continue to exist, requiring complex and long procedures which vary from one Member State to another for the enforcement of agreements executed by civil law notaries as law officials.
Thus, in the framework of the debates during this colloquium, Mr Juan Bolás Alfonso, President of the CNUE, presented an update on the work carried out by Europe’s civil law notaries on this subject and put forward his proposals for a proposed European authentic act. To date, a sectoral approach has been favoured, involving different instruments and types of procedures. However, the absence of harmonisation may be prejudicial for European citizens and economic actors, for whom improving the movement of authentic acts would assure the increased certainty of transactions. That is why, for the sake of simplicity and efficiency, the CNUE is in favour of a more horizontal approach, leading to the mutual recognition of authentic acts in Europe. The expected benefits of a Community initiative along these lines would be threefold for citizens and businesses: such a system would save time, cut costs and simplify procedures.
The CNUE welcomes the fact that the exchanges during this colloquium enabled representatives of the European Parliament and the European Commission, including among others Mr Giuseppe Gargani, Chairman of the European Parliament’s Committee on Legal Affairs, Mr Manuel Medina Ortega, a Spanish MEP and rapporteur on this subject to the Parliament and Mr Francisco Fonseca Morillo, Director of the Commission’s DG JFS, to debate the basis on which such a system of mutual recognition could be implemented.
Finally, the CNUE notes with satisfaction that in closing the day’s work, Mr Jacques Barrot, European Commissioner with responsibility for Justice, Freedom and Security, once again declared his support for integrating such a provision in the Community’s body of legislation, as he had done in Warsaw, at the Congress of European Union Civil Law Notaries when he had announced on 11 September last that a “Green Paper” on this subject would be launched shortly.
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http://blog.doingbusiness.org/2008/02/eu-executive-re.html
Professional Law Report
Confédération Fiscale Européenne (CFE)
5 November - 2008 / Edition 4
…EUROPEAN COMMISSION
Commission calls on notaries to work towards building “European legal area”
On 11 September, in Warsaw, at the opening of the 2nd Congress of EU Civil Law Notaries (CNUE), the European Commission invited all those in the law sector to play an active part in creating a true European area of justice. “We need the practitioners that you are and the great European judicial tradition” to establish a European area of legal certainty, said European Justice Commissioner Jacques Barrot during the opening session. Nearly 800 legal representatives from 21 EU Member States and partner countries attended the Congress organised by the Conference of Notaries of the European Union (CNUE). All those taking part (politicians, professionals in the field and researchers) have been called upon to discuss the theme: “A European area of legal certainty: a value for citizens and families, an by the Conference of Notaries of the European Union (CNUE). All those taking part (politicians, professionals in the field and researchers) have been called upon to discuss the theme: “A European area of legal certainty: a value for citizens and families, an opportunity for businesses”.
Although 8 million citizens reside in a Member State other than their own, “law does not move with those people”, Mr Barrot commented, leading in to his speech. “The legal obstacles to citizens’ mobility must be removed”, he said, placing emphasis on the principle of mutual recognition of decisions and legal acts, which in his view are the “cornerstone” for developing the European area of justice. The Commissioner spoke of three workshops underway, which go to illustrate the construction of the European legal area and for which the European notary sector must make its contribution: inheritance, authentic acts and matrimonial regimes.
On the subject of inheritance, Mr Barrot announced his intention to present a legislative proposal during the first half of 2009 for finding solutions on applicable legislation and providing for the recognition of jurisdictional decisions. This should facilitate the 50-100 thousand transnational legacies each year within the EU. The proposal will also include the establishment of a European certificate of inheritance to facilitate proof of the identity of heirs to a legacy. Mr Barrot also stressed the role played by the European Network of Registers of Wills (ENRW), an initiative of the European notaries, which should lead to the interconnection of registers of wills from all Member States. Other work in progress is on authentic acts. According to Mr Barrot, this is “essential to give citizens greater legal security”. He went on to add that “the authenticity of an act established by a public authority may be a very strong base for the European legal order”. The Commissioner has announced his intention to launch a Green Paper in 2009. “‘The aim is to generalise and to promote the recognition of authentic acts”, he explained. “Hitherto, recognition has been done in a pragmatic way. What we now need is more horizontal reflection”, the Commissioner said. The last work that the Commission intends to tackle is that on matrimonial regimes. Some 2,5 million properties located in the EU are owned byspouses in Member States other than the Member States of which they are nationals. In this context, “division is a problem” when couples break up, Mr Barrot said, specifying that he will put forward a proposal during 2009. Once again, he pointed out that it was not a matter of harmonising material law but rather of harmonising the rules of a conflict in law proposal during 2009. In addition to these legislative proposals, the vice-president of the Commission spoke of other ways to increase confidence between professionals in the justice sector, in particular the European Judicial Network (EJN, see below) and e-Justice.
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http://www.ecla.org/documents/Brussels%20Agenda%20-%20November%202008.pdf
The Law Societies – Brussels Agenda Newsletter
Nov. 1, 2008
…RECOGNITION AND ENFORCEMENT
European Parliament proposes a European Authentic Act
The Legal Affairs Committee of the European Parliament has taken the initiative to propose a common system for the mutual recognition and enforcement of authentic acts around the EU. Whilst not a formal legislative proposal, it is presented as a recommendation to the European Commission. The rapporteur, Manuel Medina Ortega MEP, outlines that such a system would make life easier for citizens and businesses, mainly through dispensing with the formalities on legalisation and apostilles and simplifying registration procedures. From the UK perspective however, this initiative throws up a number of problems. Not only does it fail to take into account analogous legal documents, such as deeds, but it is also heavily biased in favour of the civil law notarial system. The Committee is due to vote on the draft report on 4 November.
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http://pr.euractiv.com/?q=system/files/CP-Conférence-Acte-authentique-06-10-08-en.pdf
Mrs Dati: The Movement of Authentic Acts is “What Still Has to be Integrated in Europe”
Press Release
Conseil des Notariats de l’Union Européenne
Council of the Notariats of the European Union
06 October 2008
The French Presidency of the Council of the European Union organised on Monday, 6 October, a colloquium on “the movement of authentic acts within the European judicial area”. The Council of the Notariats of the European Union (CNUE) welcomes the opportunity given to European institutions to launch a joint reflection and discussion with a view to enabling each citizen to enforce in another European Union State, without any additional procedure, the provisions set out in an authentic act executed by a civil law notary in one of the Member States.
The European civil law notaries who participated actively in the day’s work share with Mrs Rachida Dati , the French Minister of Justice, the idea that this “reflection on the movement of authentic acts will help to advance the freedom to come and go within the European Union”. Moreover, they did not fail to note that, according to her, “evoking authentic acts means talking about everyone’s everyday life, it means taking stock of what remains to be integrated in Europe”.
Europe’s civil law notaries, as stakeholders in the construction of judicial Europe, wish to underscore that while physical frontiers have come down, far too often judicial frontiers still continue to exist, requiring complex and long procedures which vary from one Member State to another for the enforcement of agreements executed by civil law notaries as law officials.
Thus, in the framework of the debates during this colloquium, Mr Juan Bolás Alfonso, President of the CNUE, presented an update on the work carried out by Europe’s civil law notaries on this subject and put forward his proposals for a proposed European authentic act. To date, a sectoral approach has been favoured, involving different instruments and types of procedures. However, the absence of harmonisation may be prejudicial for European citizens and economic actors, for whom improving the movement of authentic acts would assure the increased certainty of transactions. That is why, for the sake of simplicity and efficiency, the CNUE is in favour of a more horizontal approach, leading to the mutual recognition of authentic acts in Europe. The expected benefits of a Community initiative along these lines would be threefold for citizens and businesses: such a system would save time, cut costs and simplify procedures.
The CNUE welcomes the fact that the exchanges during this colloquium enabled representatives of the European Parliament and the European Commission, including among others Mr Giuseppe Gargani, Chairman of the European Parliament’s Committee on Legal Affairs, Mr Manuel Medina Ortega, a Spanish MEP and rapporteur on this subject to the Parliament and Mr Francisco Fonseca Morillo, Director of the Commission’s DG JFS, to debate the basis on which such a system of mutual recognition could be implemented.
Finally, the CNUE notes with satisfaction that in closing the day’s work, Mr Jacques Barrot, European Commissioner with responsibility for Justice, Freedom and Security, once again declared his support for integrating such a provision in the Community’s body of legislation, as he had done in Warsaw, at the Congress of European Union Civil Law Notaries when he had announced on 11 September last that a “Green Paper” on this subject would be launched shortly.
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http://blog.doingbusiness.org/2008/02/eu-executive-re.html
EU Executive to Shake up Notaries Services
Doing Business
Feb. 19, 2008
Last week, the European Commission (EC) published a landmark study by the Centre of European Law and Politics at Bremen University. Legal fees are a small fraction – between 0.34% and 2.94%- of an average real estate transaction, but vary widely across EU member states.
[See: Christoph U. Schmid, Steffen Sebastian, Gabriel S. Lee, Marcel Fink, and Iain Paterson, Study COMP/2006/D3/003 Conveyancing Services Market (Dec. 2007) at: http://ec.europa.eu/competition/sectors/professional_services/studies/csm_study_complete.pdf (“in August 2006 DG Competition commissioned the present comparative study, integrating a legal and an economic perspective, on professional and related regulation and its impact on the efficiency and performance of the conveyancing services market. 21 countries are surveyed in the study: Austria, Belgium, the Czech Republic, Denmark, England and Wales, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Poland, Portugal, Scotland, Slovakia, Slovenia, Spain and Sweden. In order to compare and evaluate the different regulatory systems under which legal conveyancing services are provided in the 21 EU countries examined, we categorized the systems into four distinct regulatory models for the purposes of this study: The traditional, highly regulated Latin notary system, which reflects the public office characterisation of notarial activities; The deregulated Dutch notary system, which reflects a more modern vision of the notary as a private entrepreneur fulfilling public tasks; The lawyer system existing in the UK and Ireland, the Czech Republic and Slovakia and – to a lesser extent – also in Austria (where both notaries and lawyers have a high presence on the market); and The Scandinavian licensed real estate agent system under which real estate agents provide legal services, too.)].
Among other interesting results, this study shows that I would be paying three times more in legal fees in France than in the Netherlands for the same €250,000 house. Why would my French friends be willing to pay more for the same service?
The European Commission is not opposed to all regulation of professional services if there are legitimate arguments for it, e.g. consumer protection. But it requires a strict proportionality test to justify a more restrictive regulation. Not meeting this test could jeopardize the basics of the European single market.
The European Commission has adopted a step-by-step approach to find an appropriate and viable solution. It has identified the conveyancing services--services associated with buying and selling land and buildings--as a priority sector for reform because of its potential economic impact. The EU Real Estate Market is big. Its turnover is around €1,800 billion (2005), or 16% of EU27 GDP, and the corresponding turnover in legal services is around €16.7 billion (2005).
The study compares and evaluates the regulatory systems of conveyancing services for 21 countries from a juridical and economic perspective. They are divided into four categories: (a) the Latin notary system, the traditional highly regulated system in place in most of the EU countries such as Spain, Portugal, France, Italy, Belgium, Germany and Austria; (b) the Dutch notary system, the deregulated version of the previous model which reflects a “more modern vision of the notary”; (c) the Lawyer system, existing in the UK, Ireland, Czech Republic and Slovakia; (d) the Scandinavian licensed real estate agent system, under which real estate agents also provide legal services.
The economic part of the study shows that the highly regulated Latin notary system results in higher fees. There is nothing new in this first conclusion. Experts justify the monopoly that notaries enjoy to authenticate legal transactions and fixed fees on grounds of quality of service and legal certainty of the transaction.
However, the European Commission study finds that these arguments cannot be supported empirically. On the contrary, it points out that less regulated countries seem to perform better in terms of quality and legal certainty, with Germany being the exception. This second conclusion is striking. The methodology of this study will probably be contested, but the EU executive provides evidence to back its pro-reform arguments.
The EC study puts forward an overhaul of the Latin notary system because current regulation, especially the use of fixed fee scales and absolute restrictions on entry, e.g. numerous clauses, are having an overall negative effect on consumer welfare. The study also raises the question on whether the conveyancing market should be opened up to lawyers and other licensed professionals, including real estate agents.
These suggested reforms might have a positive impact on the Doing Business ranking of the countries that implement them by easing the process of registering property. The Doing Business Property team will be monitoring any initiative stemming from this study and invites everyone to send us related information.
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http://www.notaries.org.uk/articles/articles/notaires_in_france.html
NOTAIRES IN FRANCE: An Unassailable Profession. Or are They?
By PROF. GISELA SHAW
Notary Talk of England and Wales
Author's Version (Taylor & Francis, 2007)
Definitive Version – (International Journal of the Legal Profession, Volume 13 Issue 3, November 2006)
The Challenge
Doing Business
Feb. 19, 2008
Last week, the European Commission (EC) published a landmark study by the Centre of European Law and Politics at Bremen University. Legal fees are a small fraction – between 0.34% and 2.94%- of an average real estate transaction, but vary widely across EU member states.
