Notary Public
1. Term
The term notary public/civil law notary describes members of the notarial profession which is today publicly organized.
2. Origins
Only the word ‘notary’ is derived from the Latin notarius, who—due to the notes (abbreviations) he used—was deemed to be nothing but a kind of stenographer. The first professional origins of the notary public lay with the Roman tabelliones, who—organized in guilds and supervised by the state—drafted documents for other people. Their records enjoyed special trust.
3. History
The history of the notarial profession begins with the imperial notaries under Frederick I Barbarossa, the papal notaries under Alexander III, and the municipal notaries in Bologna, Florence and Verona. Canon law gave notaries the power to produce documents endowed with public faith, ie documents with special probative value. In the 13th century, Italian documents were granted legal enforceability, but notaries were not yet lawyers; at the universities of northern Italy professors of the ars notaria belonged to the Faculty of Fine Arts. As part of the ecclesiastical jurisdiction the notarial profession spread to France and, from there, to the countries north of the Alps.
In southern France a notarial system similar to the one in Italy was introduced as early as the 12th century. In northern France, on the other hand, legal transactions (juridical act) were initially completed in front of the courts; later the relevant documents were drafted by notaries but sealed by the judges. From the 15th century onwards, several reforms brought about a harmonization of notarial practices in northern and southern France. After the French Revolution a decree issued by the national assembly in 1791 resulted in the complete unification of the French notarial system. A notary public’s office could no longer be bought or inherited, and selection tests were introduced. After the introduction of the Code civil, which regards notarial deeds (authentic acts, actes authentiques) as the supreme means of written evidence and requires notarial deeds for many important transactions in the areas of law relating to the family, mortgages, donations, succession and corporations, the 1791 decree was replaced by the well-known notary public act, dated 25 ventôse XI (16 March 1803). This act, in essence, is still in force today and has—even after the downfall of the Napoleonic Empire—influenced the notarial systems in large parts of Europe (especially the Netherlands, Belgium, Italy, Austria, Poland, Russia, parts of Switzerland, Bavaria, the Rhineland and Hamburg).
With the spread of Roman law, ecclesiastical and imperial notaries were also introduced in England. Beginning in 1279 the Archbishop of Canterbury appointed notaries, initially with permission of the Pope or, alternatively, the Emperor, and from 1533 onwards with permission of the English Crown. Their importance declined with the increasing role of the common law, which largely replaced Roman law. This is because under the common law the notarial deed has no greater probative value than a sealed private document (sealed deed). Further, under English law there are no legal transactions that require notarial recording, nor are there enforceable instruments. Until the Access to Justice Act of 1999 England maintained a formal division of the notary system: in the City of London and a radius of three miles around it approximately 25 highly specialized, full-time scrivener notaries possessed a monopoly for notarial deeds regarding business and international legal transactions. Outside of London there were only a few solicitors who recorded some notarial deeds. They provided no legal advice and were barely qualified general notaries. In 1999 the monopoly of the London notaries was abolished, while their right to educate their successors in a practical training lasting several years had already been repealed in 1998. Nevertheless, the Worshipful Company of Scriveners of the City of London, which had been founded in 1373, continues to train general notaries in order to become qualified scrivener notaries.
In the German states the notarial profession emerged in various regional forms. During the Renaissance the previously high reputation of the notaries in the Holy Roman Empire declined due to many grievances. In particular, these resulted from the abuse of the right to appoint notaries by the Hofpfalzgrafen (palatinal counts), to whom the Emperor had delegated his power of appointment. This led to a framework-regulation for the whole empire: at first, very briefly, in the Reichskammergerichtsordnung (the Act regulating the Imperial Chamber Court) of 1495 and then, much more extensively, in the Reichsnotariatsordnung (the Act regulating the Office of Notary throughout the Empire of 1512 (Emperor Maximilian I), in which principles of good practice were laid down. The essential of its elements is still valid today.