[See: Christoph U. Schmid, Steffen Sebastian, Gabriel S. Lee, Marcel Fink, and Iain Paterson, Study COMP/2006/D3/003 Conveyancing Services Market (Dec. 2007) at: http://ec.europa.eu/competition/sectors/professional_services/studies/csm_study_complete.pdf (“in August 2006 DG Competition commissioned the present comparative study, integrating a legal and an economic perspective, on professional and related regulation and its impact on the efficiency and performance of the conveyancing services market. 21 countries are surveyed in the study: Austria, Belgium, the Czech Republic, Denmark, England and Wales, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Poland, Portugal, Scotland, Slovakia, Slovenia, Spain and Sweden. In order to compare and evaluate the different regulatory systems under which legal conveyancing services are provided in the 21 EU countries examined, we categorized the systems into four distinct regulatory models for the purposes of this study: The traditional, highly regulated Latin notary system, which reflects the public office characterisation of notarial activities; The deregulated Dutch notary system, which reflects a more modern vision of the notary as a private entrepreneur fulfilling public tasks; The lawyer system existing in the UK and Ireland, the Czech Republic and Slovakia and – to a lesser extent – also in Austria (where both notaries and lawyers have a high presence on the market); and The Scandinavian licensed real estate agent system under which real estate agents provide legal services, too.)].
Among other interesting results, this study shows that I would be paying three times more in legal fees in France than in the Netherlands for the same €250,000 house. Why would my French friends be willing to pay more for the same service?
The European Commission is not opposed to all regulation of professional services if there are legitimate arguments for it, e.g. consumer protection. But it requires a strict proportionality test to justify a more restrictive regulation. Not meeting this test could jeopardize the basics of the European single market.
The European Commission has adopted a step-by-step approach to find an appropriate and viable solution. It has identified the conveyancing services--services associated with buying and selling land and buildings--as a priority sector for reform because of its potential economic impact. The EU Real Estate Market is big. Its turnover is around €1,800 billion (2005), or 16% of EU27 GDP, and the corresponding turnover in legal services is around €16.7 billion (2005).
The study compares and evaluates the regulatory systems of conveyancing services for 21 countries from a juridical and economic perspective. They are divided into four categories: (a) the Latin notary system, the traditional highly regulated system in place in most of the EU countries such as Spain, Portugal, France, Italy, Belgium, Germany and Austria; (b) the Dutch notary system, the deregulated version of the previous model which reflects a “more modern vision of the notary”; (c) the Lawyer system, existing in the UK, Ireland, Czech Republic and Slovakia; (d) the Scandinavian licensed real estate agent system, under which real estate agents also provide legal services.
The economic part of the study shows that the highly regulated Latin notary system results in higher fees. There is nothing new in this first conclusion. Experts justify the monopoly that notaries enjoy to authenticate legal transactions and fixed fees on grounds of quality of service and legal certainty of the transaction.
However, the European Commission study finds that these arguments cannot be supported empirically. On the contrary, it points out that less regulated countries seem to perform better in terms of quality and legal certainty, with Germany being the exception. This second conclusion is striking. The methodology of this study will probably be contested, but the EU executive provides evidence to back its pro-reform arguments.
The EC study puts forward an overhaul of the Latin notary system because current regulation, especially the use of fixed fee scales and absolute restrictions on entry, e.g. numerous clauses, are having an overall negative effect on consumer welfare. The study also raises the question on whether the conveyancing market should be opened up to lawyers and other licensed professionals, including real estate agents.
These suggested reforms might have a positive impact on the Doing Business ranking of the countries that implement them by easing the process of registering property. The Doing Business Property team will be monitoring any initiative stemming from this study and invites everyone to send us related information.
-------------------------------------------------------------------------------------------------
http://www.notaries.org.uk/articles/articles/notaires_in_france.html
NOTAIRES IN FRANCE: An Unassailable Profession. Or are They?By PROF. GISELA SHAW
Notary Talk of England and Wales
Author's Version (Taylor & Francis, 2007)
Definitive Version – (International Journal of the Legal Profession, Volume 13 Issue 3, November 2006)
The Challenge
Professions in the Western World generally have traditionally thrived on the privilege of some degree of freedom from competition and regulatory autonomy within certain defined parts of the professional services market, having persuaded their government that reserved areas of activity and professional independence are essential to a well-functioning society. Sociologists of the professions have offered varying explanations of professions’ origin, role, impact, and future. Following early emphasis by scholars on the civilising effect of professions’ high ethical standards of self-regulation (Durkheim, 1992; Parsons, 1954), the notion of market domination based on exclusionary strategies vis-à-vis other professional groups became a prime focus of sociologists’ attention from the 1960s (Larson, 1977; Abel and Lewis, 1988). From the 1970s, a number of American and British sociologists, the main interlocutors in the debate, became aware of their Anglo-American bias. A new and more sophisticated approach emerged which took account of the role of history in the evolution and nature of professions, of their relations with their respective states, as well as of issues of social and political status and power. This for the first time opened up perspectives that could fruitfully be applied to professions in continental Europe. (Johnson, 1972; Rueschemeyer, 1973; Geison, 1984; Halliday, 1987; Siegrist, 1988; Abel, 1989; Torstendahl & Burrage, 1990; Burrage & Torstendahl, 1990; McClelland, 1991; Jarausch, 1990; Burrage, 1996; Karpik, 1995; Malatesta, 1995; Halliday & Karpik, 1997).
The profession of notary, although the oldest and arguably most venerable of the legal professions in Europe as well as of continuing importance within Continental European civil law systems, has featured only marginally, if at all, in any of these debates. Exceptions are Ezra Suleiman’s remarkable book on notaires in France (1987), as well as a few shorter studies of the profession in Germany (Shaw, 1997; 2003a; 2003b; 2004; 2006) , Italy (Santoro, 1995), England and Wales (Shaw, 2000; forthc.), and Central Europe (Shaw, 2004). Suleiman focuses on the historically grown and firmly established intertwining of the profession’s corporate interests with those of the French state and of a number of French institutions. He interprets the French notariat’s resilience and ability to survive and even thrive on serious crises as a result of notaires’ fundamentally ambiguous status as providers of both public and private legal services: as public servants, they enjoy government protection and a statutory monopoly; as members of a liberal profession they are free, in fact encouraged by their government, to engage in profit-making activities in the open market. This dual position, Suleiman argues, provides them with wide scope for political negotiation and the option to play either card as the need arises.
Although most notariats in civil law countries to some degree share this dual nature, the tension between the profession’s two functions and its effect on its socio-political and economic standing are far more pronounced in France than elsewhere. Notaries in France enjoy a uniquely close relationship with the state (represented by the Ministry of Justice), an exceptionally high degree of professional autonomy, an uncommonly wide range of privileges, and the built-in potential for enviable levels of prosperity. (For details see Moreau, 1989; Moreau, 1999) Social and political status and the striving for self-regulation have been a major factor in determining the notariat’s political strategies. Economic prosperity, on the other hand, has merely been a highly welcome by-product, not the result of a corporate strategy to expand the profession’s share of the legal services market.
On the contrary, the last fifty years have seen a process of contraction and concentration on reserved activities, particularly on the property market, leaving areas of activity in the open market into which they might have expanded to their competitors without a struggle. This approach is not dissimilar to that of solicitors in England prior to the abolition of their conveyancing monopoly. It was only the impact of deregulation under Margaret Thatcher’s government which forced them to abandon their preoccupation with status and honour and operate in the open market under a strengthened state and market control (Burrage, 1996), a process which is now being rounded off in the wake of the Clementi report of 2002. At the time Richard Abel (1989), from a background of close familiarity with developments in the American legal services market, accurately projected as likely next steps: increasing concentration and mergers, elimination of smaller units, loss of traditional markets, greater reliance on and competition for qualified staff, multidisciplinary partnerships, specialisation, efforts to stimulate demand, shift towards direct employment, loss of professional unity and autonomy and, at worst, loss of identity. Abel also sounded a note of caution regarding the risks involved in giving market forces free reign and losing sight of the fundamentally normative quality of legal work.
Almost a decade later, Michael Burrage (1996) broadly welcomed these developments as the transformation of a ‘gentlemen’s profession’ into a ‘public profession’, a move towards greater market-orientation and competitiveness, more openness and accountability to the public, and freedom to adopt a more independent and even adversarial posture vis-à-vis the state. The fate of solicitors following the loss of their conveyancing monopoly may seem worlds away from the situation of notaires in France, where no government has seriously considered removing the barriers shielding them from competition by other domestic professions, and where enlightened self-interest on both sides continues to provide a powerful incentive to reach mutually acceptable solutions to any problems arising, making the position of French notaires appear almost unassailable.
However, in recent years one essential premise has changed: the fate of the notarial profession has ceased to be determined purely within a national framework. Economic globalisation and the liberalising initiatives of the European Commission have introduced a new factor into the equation, moving the problem, or at least a crucial aspect of it, to a higher and previously unknown level.
Two major directives, the Directive on the Recognition of Professional Qualifications (Directive 2005/36/EC adopted 7 September 2005) and the Directive on Services in the Internal Market (expected to come into effect by the end of 2006), both aiming to open the services market in Europe, have been looming over the profession, threatening to wipe out any protection from competition. By a hair’s breadth notaries, as opposed to other lawyers, ultimately escaped application of the Professional Qualifications Directive, as, after protracted tough negotiations, professions connected, even occasionally, with the exercise of official authority, were excluded from its scope. As for the Services Directive, it now looks as if, once again notaries may be able to breathe a sigh of relief as specific activities undertaken by them on behalf of national governments are likely to be excluded.
However, even if French notaires are not directly affected by these reforms in their core work, the impact on any of their operations in the open market is likely to be considerable, as the world around this tiny profession is swiftly moving into a new era of intensified competition at all levels. In addition, should the housing market take a downturn or should the French government ever decide to restructure or, indeed, abolish the notarial monopoly in this area, the profession of notary would be at serious risk of suffering the fate of other small groups of lawyers in the past who were easily absorbed by either advocate or accountant firms.
For the first time in the profession’s history, therefore, old corporatist ties and intertwinings of interests of administration, government, banks and profession can no longer guarantee its continued survival and prosperity. Competitors at home and abroad are getting ready to pounce, and fractures within the profession itself are beginning to appear, with some groups (still a minority) embracing with enthusiasm the prospect of a freer market and calling for a more pragmatic approach, while others (still the majority) are unwilling or unable or both to consider the possibility of radical change and insisting on the immutability of the status quo. Any assessment of the profession’s actual and possible responses to this novel challenge requires insight into its current situation and workings. This is what this paper attempts to provide. It does so by focusing on selected key features of the profession today, and analysing them in the light of concepts from the sociology of the professions sketched out above, most particularly the role of history, the relationship between profession and state, and the tension between professional aspirations for socio-political status and the need to face up to competition in the open market.
As up-to-date facts and figures on notaires are not easily found and sociological analyses of the French notariat do not exist (apart from Suleiman’s very specifically focused study of 1987), the factual base of my argument relies mainly on information available from the profession’s journals and websites, as well as a number of personal semi-structured and informal interviews with professional leaders conducted since autumn 2004. The journals in question are: Conseil supérieur du Notariat, Notaires. Vie professionnelle; Assemblée de Liaison des notaires de France, LejournAL (prior to 2004: Liaison); Mouvement Jeune notariat, Mouvement Jeune notariat; also associated with Mouvement Jeune notariat: Revue Pompadour Notariat 2000. Revue indépendante d’informations et d’opinions.
The reports of the annual conferences of the Assemblée de Liaison des notaires de France provide a great deal of carefully researched information on specific topics. The same is true of the reports of the annual conferences of the Mouvement Jeune notariat, which are available on the internet (http://www.mjn.fr/). Specific references will only be referred to in exceptional cases to avoid an overload of notes. I am grateful to those who have been willing to give up their time for interviews: three members of the executive of the Conseil supérieur du Notariat, among them a recent President who had also recently been President of the European Union of Notariats (CNUE); the President of the Mouvement Jeune notariat as well as a number of the group’s most active members, including notaires assistants and notaires stagiaires; the Director General of the CRIDON de Paris; key representatives of the DG Competition and DG Internal Market of the European Commission in Brussels; the Head of the CNUE and one of her colleagues in Brussels. I also want to express my appreciation to the Head of the Documentation and Archival services at the Conseil supérieur who has greatly assisted my search for information.
Profession and state
Having been abolished in 1791 as an institution of the hated ancien régime, the French notariat was revived in 1803 in a new guise by Napoleon, as part of his ambition to ensure political and economic stability. Anciens notaires were replaced by notaires publics - the model for (and often envy of) civil law notaries in the rest of continental Europe. A major political victory was won by the French profession when in 1816 their former status as officiers ministériels and the accompanying droit de présentation (essentially the right to choose their own successor and to treat their office as part of their personal assets) was reintroduced by the backdoor, a restaurational measure that sits uncomfortably with the otherwise modernised professional profile and has remained a bone of contention ever since.
Notaries are defined as public officers called upon to receive all acts and contracts to which parties have to or wish to give the character of authenticity. Their function is that of impartial arbiter, counsellor of individuals, businesses and collectives, and guarantor of the morality and legal security of contractual relationships - a corner-stone of any civil law system. As members of a liberal profession they are in control of their own finances, practice and staff, as well as engaging in activities in the open market. As Suleiman’s masterful study shows, the relationship between the notarial corporation and the French state has been a close, but multifaceted one, a mixture of hostility and complicity.
Generally speaking, the Ministry of Justice which legally exercises tutelle over the profession has allowed its relationship with the profession to acquire a symbiotic character and to act in a generally protective role, as its actual control over the profession is limited to confirming notaires to the office they have purchased. No annual meeting of the profession passes without the Minister of Justice and Keeper of the Seals being reminded by professional leaders of his duty to promote the profession’s well-being, and the Minister reassuring them of his faith in their important contribution to society and his unwavering continued support. Regular meetings in the Ministry are set up by the leadership, often with the aim of suggesting and preparing the ground for new legislation they would like to be brought in. The Ministry of Justice’s support is needed particularly vis-à-vis the Ministry of Finance that keeps a close eye on and has to approve any changes in the notarial fees system, the tarif.
The state benefits in a number of very tangible ways from the activity of notaires.
Firstly, notaires calculate and collect state taxes and legal charges (now also including VAT) for each and every transaction performed. The profession views this arrangement with mixed feelings: on the one hand, it represents an unpaid additional responsibility and, more importantly in today’s climate, a source of suspicion on the part of the public at large which tends to assume that the sums collected by the notaires all flow into their own pockets (in fact, only around 20 per cent do); on the other hand, it can and has come in extremely handy as an invaluable bargaining chip in negotiations with the government on other issues.
Secondly, the state also benefits from the institution of the Caisse des Dépôts et Consignations, a public institution created at the initiative of a member of the profession, Duclos Dufresnoy, through which every notarial office’s income and expenditure has to be channelled, with the exception of rural areas where the Caisse de Crédit Agricole may also be used. Capital accumulated by the former is used for state-directed projects of public interest, while capital flowing into the latter serves to support agriculture.
Professional organisation
Representing the French notariat’s interests vis-à-vis the government, the public, and, increasingly, the international community is the task of its national organisation, the Conseil supérieur national du Notariat (CSN), established by statute in 1945 - suprisingly late, given the country’s otherwise essentially centralised structure, but still relatively early in the light of the fact that French avocats remained without a national body to represent the totality of the profession’s membership until appropriate legislation was passed in 1990. Funded entirely by the profession itself, the large and bureaucratic National Council enjoys remarkable economic and political clout, appropriately reflected in its recent move from modest rented premises in the 8th arrondissement to its own large purpose-built edifice in the 7th arrondissement, covering 6000 square metres and presented to the profession as a long-overdue symbol of its national standing, as well as a prudent collective investment in its future, in spite of occasional grumbles from the grass-roots. Considerable efforts have gone into strengthening the CSN’s position, a strategy much helped by the membership’s awareness of real threats to the profession both from within and from without, and an acceptance of the need to improve their services to society and strengthen the profession’s solidarity. 33 regional councils have, since 1945, been charged with functions relating to representation, training and communication, a brief to which have recently been added disciplinary powers, which has deprived the 92 departmental (or, in some instances, interdepartmental) chambers of what has traditionally been their core function. Both of these institutional layers have old historical roots.
This is particularly true of the exclusive and powerful Chambre des Notaires de Paris which combines interdepartmental and regional responsibilities. Its Parisian headquarters’ façade proudly proclaims a thousand-year history and long-standing closeness to government and courts - closeness, that is, in all senses, including geography. In this venerable and proud institution, concern with social status and political power is tangibly in evidence, as is its claim to be the (historically legitimated) representative of the profession at large. Along with status has come economic strength. In 2005, the Chamber’s membership of 500 (5.9% of the country’s total) had 220 offices (7.6% of the total), employed 5000 staff (10% of the total) and had an annual turnover of 600 mill. euro (10.3% of the country’s total). Compared to their rivals, the avocats, almost 40% of whom (2002: 15,541 of a total of 39,454) are concentrated in Paris, the notarial group in Paris looks modest enough, but this is due to the formula by which the Ministry of Justice creates new offices and does not adequately reflect the economic and political clout of Parisian notaires. Although the Chambre des Notaires de Paris initially found it difficult to accept the creation of a national body, the two organisations have since succeeded in gradually settling into a mutually beneficial relationship, with the Paris notaries being granted special privileges and considerable say in national decision-making, and the National Council benefiting from the Parisians’ centuries-old experience and political influence. A highly original professional organisation, the Assemblée de Liaison des notaires de France, provides a direct channel of both ascending and descending communication, a bridge, between the national body and the general membership. A voluntary body without statutory base, it was initiated in 1950 by the 49th annual congress of French notaries in La Baule as the profession’s ‘parliament’, a forum for elected grass-roots representatives to debate and formulate proposals to be submitted to the National Council, as well as a platform for direct communication between the council and grass-roots members. All key figures of the notarial establishment are invited to the annual two-and-a-half day themed conference in early December at the Palais des Congrès in Paris: members of the CSN, presidents of departmental chambers and regional councils, and delegates of notarial trade unions and professional associations. One session is specially set aside for the CSN’s executive committee to respond to questions put to them from the floor (admittedly, some of these having been subjected to prior screening). On the last day, a series of proposals are voted upon and, once passed, transmitted to the CSN for discussion and decision by one of its standing committees, half of whose membership are, in fact, elected representatives of the Assemblée de Liaison. A conference report is published every year, complementing the Assemblée’s monthly journal Le journAL.
The other voluntary organisation of note is the Mouvement Jeune notariat (MJN), a loosely organised group founded in 1960 by Louis Reillier (1913-99), an avant-garde and idealistic notaire in Pompadour, Corrèze, who was determined to modernise and reinvigorate the profession both economically and socially. This group, which still adheres to its self-defined brief to be inclusive, open and future-orientated (un notariat sans frontières), has maintained a refreshingly critical stance and provided a fertile breeding ground for novel ideas, many of which have been skilfully adopted by the CSN once they had proved successful. The same is true of the deliberately unconventional and occasionally mildly provocative journal entitled Notariat2000. Revue indépendante d’informations et d’opinions, also founded by Louis Reillier. The group has a publicly accessible website, and organises annual themed congresses which are increasingly held abroad (including China in 2005). (see www.mjn.fr) Comprehensive published reports consist of carefully orchestrated contributions intended to stimulate debate and move the profession forward. A deliberately provocative step which raised a lot of hackles with the National Council has been the election in 2004 of a President from a country other than France, the Belgian notary Olivier Jamar. A prime example of a successful MJN initiative has been the annual day at the Palais des Congrès at the Porte Maillot in Paris, where notaires gather from all over the country to offer free advice to anyone who wishes to come along - a project the CSN initially refused to be associated with, let alone support, and which has now become one of its major marketing tools. Similarly, the MJN provided the ideas for the so-called Université du Notariat, an annual week of lectures, seminars and discussions organised near Paris - now a highlight in the professional calendar of events. Finally, an annual cycling tournament of notaries projects the image of a profession that is young, energetic and forward-looking. This group and its publications represent a kind of barometer of the progressive and liberal forces within the profession.Image issues
Concern with the profession’s traditional public image - somewhat dusty and archaic, patriarchal, elderly, focused on self-enrichment (and, which goes without saying, white) - is a relatively recent but now increasingly pressing item on the National Council’s agenda, as consumers’ views are recognised as an important factor in the profession’s justification of its role in society. Considerable efforts have been made by the CSN to project a more positive image of a profession keen to meet the needs of individuals, families and companies, and uniquely placed to do so on account of a long established basis of trust and the legal security provided by its authentic acts. Occasional highly critical media reports including allegations of greed and financial irregularities have made it hard to get their message across.
Purely statistically, the average age of French notaries (49 in 2005), although gradually going down, is relatively high compared to for instance that of their main competitors, the avocats (44.6 (men)/ 38.9 (women) in 2002). In time, this problem will be diffused, as by 2014, 35 per cent of those practising today (members of the post-war baby boom generation) will have retired - a unique opportunity for rejuvenation from the reservoir of some 4,000 notaires assistants waiting for appointments. Three major obstacles stand in the way of a smooth hand-over to a younger generation: firstly, the rampant inflation in the price of offices demanded by retiring members; secondly, the reluctance of existing notarial firms to appoint additional partners - an option open to French notarial firms (as opposed to their colleagues in other countries), as the numerus clausus applies only to offices, not to the notaries working within them; and thirdly, the profession leadership’s reluctance to push for the creation of additional offices. The national body has adopted various strategies in order to ease the situation. It is running a campaign to remind retiring notaires that the notarial office is not primarily a commercial enterprise and that prices demanded for their offices should be kept at more modest levels - an undertaking which is unlikely to bear much fruit. The CSN is also considering forcing notarial firms to take on additional notaires associés if their annual income or number of acts exceed a certain maximum, but how precisely this can be done has yet to be revealed. The need to accelerate the process of appointing notaires has been formally acknowledged by the Ministry of Justice and the CSN, and will be acted upon by a reduction of the waiting period from currently 3 months to 5 weeks. And, finally, an undertaking has been given that the overall number of offices is to be steadily increased by about 2000 over the next 10 years to reach a total of 10,000.
The profession’s predominantly male profile represents another potential image problem. Women were only legally admitted to the notariat in 1948. Early female pioneers were mostly widows and daughters of notaries killed in the war, and for quite some time the number of women in the profession remained extremely modest. (1968: 36; 1973: 73; 1980: 130; 1999: 1000 (=13.46% of total)) In Paris, the first two female notaires were appointed in 1977. Tangible change set in from the 1980s, with larger numbers entering the profession and the first women being appointed to higher office. Yet, even today over three quarters of French notaires are men, with women making up 21%. Ironically, by West European standards generally, even 21% represents something of an achievement, as there are national notariats that do not even reach a female participation rate of 10 per cent Looked at more closely, though, the figure disguises a somewhat less favourable picture, as only 16% of independent notaries are women, while their share among employed notaries (notaires salariés) is 55%. Given that over half of today’s trainees are female and the percentage of women is significantly higher among younger notaries than among those over fifty, a certain degree of ‘trickling-up’ can be expected. But there is also evidence that the move to becoming an independent office-holder represents a hurdle of sufficient dimensions to deter many a female trainee from aspiring to this goal. Intriguingly, neither this fact nor the persisting gender-based inequalities of pay - female notaires salariés in Paris may take home up to 25% less than their male counterparts - appears to raise many eyebrows within the notarial establishment. On the contrary, the contrast with the strongly feminised bar (2002: 44.8%) was put forward in conversation with a representative of the CSN leadership as a plus (‘we don’t want to become like them!’). Generally, only modest concessions have been made to gender equality with the occasional appointment of a woman to the presidency of a departmental or regional chamber (the Paris Chamber elected its first female President in 2002). Since 1998, the otherwise male steering committee of the National Council has had one female member - a fact that is proudly quoted as unambiguous evidence of the profession’s commitment to the equality of women, accompanied by comments to the effect that women do not come forward as candidates as they simply lack in confidence. As for racial equality, this is a topic that has not yet been approached in any public form.
Training
Autonomy in the context of training has become central to the French notariat’s strategic planning. While traditionally anyone could step into his predecessor’s shoes without worrying much about formal qualifications, a university education became the norm from 1972 as an important part of a programme of reforms, after a thorough internal survey had provided evidence of a serious credibility crisis. The introduction of structured training offered a welcome opportunity to the national leadership to make its mark vis-à-vis more venerable regional and local organisations, while also diplomatically accommodating an impressive, and by international standards unusual range of alternatives dear to various subgroups within the profession. The bulk of those undergoing notarial training - some 500 a year - come through two routes: either the ‘professional route’ of a three-year degree in law, or the much more specialised and therefore less flexible ‘university route’ providing for a three-year notarial diploma. In both cases, a further three years of notarial theory and practice are required. But it is also possible for jurists from other fields with only one year’s notarial experience to enter the profession sideways (some 5% of applicants a year), or even for office clerks without a university degree but with significant practical specialised experience and some notarial theoretical training to rise to a post via internal promotion - traditionally a very common occurrence, now relatively rare.
Training
Autonomy in the context of training has become central to the French notariat’s strategic planning. While traditionally anyone could step into his predecessor’s shoes without worrying much about formal qualifications, a university education became the norm from 1972 as an important part of a programme of reforms, after a thorough internal survey had provided evidence of a serious credibility crisis. The introduction of structured training offered a welcome opportunity to the national leadership to make its mark vis-à-vis more venerable regional and local organisations, while also diplomatically accommodating an impressive, and by international standards unusual range of alternatives dear to various subgroups within the profession. The bulk of those undergoing notarial training - some 500 a year - come through two routes: either the ‘professional route’ of a three-year degree in law, or the much more specialised and therefore less flexible ‘university route’ providing for a three-year notarial diploma. In both cases, a further three years of notarial theory and practice are required. But it is also possible for jurists from other fields with only one year’s notarial experience to enter the profession sideways (some 5% of applicants a year), or even for office clerks without a university degree but with significant practical specialised experience and some notarial theoretical training to rise to a post via internal promotion - traditionally a very common occurrence, now relatively rare.
Finally, notaries from other countries may, in theory, be admitted after passing an aptitude test, although in practice this route is still blocked by the nationality requirement which operates for notaires in France and, indeed, in all but three European civil law countries. (Spain, Portugal and Italy gave in to pressure from the European Commission in 2002 and undertook to abolish their nationality requirement, although this undertaking has so far remained without any practical consequences.
From the 1970s, the profession’s leadership has worked hard to acquire and retain a central role in the funding, design and delivery of both initial and continuing notarial training, occasionally in competition with regions. Their collective achievements are remarkable by any standard. Continuing training - to the regret of many still not obligatory - is offered by Regional Councils as well as at five training centres set up by the National Council, each of these specialising in a major area of notarial activity [4], as well as at the so-called Université du Notariat, the annual training programme organised by the National Council in Jouy-en-Josas near Paris. A very recent indication of the significance attributed by the National Council to the control of initial notarial training as well as to the government’s disinclination to go against their striving for autonomy in this area came with the political challenge to meet the Bologna criteria for higher education. A careful balance has been struck between accommodating the government’s wishes on the one hand and ensuring the profession’s continuing authority over the process on the other. Negotiations with the Ministries of Justice and of Education have resulted in a compromise agreement: the structural framework of undergraduate diploma, master’s degree and doctorate will be introduced in return for an undertaking that the profession’s training autonomy will not be adversely affected and the diplôme supérieur du notariat will remain untouched.
Centralisation has proved out of the question in the context of the five autonomously funded and run regional centres for research, information and documentation (CRIDON) at Lyon, Paris, Lille, Bordeaux and Nantes, each of them taking great pride in their respective achievements. Created in the 1960s, they were set up to improve the quality of notarial services by providing ready access to information and advice, especially to those working in isolation in more remote parts of the country. So great has been their success that both Germany and Switzerland have used them as models for similar institutions of their own. The largest centres (Lyon and Paris) employ some 30 specialist consultants ready to answer any questions put to them by notaires in their specific regions (and only those). Cultural differences between regions were vividly described to me at the Paris CRIDON, for instance in terms of communication cultures: ‘Here in Paris everything gets written down and used and reused later: a note becomes a conference becomes a book. In Lyon and Bordeaux they talk to each other.’ As for recruitment cultures, Lyon, the oldest of the CRIDONs as well as the model for all others (established in 1962), was said to recruit lawyers with an established professional reputation ( ‘les gens installés’); in Paris consultants are hand-picked (‘The CRIDON is the Institut Pasteur.’): either young people who are given their first job and will rise to becoming university professors later, or specialist professionals head-hunted over a period of 18 to 24 months, who are experts of the ‘German’ rather than the ‘French’ kind (‘They must have answers in their heads rather than need books to find them.’); while the centre in Nantes was referred to rather unkindly as a ‘pension des Jésuits’. Calls for a co-ordination or even merger of the work of these five centres can occasionally be heard, but nobody would seriously expect more than marginal concessions in this direction.
Access
Access
The number and location of notarial offices is strictly controlled by the Minister of Justice and Keeper of the Seals, in consultation with the profession. Candidates for office are proposed by chambers and normally accepted by the Minister without queries.
[Numerus Clausus means "'closed number' in Latin. It is one of many methods used to limit the number of students who may study at a university. It can be similar to a racial quota, both in form and motivation. The numerus clausus is currently used in countries and universities where the number of applicants greatly exceeds the number of available places for students. This is the case in many countries of continental Europe." See: Numerus Clausus, Wikipedia, at: http://en.wikipedia.org/wiki/Numerus_clausus ].
The justification given for the need for a numerus clausus is that competition in an open market would detract from notaries’ commitment to public service and endanger the quality of their work.
[A RATHER LAME EXCUSE, NON?]
As a concession to transparency and fairness, a special commission, the Commission de localisation des offices des notaires (CLON), has since 1986 been in charge of monitoring and, if necessary, adjusting the number and location of offices. On average, of the 500 or so young people who qualify as notaries every year, only some 300 end up ‘taking the oath’ and being admitted, the remainder having the choice between waiting for their chance (which can take a long time), offering their services as notaire salarié, or joining the ranks of the competition (the bar) instead.
An appointment to notarial office can come about in four ways. Three of these apply to the bulk of the country, the fourth only to the regions of Alsace Lorraine where the German system was retained after the territory’s return to France in 1919. Firstly, candidates may be chosen by retiring notaires as their successors. Secondly, they may apply for a vacancy, subject themselves to a highly competitive examination, and, if successful, produce the funds to indemnify their predecessor. Thirdly, it is possible to apply for one of the (very rare) newly created offices and sit appropriate highly competitive examinations. A burning and very immediate issue amongst the profession’s membership is the current (low) ceiling placed on the number notarial offices by the Minister of Justice. This has increasingly come under fire, especially amongst the younger generation frustrated by the difficulties put in their way, but also from those who see the profession’s tiny size as a serious hazard in a growing and increasingly competitive legal services market.
While throughout the nineteenth and the first half of the twentieth centuries, the number of notaires had been regarded as too high and had been allowed consistently to decline [5], a first wave of office creations occurred in 1964 in order to accommodate 101 notaires returning from Algeria. A second wave followed ten years later when 109 offices were established in the context of the introduction of sociétés civiles professionnelles. Had all these new offices survived, they would by 2005 have accounted for 13 per cent of the total of 4503, but quite a few, especially of those created in the 1970s, did not. (Lemoine, 2000; Urvoy, 2005) Yet much more would be needed to meet applicant and market demands. Rebellious voices can be heard asking for a comprehensive overhaul of the appointment system, including offering all applicants the chance to open their own office as well as some choice of location. (Moreau, 2005) In 2005, a first step towards improving the situation and moving towards the figure of 10,000 offices originally promised was taken as government and profession agreed to set up 2000 new offices over the next ten years. Not all members are happy with this plan for fear of greater competition. But overall such fears are outbalanced by the realisation that the profession needs to increase its visibility and clout, esp. in the light of the rapid growth of the bar. The urgency of this argument is underlined by the prospect of a further strengthening of the bar by a merger with in-house company lawyers (juristes d’entreprise). This would allow the creation of a specialised business bar and move the legal professions closer to its vision of la grande profession juridique. (Boigeol & Willemez, 2005; Conseil d’État, 2001)
A unique feature of the French notariat is the fact that an appointment to notarial office requires evidence not only of subject expertise and experience but also of the candidate’s sound financial position. Permission to take out a loan is tied to evidence being provided by the applicant that enough capital is available for a substantial down payment. This goes even for those with the prospect of a newly created office, as they have to find the resources needed to compensate neighbouring offices for alleged loss of income. On the basis of a recent internet survey among aspiring notaires, it has been calculated that this down payment, representing 25% of the ultimate purchase price plus some other costs, amounts to a minimum of 126,383 euro, requiring a newly qualified notary with no personal means to save up for twenty-eight years before being able to consider running his own office. (Notariat2000, 2005)
This system starkly contrasts with the system operating in the three departments of Haut-Rhin, Bas-Rhin and La Moselle, where the German admissions system has remained in operation. Here no money changes hands and appointments are based on purely meritocratic criteria. Nor have any major financial scandals (sinistres) - the bane of the profession in the rest of France - ever come to light in these parts of the country. Yet, the adoption of a meritocratic principle has found little favour among the profession where everyone already installed would stand to lose.
A survey among some 900 notarial offices conducted early in 2005 by the journal Notariat2000 (which is associated with the Mouvement Jeune Notariat) did find considerable sympathies with a meritocratic system. But in this particular context the traditional system for existing offices was not drawn into question and opinions were only sought on the topic of newly created offices.
Not surprisingly, the institution of the droit de présentation and sale of offices has been a frequent target of attack (for a recent example from the camp of avocats see Redoutey, 2006). It is the basis for the disproportionate degree of prosperity that marks out a significant section of the French notariat, most particularly in Paris but also in other urban centres, where notarial offices have been handed down in the same family from generation to generation. Average prices quoted for 2002 were 50,000 to 700,000 euros. (Schützeberg, 2005, p. 142). So far, nothing has shifted. Why should that be so? Apart from the strength of the notarial lobby on the one hand and the lack of political will on the part of the French government on the other, there is a shatteringly simple economic reason, summed up most succinctly in a comprehensive report commissioned by the French government under de Gaulle in the late 1950s on the subject of obstacles to the country’s economic expansion. Amongst the key obstacles identified by the authors of the report were rigid professional structures and regulations, exemplified by a number of case studies, one of them on professions classified as officiers ministériels, in particular the notariat. However, the report’s recommendations on how to liberalise these professions for the benefit of the national economy prefaces the section on notaires by the following bland statement: "The Committee has not judged it possible to propose the suppression of the traditional system of the venality of offices due to the expense the state would incur in indemnities for some 6,370 notaires in metropolitan France." (Armand-Rueff, 1960, p. 43 - my transl.) To this day, in any debate about the profession’s role in society, its ambivalent dual status of public officer and member of a liberal profession (seen by its critics as having its cake and eating it), the droit de présentation has remained the main sticking point.
To quote from a book by one of the system’s more brilliant critics, at the time (1970s) the youngest judge at the court of appeal in Paris, Michel Jeol: "Is it acceptable in a republican system that one should come to a public office by purchasing it? Admittedly, the government gives its agreement and the profession its views on each occasion of transmission of office. But those checks do not ensure democratic access to the function. On the contrary, they lend themselves to discrimination when to the obstacle of money can be added exclusion on political and social, indeed also on racial and religious grounds." (Joel, 1977, p. 98) Joel’s suggested solution was a gradual phasing out of the numerus clausus by limiting office holders’ ownership to their own lifetime so as to spread the costs of compensation over time and make the process manageable. But to this day, neither this nor any other proposed strategy to remove this eyesore left over from the ancien régime has received serious consideration by the French government. Representatives of the profession itself, when questioned on the subject, tend to play down its significance, emphasising variously the difference between droit de présentation and vénalité, the fact that the final say on the choice of a notary’s successor and the price to be paid for his office rests with the Minister of Justice, and the analogy with other liberal professions (lawyers, doctors etc.) who also own and sell their offices (but, of course, do not also claim to be officers of the state). Notaries in other countries look upon this state of affairs with mixed feelings, occasionally tinged by a touch of envy, as it adds further to their difficulties in explaining convincingly to their own critics the benefits to society of the profession’s dual role as public officer and member of a liberal profession.
Income and activities
Income and activities
Having gone through economically uneven times in the 19th century, French notaries have, since World War II, developed into a truly prosperous profession, largely due to the profession’s intimate link to the property market. In 2005, their clientel numbered some 20 million (i.e. roughly one third of the country’s population), and their annual turnover was 5800 million euro. In June 2005, the periodical L’Expansion published ‘the truth about the liberal professions’, showing notaries to have the second highest average income of all liberal professions in France, well above avocats. From 2002-2003 their income level rose by 17.1% to a national average net income of 187,000 euro per notary, compared to an increase by 6.3% to a national average income of 62,605 euros for avocats for the same year. These average figures hide huge discrepancies between the highest earners in Paris and other big cities and low earners in economically deprived rural areas. However, no notaire has ever been forced into real financial hardship as the profession collectively funds its own insurance system as a safety-net for anyone getting into serious financial trouble, be it through financial mismanagement, personal misfortune, or a downturn in the respective region’s economy.
The profession’s prosperity is mainly anchored in a generous range of monopolies in the legal services market given over to them by law, most particularly in the context of property registration.
Their (quasi-)monopoly regarding access to the land register, the outcome of a reform of land registration in 1955, is the source of over half of their average annual income - enthusiastically referred to by one of their members as ‘the notarial hen of the golden eggs’ (‘la poule aux oeufs d’ore notariale’). (Bigot (2005, p. 15) Another quarter comes from activities in family law and estate management, the remainder stemming from work concerning loans and mortgages, company law work, general counselling etc. Notaires have been alerted by their leadership that, although in absolute terms their market looks healthy, it is actually shrinking in relative terms from year to year, as the legal services market overall as well as the number of providers are exploding. By their own admission, notaries collectively have become rather complacent and are making little or no effort to retain other traditional areas of activity, let alone expand into new ones.The seemingly unstoppable increase in the value of property has given them a sense of security which many regard as a high-risk approach. Admittedly, every increase in the price of housing automatically increases their income.
But even if the property market continues to expand, competitors are always looking out for a chance to get their own slice of the cake. Already the journal L’Expansion has alerted its readers to the possible savings if, in selling a house worth over 1 million euros, they involve an avocat and the courts rather than a notaire. Property agents are major opponents in property sales transactions in urban areas, as notaires have allowed their share to slip from 9% to a mere 6% in the four years since 2002. Property agents now hold 70% of this market, having consistently worked on improving their position. Not only have they made sure that their tools are the most advanced possible (specialist training, deontological code, websites, computer technology, research and working networks). They have also set up chains, often owned by banks and attracting clients through optimal efficiency.
Inheritance planning is another traditional notarial activity which is gradually slipping into a marginal position as notaires are concentrating more and more on authentication work, shunning the need for the specialist training that would be required in this ever changing and increasingly complex field, or simply finding it difficult, particularly in small firms, to release sufficient staff capacity. Although some 80% of those replying to a recent small survey stated that their office still did some inheritance planning, three quarters of these referred to giving ‘simple’ (and often unremunerated) advice rather than getting involved in complex financial matters. The latter are increasingly dealt with by banks and insurance firms equipped with the latest tools and offering teams of specialist advisers capable of providing a one-stop shop.
Finally, newly emerging areas of activity in the legal services market are mostly left without a struggle to other legal service providers, i.e. lawyers and accountants. A recent example has been the refusal to get involved with PACS (pacte civil de solidarité), the legal provision established in 1999 for two people (either of the same or of different sex) to set up a contractual partnership for life. In this case, the beneficiaries were the former conseils juridiques who then became avocats d’affaires, who had already occupied the area of commercial law spurned by notaries and who are now only too happy to take advantage of this expansion of their terrain. Another area not yet tapped is the rapidly growing field of mediation. By 2003, France had a total of 1,850 conciliators and 2,000 mediators, comprising avocats, social workers, psychologists and even medics, but notaires have so far not got seriously involved, although mediation by its very nature is acknowledged to be fully in tune with their role in the non-adversarial judiciary.
Fees
The bulk of notaries’ work is remunerated on the basis of a statutory fees scale. Fixed fees were introduced as late as 1896 to curb fraudulent behaviour on the part of notaries following a period of notorious financial scandals. This was initially done on a regional basis to take account of differences amongst regions, but met with considerable resistance from the profession. It was only in 1945, that fees scales were harmonised on a national basis, an important step in the process of professional unification. (Moreau, 1989, 99) They then became a bastion which the profession has successfully defended ever since, with full government support. The justification put forward is that ad valorem charges, that is fixed fees based on the value of a transaction irrespective of the work and complication involved, allow for a more socially just distribution of costs, as clients engaged in major transactions are effectively cross-subsidising the costs arising from transactions of minor financial value. If a client has no choice whether to see a notary or not, it is argued, notarial services must remain accessible even to the economically disadvantaged.
Fees
The bulk of notaries’ work is remunerated on the basis of a statutory fees scale. Fixed fees were introduced as late as 1896 to curb fraudulent behaviour on the part of notaries following a period of notorious financial scandals. This was initially done on a regional basis to take account of differences amongst regions, but met with considerable resistance from the profession. It was only in 1945, that fees scales were harmonised on a national basis, an important step in the process of professional unification. (Moreau, 1989, 99) They then became a bastion which the profession has successfully defended ever since, with full government support. The justification put forward is that ad valorem charges, that is fixed fees based on the value of a transaction irrespective of the work and complication involved, allow for a more socially just distribution of costs, as clients engaged in major transactions are effectively cross-subsidising the costs arising from transactions of minor financial value. If a client has no choice whether to see a notary or not, it is argued, notarial services must remain accessible even to the economically disadvantaged.
It was only in 1986 that the notariat used its acceptance of the lifting of the fees scale for commercial work not covered by their monopoly as well as the negotiability of fees in transactions of above 500,000 francs as a bargaining chip to fend off worse governmental interference. The impact of this reform has remained modest, as the fees income from authentic notarial acts accounts for an average of around 90% of notaires’ earnings, although a minority of members in economically disadvantaged regions (especially in central France) have to be satisfied with a mere 70% and are therefore forced to generate further income from additional services - by any standards, nationally or internationally, still not a bad position to be in. The institution of fixed fees has, however, not prevented French notaries from steadily expanding their scope for commercial pricing even in the context of authentication. As since 1986 negotiated fees have been officially permitted for the exceptional event that a notarial act is not required by law but nevertheless requested by a client, there is a loophole for a more liberal application of the norm.
Negotiated fees have become perfectly common in areas where there is competition with other professions, as for instance in company law matters. Here rebates are offered on fees that would otherwise exceed 80,000 euros, and on occasion fees are waived altogether. (Schützeberg, 2005, pp. 157ff.) The National Council’s warnings of the political risks of this trend don’t appear to be heeded. Grass roots’ calls to press the government to raise fees are discouraged by the profession’s leadership as unwise in the present climate. Members have been urged to let sleeping dogs lie and to heed evidence from a number of other countries where highly unwelcome developments have already occurred: Quebec and Switzerland have abandoned the fees scale altogether, the Netherlands are phasing it out, and Belgian notaries are fearing the worst; Italy now merely sets maximum and minimum fees levels, and Spain has introduced severe fees reductions.
Rather than pressing for more generous fees for French notaries, members are exhorted to resist the temptation to deviate from the official fees scale in order to avoid offering their enemies - the bar, the EU Commission, the Ministry of Finance - the exact weapon they need to justify the abolition of the entire system. Rocking the boat would be highly unwise, the CSN President warned them at their conference in 2003, given the profession’s almost total reliance on fees-based income. Nor could they, in his view, expect much sympathy from the Ministry of Finance whose figures for the year 2000 had just shown notaries to be the highest earners amongst French liberal professions. (Roth, 2003) What was really needed, the CSN President insisted, was a simplification of the existing fees structure, providing (a) greater transparency for clients and (b) adequate safeguards for notarial offices in non-favoured regions, but without increasing overall costs to society. If this antagonised the country’s very few high earners (who would lose out), so be it. This diplomatic balancing act on the part of the profession’s leadership has since paid off. By 2004, the CSN had started discussions with the Ministry of Justice about a ‘modernisation’ of the remuneration system, the profession having been reassured by the Minister that the fixed fees scale for their work as public officers would not be called into question, as it served social justice and equality amongst clients and amongst members of the profession.
Business structures
Notaries everywhere in the world are a small group compared to their main rivals, the advocacy. Traditionally, they have worked each in their own office and in relative isolation. Today, France, with the possible exception of the Netherlands, is the country where the profession has moved furthest away from this mode of working and has made the greatest strides in adapting organisational structures to modern market requirements. On 1 January 2006, France had 8299 independent notaires (around one fifth of the number of avocats), making for a ratio of 7308 per head of population - a relatively high density by Western European comparison [6]. Only roughly a quarter (2184) still operate as sole notaries [7], almost half of these in rural areas which take up some 70% of the country’s territory. For some years now, thinly populated rural regions, where fully fledged offices have ceased to be viable, are provided for by bureaux annexes attached to a fully functioning office in the same region. The majority of notaires (6115) are members of groupings of different types and sizes. The option of partnerships, which was first made available in 1966/67 and was further expanded in the early 1990s, has opened the door to entrepreneurial thinking and management, encouraged rationalisation, and made it possible for individuals to specialise (although as yet very few do). Notaries may opt merely to share office facilities (société civile de moyens - S.C.M), an option rarely taken up (a total of 10 by December 1999); or to set up or join one of two types of société civile professionelle (S.C.P) which is itself a legal person - the choice of the majority since the late 1960s; or (an option available to the notariat since 1990/1993) to join one of three possible forms of an incorporated company (société d’exercice libérale – S.E.L), a route which has been taken by a small number (50 by 30 June 2003), but which is having significant impact in terms of shifting the profession towards an entrepreneurial culture. The size of notarial firms, though still tiny compared to that of law firms, is rising well beyond the level found anywhere else, with the sole exception of the Netherlands whose notariat is the most liberalised on the continent of Europe. In France in early 2005, the largest notarial firm counted a staff of 8 partners, 8 salaried notaires, and c. 100 office staff, of whom 11 were fully qualified notaries awaiting appointment to offices of their own (notaires diplômés).
Business structures
Notaries everywhere in the world are a small group compared to their main rivals, the advocacy. Traditionally, they have worked each in their own office and in relative isolation. Today, France, with the possible exception of the Netherlands, is the country where the profession has moved furthest away from this mode of working and has made the greatest strides in adapting organisational structures to modern market requirements. On 1 January 2006, France had 8299 independent notaires (around one fifth of the number of avocats), making for a ratio of 7308 per head of population - a relatively high density by Western European comparison [6]. Only roughly a quarter (2184) still operate as sole notaries [7], almost half of these in rural areas which take up some 70% of the country’s territory. For some years now, thinly populated rural regions, where fully fledged offices have ceased to be viable, are provided for by bureaux annexes attached to a fully functioning office in the same region. The majority of notaires (6115) are members of groupings of different types and sizes. The option of partnerships, which was first made available in 1966/67 and was further expanded in the early 1990s, has opened the door to entrepreneurial thinking and management, encouraged rationalisation, and made it possible for individuals to specialise (although as yet very few do). Notaries may opt merely to share office facilities (société civile de moyens - S.C.M), an option rarely taken up (a total of 10 by December 1999); or to set up or join one of two types of société civile professionelle (S.C.P) which is itself a legal person - the choice of the majority since the late 1960s; or (an option available to the notariat since 1990/1993) to join one of three possible forms of an incorporated company (société d’exercice libérale – S.E.L), a route which has been taken by a small number (50 by 30 June 2003), but which is having significant impact in terms of shifting the profession towards an entrepreneurial culture. The size of notarial firms, though still tiny compared to that of law firms, is rising well beyond the level found anywhere else, with the sole exception of the Netherlands whose notariat is the most liberalised on the continent of Europe. In France in early 2005, the largest notarial firm counted a staff of 8 partners, 8 salaried notaires, and c. 100 office staff, of whom 11 were fully qualified notaries awaiting appointment to offices of their own (notaires diplômés).
Monoprofessional and even multiprofessional networks, albeit of low profile and local or regional rather than national in character, have been around in France in the field of law since the 1970s, the decade during which two large accounting firms (that later became KPMG and Coopers and Lybrand respectively) first took roots in France. Ten years later, the ‘Big Eight’ turned their attention to France. By the late 1990s they had consolidated to form the ‘Big Five’ and had captured around one third of the legal services market for businesses. The fusion of avocats and conseils juridiques in 1990 which had been intended to create a strong counterweight of French lawyers in the field of commercial and company law had backfired in that it sparked off numerous controversies between avocats and experts-comptables leaving no time for discussions about multiprofessional groupings. The issuing in 1998 by the national organisation of bars (Conseil national des barreaux) of highly restrictive regulations intended to apply to such groupings involving lawyers, led to protest among a number of more progressive members of profession, and resulted in the government-sponsored Nallet report of 1999 on multidisciplinary networks and the legal professions, recommending the setting up of multidisciplinary groupings by French lawyers and accountants to counteract the work of the ‘Big Five’. (Nallet, 1999; Bpoigeol & Willemez, 2005).
If the French bar resisted the involvement of avocats in multidisciplinary networks, the same applied to the notarial leadership. In 1993, the CSN put an early break on developments in this direction by setting up a Network Committee (Comité des Réseaux, CORES) supposed to register, vet and control such groupings, which was however left without any means of enforcement, as disciplinary powers remained with departmental chambers who would have to inform the CORES of any irregularities. Unsurprisingly, the CORES ended up simply registering those who volunteered to come forward and has been unable to fulfil the function it was initially set up to perform, with many of those on the register having ceased to function actively. As for the Nallet report, the Conseil supérieur national had successfully lobbied the report’s author and his commission not to include the notaires in his study in recognition of their special status of public officers, fearing the eventual loss of the profession’s separate identity.
Larger notarial networks of national status still tend to be monoprofessional ones. An outstanding example, as well as among the first of its kind, is the Groupe Monassier. (http://www.groupe.monassier.com/) Established in 1992 by the Parisian notaire Bernard Monassier who had read the signs of the times and was determined to keep up with market developments and the requirements of enterprises, it currently comprises 24 notarial firms with a total of 86 notaires and 650 staff. The network projects the image of a modern enterprise, committed to cutting-edge expertise supported by relevant research. An executive committee of 9 members is responsible for implementing the strategies agreed on at their general annual meeting, ensuring a common approach to methods of working, organisation and communication. Having initially focused on commercial law and inheritance planning, the network now offers a comprehensive range of services, covering family and inheritance law, international law, company and commercial law, and property law, with an emphasis on complex financial and tax issues. Members are chosen from across the country to ensure full geographical coverage, and they are carefully vetted according to certain criteria: they have to have and be prepared to develop expertise in the network’s areas of work, be members of an SCP or SEL, achieve a certain minimum annual turnover, pay a fee to join as well as annual membership fees, and be approved by existing members.
In recent years, a first move on the part of Groupe Monassier in the direction of breaking out of the monoprofessional structure has been the institution of corresponding membership, which has made it possible to include foreigners - not only notaries but also lawyers. Corresponding members require approval by the executive committee, pay a fixed fee, and are allowed to use certain of the association’s services. Non-French members currently are mainly from Western Europe (Germany, Luxembourg, the Netherlands, Belgium, Spain, Great Britain and Switzerland), but also from francophone Africa and Canada. The Group is committed to continuing staff development and research, requires its members to acquire ISO 9001 certification, and employs the most up-to-date methods of communication. More recent national monoprofessional groupings have tended to focus on one specific area previously neglected by notaries and requiring a high degree of specialisation. The best known of these is Pharmétudes, a network created to engage with all aspects of legal advice required by pharmacists, that is to go beyond the normal notarial act of authenticating the purchase or sale of a pharmacy. (http://www.pharmatudes.com)/. The network is funded by its members, runs a constantly updated database of acquisitions and sales of pharmacies nationally, is regularly represented at pharmacist conferences, has a carefully placed national membership, is committed to keeping up with all developments in the field and to continuing training for both notaries and their staff. A more recent network, Nôtel, created in 1998 for the hospitality industry (hotels, bars, restaurants), was modelled on Pharmétudes. But in contrast to its model, it is a closed network, accessible only to members, with a much larger market and a more rapid turnover, as ownership is subject to frequent change. There is a third national grouping, Jurisvin, which caters for all legal needs of winegrowers. (http://www.jurisvin.fr/)
In 2000, the annual conference of the Assemblée de liaison des notaires de France was devoted to the topic of organisational structures of notarial firms. The published report (Assemblée de Liaison des notaires de France, 2000) presented a detailed picture of the profession’s precarious situation and urged members to take seriously the need to modernise its structures. One suggestion from a politically active Parisian notaire was to make more efficient use of the statutory relaxation provided in 1990/1993 by creating holdings. These would, he argued, facilitate the setting up of international as well as interprofessional networks able to respond to new market requirements, while also representing a truly proactive response to the Nallet report and its reflexions on the conditions necessary to modernise the juridical professions - the notariat included. (Humbert, 2000) The only condition for the notariat to get involved would have to be that all those participating belong to regulated professions, therefore strictly excluding banks. Another advocate of networks of all types appealed to his colleagues to remember how the bar ultimately benefited from their exposure to liberalisation in the context of their struggle with the five big accountants firms. Putting one’s head into the sand is not an option, he claimed, urging instead to plan for the worst possible scenario, that is the termination of their special status and protection from competition. After all, what had happened in Quebec and in the Netherlands, could conceivably happen in France. And if interprofessional associations worked in the medical field, why should they not work in the field of law? (Lecuyer, 2000) Multiprofessional groupings that do exist tend to be smaller in scope than monoprofessional ones. They are typically local and regional in character, based on joint interests and personal relations amongst notaires, avocats, experts-comptables, banquiers-assureurs etc., and often arise from social groupings such as the Lions or Rotary Clubs - developments encouraged by the growing pressure of European and global forces on the liberal professions in general and on the legal services market in particular.
An impressive recent example of interprofessional co-operation was the first ever joint congress of 7 liberal professions in Lyon in June 2006. It was the brain-child of the Ordre des experts-comptables de Rhône-Alpes who had invited a number of prestigious speakers including a prominent member of the European Parliament. Around 400 professionals attended, including notaires and avocats, all keen to present a united front in the face of the European Commission’s liberalisation measures. No doubt, further multiprofessional initiatives will result from this event. An issue closely linked with that of networks is the need for greater specialisation within the profession - a notion inherently alien to the traditional notaire who regarded his generalist label as sacrosanct and essential to his role as personal counsellor for the whole family and, ideally, from one generation to the next. In a way, of course, the bulk of the profession have already become specialists, i.e. specialists in property law, though not by strategic planning but by default. In structural terms, the specialist does not officially exist, although in larger offices in urban areas, especially in Paris, a degree of specialisation has naturally evolved. The more progressive elements of the profession argue that just as there is room and need for general practitioners and specialist surgeons in medicine, so there is room and need for generalist and specialists notaries. (Rose, 2005) But they are as yet in a minority.
Management culture
Promoting the need to transform notarial offices into efficiently managed enterprises has become a priority for the Conseil supérieur. Members are urged to ensure that their offices are organised on proper business principles, paying particular attention to personnel management, quality control systems, and the use of technology. Predictably, achievements in this context vary greatly, with larger city firms having obvious advantages over small and isolated rural ones. Improvements in personnel management have become particularly important given the French profession’s striking reliance on support staff, both notarial and administrative, a feature unknown in most other civil law systems. Office holders are constantly reminded by the National Council that the age of patriarchal regimes is over and that they need to take seriously their role as employers, entrepreneurs and managers. From 2004, annual staff interviews for developmental purposes have become a statutory entitlement of all employees (la loi Fillon), and written accounts of these are required to be handed to interviewees and be available for annual inspections. A key outcome of these interviews is to be an agreement between employer and employee on her or his staff development plan, given that the new legislation entitles every employee in France to around 20 hours of training a year, a good deal of which can be taken during working hours without loss of pay (Droit individuel de formation (Dif)).
Management culture
Promoting the need to transform notarial offices into efficiently managed enterprises has become a priority for the Conseil supérieur. Members are urged to ensure that their offices are organised on proper business principles, paying particular attention to personnel management, quality control systems, and the use of technology. Predictably, achievements in this context vary greatly, with larger city firms having obvious advantages over small and isolated rural ones. Improvements in personnel management have become particularly important given the French profession’s striking reliance on support staff, both notarial and administrative, a feature unknown in most other civil law systems. Office holders are constantly reminded by the National Council that the age of patriarchal regimes is over and that they need to take seriously their role as employers, entrepreneurs and managers. From 2004, annual staff interviews for developmental purposes have become a statutory entitlement of all employees (la loi Fillon), and written accounts of these are required to be handed to interviewees and be available for annual inspections. A key outcome of these interviews is to be an agreement between employer and employee on her or his staff development plan, given that the new legislation entitles every employee in France to around 20 hours of training a year, a good deal of which can be taken during working hours without loss of pay (Droit individuel de formation (Dif)).
Notarial employers, on whom rests the onus of setting up the annual interview, are taking some time to absorb and act on the new regulations,. But so, it seems, are their staff who would have to take the initiative to make use of their right. Small offices with fewer than 10 staff are finding it particularly difficult to comply, both in practical and in psychological terms, one of the more frequently heard objections being, Why and how conduct formal interviews when you are working with these people day in day out? And how can you spare them when there is nobody to replace them? Until a few years ago, ready availability of qualified applicants for jobs in notarial firms could be taken for granted. But this has now changed, as young people prefer more glamorous and less specialised careers, better remuneration and a city environment. Both, qualified notarial and qualified administrative staff, are in short supply nationally and will increasingly become so over the next 5 years, as a wave of retirements amongst baby-boomers of both categories is setting in. Nearly 1000 notaires will have retired by 2008. Replacements can come from three groups: either the current pool of notaires stagiaires (trainees in their final stage of training), or from among notaires assistants (those who have completed training and are waiting for opportunities for appointment to independent notarial status), or from notaires salariés (fully qualified notaries with all the rights and duties of a notary, but salaried rather than self-employed), all of which also need to be replaced.
Success in recruiting such collaborators varies greatly, with rural offices experiencing most difficulties while those in Paris have all the choice. A particular headache to the profession is caused by the fact that not infrequently those fully qualified as notaires (by a process which involves the profession in not inconsiderable expense) end up opting for another career, either because they cannot come by an office of their own or because competing professions who are very happy to absorb young lawyers with additional notarial expertise are making them more attractive offers. The post of notaire salarié, a notion regarded in most civil law systems as a contradiction in terms as it would seem incompatible with the essential feature of independence, was created in 1990 and initially intended not only as a safety-valve to ease the pressure brought about amongst aspiring notaries by the numerus clausus on the one hand and financial constraints on being appointed to an office on the other, but also as an option for conseils juridiques whose profession was being disbanded and whose membership would have provided the notariat with welcome access to the fields of company and commercial law [8]. There had been the hope that the notaire salarié might facilitate flexibility and modernisation without any risk to the existing tight regulatory framework. (Lefalher, 2000) However, the result so far has been disappointing. The take-up has been distinctly hesitant (2004: 200 notaires salariés, i.e. 2.5% of the total) and the status of notaire salarié has generally come to be regarded with suspicion, a kind of second-class notaire. As for the conseils juridiques, they mostly moved straight into the advocacy, strengthening its position in the area of commercial and company law and thereby reinforcing rather than easing pressures on the notariat.
Possibly the greatest human resource problem facing the French notariat is a looming shortage of qualified administrative and technical staff, on whom the success of any notarial office heavily depends. While during the last thirty years demand for jobs has generally outstripped supply, a wave of retirements in coming years will create gaps which nobody can quite see how to fill. To pre-empt serious problems, the CSN set up an Observatoire des collaborateurs which in 2003 conducted a survey and produced the first comprehensive national picture of administrative staff on permanent employment contracts in notarial offices, covering a wide range of different facets, including employees’ functions, specialisations, and retirement plans. (Assemblée de Liaison des Notaires de France, 2004) It emerged that of the total of 41,108 staff in post by the end of 2002, a quarter, that is over 11,000, would have retired by the year 2010. The detailed profile of those retiring has provided the CSN with a clear overall idea of what training needs to be put in place in preparation. Most of this will concern women, as these already make up 82% of administrative and technical staff, and their share is likely to rise in future. Significant regional variations will require a good deal of fine tuning, with support needed for the most economically disadvantaged regions where recruitment of staff has been problematic at the best of times.
Quality control is a relatively new concept for French notaires and sits awkwardly with the profession’s traditional self-image. As recently as 2001, the then President of the CSN referred to ISO as a very Anglo-Saxon notion not suited to French culture (‘ce que nous sommes’), and warned anyone trying to use it for publicity purposes. Instead he recommended simple certification of services. By 2003, the CSN had changed President and position. The mere certification of services was declared to be unsuitable as it was not entirely under the profession’s control, but partly in the hands of consumer organisations and the national competition authority. Nor were their methods, involving surprise visits and the direct questioning of clients, compatible with the profession’s ethical code. Generally speaking, certification methods were said to lack sophistication and to be unsuited to the individual character of offices. Instead, the ISO system was recommended to the membership. They were reminded that quality control of some form had become essential, be it only to fend off competition, especially in the European context. At the start of 2004, a two-year quality plan (la démarche qualité notariale, DQN) was launched by the CSN, based on 15 ways of improving the quality of notarial services. Those willing to participate were promised financial support. The plan involves three stages: the first focuses on improving the running of the office (e.g. reception services, filing, and archiving systems), the second on management issues, while the third prepares for certification ISO 9001 (2000). The target for the end of 2006 was set at 1200 firms being involved in some form. Progress during the first two years had been rather slower than hoped. Only around 650 had got involved. However, 21 departmental chambers and 9 regional councils had launched their own plans, which promised to speed things up, while a good number of (mostly southern) regions had not even begun. Ahead of the pack were 28 firms who already held the ISO certificates, amongst them 15 members of Groupe Monassier.
The high profile given over to quality is reflected in a structural reform introduced in 2004. Departmental chambers have been relieved of their disciplinary powers (traditionally their key role), which have been moved up to regional level to introduce an element of distance between the parties, make the process a more transparent and objective one, and silence the profession’s external as well as internal critics accusing it of laxness and attempts to cover up disciplinary offences committed by those same 10% who regularly run up an annual record of client complaints well above the average level. This reform has been presented by the leadership as a bold one. Yet, more progressive elements within the profession - admittedly, still a minority - consider it to be no more than a reformette and would like to see further measures in this direction. Why, some have been asking, does the notariat not have the courage of the Paris bar which publishes in its internal bulletin an annual list of sanctions and the reasons for them? As things are, there is not even a binding obligation on the part of the regional council to inform the complainant of the outcome of the procedure. The number of critics of the traditional secrecy surrounding disciplinary offences as well as the lack of rigour in applying the existing scale of possible sanctions is growing, as is awareness that today a poor public image can no longer be shrugged off but is likely to have serious economic consequences which affect everyone in the profession.
Greater transparency and disciplinary rigour require a tightening up of annual inspections of notarial offices, which are generally accepted to have become rather lax, with the result that in some instances turpitudes have been allowed to be committed for many years without being spotted. Inspections are carried out by members of the profession accompanied by experts qualified to assess the state of accounts and the handling of client moneys, normally accountants (experts-comptables). Emphasis has traditionally been on financial aspects, although legally all aspects of office management are supposed to be subject to critical scrutiny, including the use of modern technologies. In their efforts to sensitise members to the crucial significance of quality control, the profession's leaders are emphasising the need for the profession to retain its control over the procedure. Occasionally, the need for training for inspectors is mentioned, but as yet no action appears to have been taken.
The French notariat has made considerable strides over recent years in making use of new technologies to improve notarial services. As early as 1979, they were asked by the government to establish a national data base of last wills. This has now been computerised and can be accessed electronically by notaires to find out whether a will exists, when it was registered and in which notarial office it has been deposited. The French data base is linked with a similar one in Belgium. Then there is the electronic network REAL, a secure intranet for the transmission of data among notaires, and the REAL card, issued by the National Council to each notaire and their qualified collaborators, which allows them to access confidential data stored in the profession’s electronic data bases. Work on electronic storage and archiving of acts is in progress. Thirdly, the profession has developed a constantly updated national data base of all types of property on the market, listing precise information on location, key features, technical details, and price (la Base B.I.E.N.), thereby improving the speed and quality of advice given to clients as well as providing more accurate information on developments in the property market. Finally, the five regional research centres (CRIDONs) have computerised their materials, and the Parisian Chamber has created a system allowing clients confidential access to their files as well as to communicate with their notaire on line. Full use of these tools by all requires individual offices nation-wide to be up to speed with their own technological equipment. A good deal still remains to be done in this context. As yet, ignorance of the existence and nature of these tools, lack of awareness of the growing importance to make use of them, and outdated and incompatible equipment are anything but uncommon.
All in all, considerable efforts are being made by the leadership towards nudging the profession into a new era of entrepreneurial accountability and openness, as an urgent measure to maintain credibility in an environment where both these qualities are regarded as a sine qua non. Ironically, this coincides with an enhanced political emphasis on the official nature of the profession, including all its facets and activities, in the hope that this might shield it from the harsh winds of ‘ultra-liberalism’ blowing from Brussels and finding a worrying echo within France.
In the words of the President of the CSN on the occasion of the 2004 annual meeting of the Assemblée de Liaison des notaires de France: "The notariat finds itself once again at a turning-point in its history. Having, in the 1980s, successfully stood up to those advocating a position of ‘all state’ (‘tout Etat’), it is now confronted with those unconditionally favouring the ‘without state’ (‘sans Etat’). Between the two, there is another path, there is the notariat, the notariat which combines social usefulness and economic efficiency, a notariat that combines public service and service to the public - but, beware, that path is a narrow and demanding one". (Dejoie, 2005, p.18)
What future ?
The French notariat’s strategy has been shaped by its determination to maintain and consolidate its autonomy and status. This has been achieved by means of occasional minor concessions to pressure for change from within and without while remaining firmly in control of its own destiny. In this it has been able to count on the unwavering support of the Ministry of Justice which has shown no appetite to upset its historically grown and structurally robust relationship of interdependence with the profession. However, this constellation is now at risk, as economic globalisation and the growing weight of the European Union have shifted the focus away from a purely national to a European and even world level, and economic arguments have been gaining predominance over all others. The World Bank’s reports Doing Business of 2004 and 2005 have left notaires in no doubt that their very raison d’être is being questioned. (http://www.doingbusiness.org/) Nor can they draw much comfort from the European Commission’s approach to the liberal professions. As an institution deeply rooted in the system of civil law, the notariat has additional reason to feel vulnerable, as competition from common law and common law lawyers is getting ever more threatening [9].
Faith in its own strengths backed by solid government support has, it seems, for quite some time clouded the profession’s awareness of the reality and precise nature of the threats ahead. Only the last five or six years have seen the start of serious efforts at a systematic and coherent defence of its position. The French government is still firmly behind the notariat, insisting on the need for the traditional regulatory regime to remain in place, including all the pet targets for attack by those advocating a liberalisation of the legal services market: nationality requirement, numerus clausus, fixed fees, ban on advertising, and limitations on permissible organisational structures. After all, an attack on the nation’s officiers ministériels and public officers, and on their statutory rights and duties also represents an attack on the French government’s authority to regulate the liberal professions as it sees fit. The National Council of Notaries and the Minister of Justice have been united in their defence of the French notarial system, presenting it as not only viable but the ideal model for a well-functioning economy. In the words of the Minister, in March 2003: "The organisational principles of the notariat and the mission of the authentification of acts represent exportable values. Their efficiency can be demonstrated. The prominent characteristics of continental law make a great contribution to legal security. ... The notarial profession finds its proper place in this construction in re-enforcing mutual trust amongst the various parties, guaranteeing the reliability of legal acts and investing their content with certainty. This strategy is in tune with economic developments in all countries." (Boucher, 2003, pp. 43-4)
The profession’s newly designed strategies vis-à-vis the European Commission’s policies have been closely associated with the person of Armand Roth, Vice-President of the CSN in 2002, its President in 2003, and President of the Organisation of European Civil Law Notariats (CNUE) in Brussels in 2004. Under his leadership, a three-pronged approach has been adopted and implemented. Firstly and most importantly, a range of internal reforms have been set in motion to put the profession’s own house in order, generally modernising its workings and enhancing transparency, accountability, quality of services and the robustness of disciplinary procedures. Secondly, the first serious efforts have been made to assess the nature and possible impact on the profession of Brussels’ liberalisation project. Armand Roth never tired of rallying his troups to engage in the fight for their culture, language, legal system and their own profession, and made every effort to raise the profession’s profile and get the national public on its side by demonstrating its contribution to society and of the quality of its services. Finally, under his leadership, the French notariat began to look beyond the country’s frontiers, to engage in discussions with European notarial organisations, to foster the solidarity with other civil law notariats in Europe and in the world at large, and to get actively involved in shaping developments in the evolution of the European legal space.
His successor, Laurent Dejoie, appears determined to follow in his predecessor’s footsteps. The CSN itself has undergone a restructuring to meet the new demands made on it. (D’Oysonville, 2005) In 2005, the post of Vice-President for European affairs was created within the National Council, and an office set up in Brussels, following the example of Austria and Germany who had been on the alert for some time.
So far, the precise outcome of EU liberalisation efforts in relation to the profession of notaries is still in the balance. Should notaires’ public officer status eventually be confirmed (as appears likely), the two most contentious directives relating to the liberal professions would not immediately apply to their core activity, i.e. the creation of authentic acts, as it is an integral part of the French non-contentious judicial system. What would remain uncertain, however, is the answer to the question what will happen to the remainder of their activities, that is those not covered by their official status but part of their role as providers of legal services in the open market. In contrast to, for instance, German notaries whose activities are limited to authentication work and who do not engage in ordinary commercial transactions, French notaires are after all active on both fronts and are constantly urged by their leaders to widen their expertise and range of services offered, whether in the context of property transactions preceding the actual drawing up of the authentic act (la négociation immobilière), inheritance planning and management (la gestion de patrimoine), or legal advice to businesses. Also, somewhere in the background, there always lurks the nightmare scenario of a change of legislation regulating property registration, which currently accounts for over half of notaires’ average income.
There already exist studies funded by the Spanish government claiming that mandatory intervention by notaries or, indeed, any other lawyers, in land and company registration should be abolished as changes in the nature of transactions and methods of registration make such intervention redundant. (Arruñada, 2004a; 2004b). Given their political and commercial savvy and historical record of successful crisis management, notaries in France should be better placed to face future uncertainties and threats than their counterparts in most other West European countries. But status and close links with their government and other national organisations have ceased to be guarantors of the notariat’s continuing identity, relevance and economic prosperity.
It is now economic considerations that must take centre stage if this tiny profession largely unused to having to cope within a competitive market is to hold its own: against their fiercest competitors, the ever growing number of avocats who have long learnt to embrace the culture of an open national and global market and are keen to see the notariat stripped of its privileges (Pierre Redoutey, 2005); against ever more powerful banks, insurance companies and accounting firms who are well prepared to take over as soon as the opening is there; and not to forget, against competitors from abroad, most particularly Anglo-American law firms (Law Gazette, 2006), and even a minute, but vociferous and effective lobby of British notaries, which has been putting pressure on the European Commission to ensure the abolition of the nationality requirement to allow them access to the lucrative notarial market in France (Kober-Smith, 2006). However confident their official pronouncements, French notaires may, in the medium to long term, find themselves isolated and dependent on their very narrow (though currently most lucrative) field of official expertise, unless they follow the example of groupings such as the Groupe Monassier and adopt a radical strategy to modernise their organisational and client structures, management style, service range and delivery so as to meet the expectations of an increasingly demanding national and international market.
NOTES
1. For a recent example that caused the CSN a good deal of headache, see Notaires. Succession d’embrouillles, Que Choisir? (ed. by the Union fédérale des Consommateurs), no. 426, 26 April 2005.
2. Loi 48-460 permettant aux femmes l’accession à diverses professions d’auxiliaires de justice (JO 21 mars 1948); this came into force with the publication by the Minister of Justice of the Circulaire relative à l’accès des femmes aux fonctions d’officier public ou ministériel on 15 July 1948.
3. Austria (2002): 3.6%; West Germany (2003): 6.1% (notaries only) and 9% (solicitor notaries); the Netherlands (2001): 9.1%; Spain (2005): 30% . The picture is very different in central and eastern Europe, where women represent the majority. Greece (2004) boasts a record of 83% women.
4. Institut Notarial de l’Entreprise (INE), Institut Notarial de l’Immobilier (INDI), Institut Notarial du Patrimoine (INP), Institut Notarial de l’Espace Rurale et de l’Environnement (INERE), Institut Notarial des Collectivités Locales (INCL).
5. The total number of notaries in France on the eve of the French Revolution is estimated to have been 16,000 to 18,000 - twice today’s number, for a population of 26 million, i.e. less than half of today’s. (Moreau, 1989, p.51)
6. Austria: 17,122; Spain: 14,080; Luxembourg: 13,015; Italy: 11,620; the Netherlands: 11,394; Germany: 8995; Greece: 4962.
7. This was the norm until the 1960s. - 1970: 95.4%; 1990: 39.9%; 1999: 28.2% (Eric Lefalher, 2000).
8. September 2004: 2000 titulaires de 3° cycle notarial (mostly notaires stagiaires), 5000 diplomés notaires (notaires assistants), and 200 notaires salariés (http://www.mjn.fr/).
9. For a spirited response to the Doing Business reports and a defence of the merits of civil law in promoting economic development, see Association Henri Capitant (2005). A carefully structured argument leads up to the tongue-in-cheek question whether Doing Business might perhaps be most aptly described as ‘le Da Vinci Code du droit comparé’: "The year 2004 was marked by the success of a novel which, at the price of hasty comparisons, hazardous hypotheses and a number of untruths, has pretended to reveal the key to 2000 years of history. Delving into the reports Doing Business, one cannot help asking oneself whether this genre is perhaps not limited to popular literature." (p. 33, my transl.)
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http://www.notaries.org.uk/page32/page27/page27.html
ART. 57 OF E.U. REGULATION 44/2001: AUTHENTIC ISSUES OF HUMAN RIGHTS?
BY GREGORY TAYLOR
Notary Talk of England and Wales (2005)
[NOTE : This article will soon be updated to take into account Regulation (EC) 805/2004 of 21 April 2004 relating to European Enforcement Orders for uncontested claims, which applies from 21 October 2005. To download the new Regulation in PDF format, click HERE ] [BRACKETED INFORMATION IN ORIGINAL ARTICLE]
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http://www.notaries.org.uk/page32/page27/page27.html
ART. 57 OF E.U. REGULATION 44/2001: AUTHENTIC ISSUES OF HUMAN RIGHTS?
BY GREGORY TAYLOR
Notary Talk of England and Wales (2005)
[NOTE : This article will soon be updated to take into account Regulation (EC) 805/2004 of 21 April 2004 relating to European Enforcement Orders for uncontested claims, which applies from 21 October 2005. To download the new Regulation in PDF format, click HERE ] [BRACKETED INFORMATION IN ORIGINAL ARTICLE]
EU Council Regulation (EC) No. 44/2001 of 22 December 2000 came into force on 1st March 2002 [to download the full text of the Regulation in PDF format, click HERE]. At first sight, a Regulation describing itself as dealing with jurisdiction and the recognition and enforcement of judgments in civil and commercial matters may seem to have little or no relevance to Notarial acts, which are not "given by a court or tribunal", and although Notaries are appointed by a Court or other lawful authority, they are independent and therefore not "officers of the court" (Art. 32). Turning however to Art. 57.1, we find : "A document which has been formally drawn up or registered as an authentic instrument and is enforceable in one Member State shall, in another Member State, be declared enforceable there...".
Oddly, the Regulation does not define the term "authentic instrument", but by Art. 57.3, the document must satisfy the conditions necessary to establish its authenticity in the EU Member State of origin.
The concept of an "authentic instrument", being unknown to the common law, has no practical meaning in England and Wales. However, other "equally authentic" versions of the Regulation translate the term as : German - öffentliche Urkunden ("public certifications") ; French - actes authentiques ("authentic acts") ; Spanish - documentos públicos ("public documents") ; Italian - atti pubblici ("public acts"). The Regulation states that an "authentic instrument" within Art. 57.1 and which is enforceable in the Member State of origin can be enforced in another Member State if it has also been declared enforceable in that other Member State (and in the case of the UK, in the relevant jurisdiction within the UK).
In the Continental European "civil-law" jurisdictions, Notarial acts can give a valid title for enforcement, provided that they are in "public" form. An example : A German contract for the purchase of land must be entered into in the form of a Notarial "public" act, and in the document, the parties can submit to enforcement in the event of default by either party. If the buyer defaults in payment, the seller can enforce in Germany his rights against the buyer without recourse to the Courts, as the contract operates as an acknowledgment of indebtedness by the buyer. Supposing the buyer has moved to, say, England, then the Regulation provides for the acknowledgment to be directly enforced in England, subject to the procedures laid down in the Regulation, i.e. a certificate of enforceability (Annex VI) by the German Notary (as the "competent authority", within Art. 57.4, of the Member State of origin), followed by a certificate of enforceability by the "court or competent authority" (Art. 57.1) in England, i.e. the High Court of Justice (Annex V). It is clear from the prescribed form of the Notary's Annex VI certificate, which refers to "creditor" and "debtor", that the enforcement can only be in relation to a liquidated, i.e. already ascertained, sum of money, such as would otherwise be the subject of a debt action if Court proceedings were required.
Such cross-border enforceability of Continental European contracts could be used in almost any contractual situation, i.e. in addition to those cases specifically prescribed by national law (such as real estate transactions in Germany), provided that the contract is entered into in Notarial "public" form.
There can be no doubt that "civil-law" EU Notaries will increasingly seek to apply in other EU jurisdictions, including England and Wales, enforcement provisions contained in their own Notarial acts, through the simple device of drawing up contractual documents in Notarial "public" form.
Art. 57.1 requires that the document be "formally drawn up or registered as an authentic instrument". While the term "formally" is also not defined in the Regulation, it is simply taken for granted by "civil-law" jurisdictions that Notarial acts drawn up in "public" form come within the Regulation, even though the word "Notary" does not appear in the Regulation.
As mentioned above, the term "authentic instrument" has little or no meaning in "common-law" jurisdictions, such as England and Wales, whose legal culture has been based since the Magna Carta of 1215 on the principle of "due process of law", i.e. on the determination of legal rights and obligations by the Courts. Our Human Rights Act 1998, which incorporates into UK law the European Convention on Human Rights ("ECHR"), can therefore be seen as a formal statutory codification of a centuries-old legal and social principle. Art. 6 ECHR states : "In the determination of his civil rights and obligations..., everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law". The often-cited advantage of an enforceable Notarial "public" act is that it avoids the necessity for Court proceedings, however it is precisely this "advantage" which makes it vulnerable to attack under Art. 6 ECHR. It may well be that the debtor has the right to have enforcement stayed and/or amended or revoked by application to the Court in the original Member State, but this is an entirely separate right to that guaranteed by Art. 6 ECHR, which requires that the determination of the obligation is itself effected by due process of law, i.e. by a Court.
The Courts in the UK are increasingly extending the application of the Human Rights legislation and principles into areas which involve property and commercial issues. Art. 57.1 of the Regulation states that the court with which an appeal is lodged against the decision on an application for a declaration of enforceability shall refuse or revoke such a declaration only if enforcement of the instrument is "manifestly contrary to public policy" in the Member State addressed.
It is submitted that our Courts will probably hold that a prima facie breach of Art. 6 ECHR renders the enforcement of Notarial "public" acts "manifestly contrary to public policy", i.e. on the basis that such acts purport to create extra-judicial remedies.
It is even possible that Notarial acts containing enforcement provisions might not be enforceable at all in any EU jurisdiction which has incorporated the ECHR into its own national legislation. In any event, we will have to wait and see how the Courts, both here and in other EU jurisdictions, will seek to strike the right balance between commercial practicalities and reciprocity within the European single market, on the one hand, and the consistent upholding of human rights throughout the European Union, on the other hand. Gregory Taylor [Notary Public, Greater London]
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http://www.notaries.org.uk/articles/articles/notaries_in_england_and_wales.html
NOTARIES IN ENGLAND AND WALES
BY PROF. GISELA SHAW
(2004)
THE OLDEST LEGAL PROFESSION IN ENGLAND (1)
http://www.notaries.org.uk/articles/articles/notaries_in_england_and_wales.html
NOTARIES IN ENGLAND AND WALES
BY PROF. GISELA SHAW
(2004)
THE OLDEST LEGAL PROFESSION IN ENGLAND (1)
The profession of notary, the roots of which go back to ancient Rome, is arguably the oldest legal profession in England. With the spread in the Middle Ages of Roman civil law to countries north of the Alps, notaries found a place in continental Europe’s non-contentious jurisdictions. Their licences to practise, granted by the Pope or by the Holy Roman Emperor respectively, were not restricted to specific territories, and their instruments freely crossed national frontiers. A number of notaries, both ecclesiastical and imperial, also reached England. Since 1279, it has been the Archbishop of Canterbury who has appointed notaries in England, initially by authorisation of the Pope and the Emperor respectively, then, from 1533, by authorisation of the English Crown. A Court of Faculties, one of the oldest of the English courts (now located next to Westminster Abbey in London), was set up by the Crown and attached to the Archbishop of Canterbury, to deal with the practice of such appointments. The Court is presided over by the Master of the Faculties who is the most senior ecclesiastical judge and commonly also a judge of the Supreme Court. This system has been in place for almost 500 years. In England, notaries never attained the same prominence as they did in the continental European jurisdictions based on Roman law. As common law, with its preference for lay judges and oral testimony over trained lawyers and documentary evidence, increasingly replaced Roman law, the need for notaries began to diminish. The last major blow came in the 19th century with the transfer to the common law courts of the bulk of the business of the last two courts to apply Roman law, i.e. the Court of the Admiralty and the ecclesiastical courts.
Nevertheless, notaries in England and Wales have survived to this day as a separate legal profession. They even survived repeated take-over bids on the part of the Law Society, the last of these in 1884, thanks to the lobby of the powerful group of London Scrivener notaries (in 1884, 33 of a total of 48), then as now members of the London Worshipful Company of Scriveners founded in 1373. In contrast to their colleagues outside London whose notarial workload was not sufficient to enable them to practise exclusively as notaries, the London Scrivener notaries had established a strong position in the City of London’s commerce and banking and shipping industries. A geographically defined monopoly in and around the City of London shielded them from competition by general (solicitor) notaries from across the rest of the country, and was repeatedly reaffirmed by Parliament, most recently in 1990.
THE PROFESSION TODAY (2)
Between the middle of the 19th and the latter part of the 20th century, nothing much changed for notaries in England and Wales. The world at large, including the world of politics and law, had totally forgotten that they existed. Change began with the Courts and Legal Services Act of 1990. A watershed for the legal professions in England and Wales generally, the Act actually contained a brief reference to notaries - the first since the Bills of Exchange Act of 1882. Its section 57 removed two barriers to competition amongst notaries outside London: first, notaries ceased to be appointed to practise only within particular districts in England or Wales and were now able to settle and practise anywhere outside London; secondly, the apprenticeship system for notaries practising outside London was abolished, to be replaced by a meritocratic system based on national training qualifications, the details to be defined by the Master of the Faculties. At the same time, however, the Act expressly re-affirmed the geographical monopoly accorded to the Scrivener notaries in London, as well as their power to control their own separate system of training and access to their branch of the profession.
Having once again escaped state interference, the Scriveners in London continued to keep themselves at some distance from their provincial colleagues in England and Wales, while strengthening their bonds with notaries in the civil-law world, and only they enjoyed full membership in the International Union of Latin Notaries (UINL). Eventually, even the Scriveners were caught up in the government’s campaign to liberalise the legal services market. In a first step, they lost their autonomy over training and access to their branch of the profession, when in 1998 the Public Notaries (Qualification) Rules of 1991 for notaries outside London were replaced by more comprehensive and detailed Notaries (Qualification) Rules encompassing the profession as a whole. The second step came in the form of section 53 of the Access to Justice Act of 1999, and since then, the Scriveners have been subject to the same professional regulations as their colleagues across England and Wales.(3)
As the European market and the opportunities it offered have become ever more real, both groups within the profession have increasingly focused their ambition on narrowing the gap that separated them from their colleagues in the civil-law world. In particular, the Notaries’ Society has developed its keen interest in and commitment to the reform of notarial training within the framework of the new Notaries Qualification Rules, as well as to the promotion amongst its members of professionalism, solidarity, corporate identity and awareness of developments in the other Member States of the European Union. In 1991, the Society set up a magazine, "The Notary", as a first channel of communication, information and discussion amongst its membership. In 1999, this was complemented by an e-mail discussion group “Notary Talk”, created by one of its members. Since 1992, the UK Notarial Forum has provided representatives of notarial organisations in England and Wales, Scotland and Northern Ireland with an opportunity for regular meetings and exchange of views. In 1998, the Notaries’ Society’s efforts were rewarded by its being granted observer status with the International Union of Latin Notariats (UINL).
A part-time distance-learning Diploma Course in Notarial Practice has been offered since 1999 by the University of Cambridge. After 5 years of operation, 74 awards had been made. A critical review conducted in 2004 resulted in major adjustments, most of them aimed at ensuring greater academic rigour and respectability. The programme was raised to postgraduate level and the range of modules offered reduced to the 3 core subjects (Roman law, international private law, and notarial practice), therefore requiring all successful applicants to hold a degree in law. Assessment regulations were tightened and the maximum period allowed for completion reduced from 5 to 2 years. The training for all newly qualifying notaries in England and Wales has thereby broadly been put on a par with that for other lawyers within England and for the legal professions (including notaries) within the European Union at large.
THE FUTURE
Prospects for members of the profession who are not Scriveners (currently a total of around 800) are better now than they have been for a long time. Rising demand for their services results in an improvement of their income as notaries rather than as solicitors, with some 60 of them having already taken the decision to work as notaries-only. The first ever survey of the profession of notaries in England and Wales, which was commissioned in 2002 by the Notaries’ Society, clearly reflects this trend. It also shows that numbers are falling due to a significant retirement element, presenting the prospect of significant changes in the profession’s age and qualification profiles, as well as benefits in terms of experience and incomes for those remaining in the profession.
Two major challenges are facing the profession as a whole, one national, the other international.
First, there is the possible effect of the report by Sir David Clementi following his Review of the Regulatory Framework for Legal Services in England and Wales. The Clementi Report, submitted in December 2004, acknowledged that the notarial profession already distinguishes between regulatory and representative functions (a distinction lacking in the case of the Law Society), but proposes a transfer of regulatory powers from the Archbishop of Canterbury to an overarching Legal Services Board (LSB). Should the government decide to implement this proposal, this would spell not only the loss of the last symbol of notaries’ historical exclusivity, but may also bring about the end of their separate and distinct existence as a profession.
The second major challenge stems from the European Commission’s campaign to liberalise and harmonise the liberal professions within the European Union. While notaries in England and Wales, being already as liberalised as far as is possible, have themselves nothing directly to fear, their assessment of the situation differs markedly, depending on their own professional aspirations.
There are those who voice concern that a weakening of the status of civil-law notaries on the Continent could indirectly damage their status within England and Wales, and there are others intent on lobbying in Strasbourg and Brussels in favour of the abolition of monopolies enjoyed by notaries in EU civil-law jurisdictions, most specifically resulting from the nationality requirement imposed by many Member States.(4) It is unlikely that, in the short- and even mid-term, the bulk of notaries in England and Wales will find themselves personally and directly affected by these wider developments around them. What is likely to undergo significant change, however, is the shape and feel of the profession as a whole and its standing in the national and international communities of lawyers.
FOOTNOTES:
1. C. W. Brooks, R. H. Helmholz, P. G. Stein, Notaries Public in England and Wales since the Reformation, Norwich: Erskine Press, 1991; N. P. Ready (ed.), Brooke’s Notary, 11th ed., London: Sweet & Maxwell, 1992 (first ed. by Richard Brooke in 1839).
1. C. W. Brooks, R. H. Helmholz, P. G. Stein, Notaries Public in England and Wales since the Reformation, Norwich: Erskine Press, 1991; N. P. Ready (ed.), Brooke’s Notary, 11th ed., London: Sweet & Maxwell, 1992 (first ed. by Richard Brooke in 1839).
2. Gisela Shaw, ‘Notaries in England and Wales: modernising a profession frozen in time’, International Journal of the Legal Profession. Vol. 7, no. 2, 000, 141-155.
3. For a detailed account of the background to these changes, see Mark Kober-Smith, "Legal Lobbying. How to Make Your Voice Heard", London, Sydney: Cavendish Publishing, 2000.
4. Only Italy, Spain and Portugal promised to withdraw the nationality requirement to avoid being caught up in the formal warning issued by the EU Commission in November 2000. – Gisela Shaw, ‘The German notariat and the European challenge’, International Journal of the Legal Profession, vol. 10, no. 1, 2003, 37-54.
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http://www.lawsociety.ie/Gazette/May2000.pdf
Law Society Gazette (May 2000)
Brussels convention
Case C-260/97 Unibank A/S v Flemming G Christensen, judgment of 17 June 1999. In Denmark, written acknowledgements of indebtedness can be acted on in the same manner as a judgment, provided that they contain an express provision to that effect. Christensen, a Danish resident, had signed three such acknowledgements in favour of Unibank. The documents stated that they could be used as a basis for execution. The ECJ was asked whether an enforceable acknowledgement of indebtedness, drawn up without the involvement of a public authority, was an authentic instrument within the meaning of article 50. The court held that as the instruments under article 50 were enforced under the same conditions as judgments, the authentic nature of such instruments had to be established beyond dispute so that the court enforcing the instruments can rely on their authenticity. Instruments drawn up between private individuals are not inherently authentic. The involvement of a public authority or any other authority empowered for that purpose by the state of origin is necessary to endow them with the character of authentic instruments. The Jenard/Möler report on article 50 of the Lugano convention supports this interpretation. (p. 49)
Law Society Gazette (May 2000)
Brussels convention
Case C-260/97 Unibank A/S v Flemming G Christensen, judgment of 17 June 1999. In Denmark, written acknowledgements of indebtedness can be acted on in the same manner as a judgment, provided that they contain an express provision to that effect. Christensen, a Danish resident, had signed three such acknowledgements in favour of Unibank. The documents stated that they could be used as a basis for execution. The ECJ was asked whether an enforceable acknowledgement of indebtedness, drawn up without the involvement of a public authority, was an authentic instrument within the meaning of article 50. The court held that as the instruments under article 50 were enforced under the same conditions as judgments, the authentic nature of such instruments had to be established beyond dispute so that the court enforcing the instruments can rely on their authenticity. Instruments drawn up between private individuals are not inherently authentic. The involvement of a public authority or any other authority empowered for that purpose by the state of origin is necessary to endow them with the character of authentic instruments. The Jenard/Möler report on article 50 of the Lugano convention supports this interpretation. (p. 49)