Since the imperial estates only approved the Reichsnotariatsordnung, but did not sign it, it could only unify the law to a very limited extent. As a consequence, a large number of regional notarial regulations were enacted until the dissolution of the empire in 1806. It was not before 1937—and without significant influence of national socialist ideas—that the 15 German notarial systems were broadly unified by the Reichsnotarordnung. It was the last institution relating to the administration of justice in Germany to be unified. Even today this statute is in significant parts still in force as the Bundesnotarordnung (Federal Act on the Notarial Profession).
Austria also had to go a long way until the unification of its notarial profession. In the territories governed by Napoleon the French notarial system was in force from 1810 to 1815. In 1850 a notarial regulation was implemented in the Austrian heartland, which, while it gave notaries only limited competences in drawing up notarial deeds and did not endow their notarial acts with enforceability, assigned to them important functions particularly in estate matters (this was only optional, at first). In non-contentious proceedings they acted as court commissioners on behalf of the courts with regard to the so-called Verlassenschaftsabhandlung (probate affairs). Revisions of the notarial rules, in particular the version of 25 July 1871, still in essential points in force today, enhanced their competences. Gradually, these rules were applied to almost all areas of the Habsburg monarchy. Further, they served as a model for the Hungarian Act on the Notarial Profession of 1874.
In the Scandinavian countries to some extent an ecclesiastical notary existed in the Middle Ages. However, the significance of this institution declined with the Reformation, as the ius commune was not received. As far as Scandinavian laws require a certain form for legal transactions at all, in addition to the written form, two witnesses, a judicial record, or the signature of boni homines are sufficient. The title notarius publicus that exists in all Scandinavian countries does not stand for an independent profession, but rather describes an auxiliary function of judges for the authentication of signatures, primarily for international use, which is performed without the additional provision of legal advice.
In the socialist countries independent notaries were abolished and replaced by Soviet-style notaries public. The activity of notaries and the subject matter of their practice were comprehensively controlled. Following the fall of the Iron Curtain an independent notarial profession was introduced in all of these states according to western (especially German, French and Austrian) models. Today, these notaries enjoy a significant degree of self-government.
4. Overview of the forms of the notarial profession
The historical development has led to three distinct branches in respect of the notarial profession in Europe: (a) the areas of the so-called civil law notaries (or Latin notaries), which subscribe to the concept of advisory preventive administration of justice. In these systems notaries therefore form a distinctive professional group whose professional rules and tasks may vary from country to country but are still essentially similar; (b) the jurisdictions of the common law. Although there are also full- or part-time notaries their domestic tasks are very limited as the concept of preventive administration of justice has a much narrower scope and does not rely on notaries. They are therefore not comparable to the civil law notaries (with the exception of scrivener notaries in London for international legal transactions); (c) the Scandinavian legal systems in which the notarius publicus has virtually no domestic duties, and the term describes only an additional function of judges as a certification body for international legal transactions.
This division into three areas has significantly hindered the European harmonization of laws not only regarding the notarial rules of conduct and the law of notarial deeds, but also regarding formal requirements for legal transactions.
In the countries of the Latin notarial system the notarial profession is mostly exercised as an independent full-time occupation. In parts of Germany and some cantons of Switzerland, notarial activities are exercised part-time by specially licensed attorneys as so-called ‘attorney-notaries’ (Anwaltsnotare). The reason for this lies in Prussian history. The economically ailing judicial commissioners were entrusted with the activities of notaries as an additional source of revenue. ‘Attorney-notaries’ are subject to the same professional rules as ‘single-profession notaries’. In a few areas notaries are state-employed, either as civil servants (as currently in Württemberg: Bezirksnotare) or as former judges with a state salary (as in eastern Switzerland and currently still in Baden: Amtsnotare).
5. Characteristics of the Latin notarial system
The Latin notarial system has the following important characteristics. The notary holds a public office and is independent and impartial. He is responsible for the certification of signatures and the notarial recording of legal transactions which are subject to such formal requirements according to the national legal systems (significantly differing from each other in this respect). Such requirements exist particularly in the areas of real estate law, corporate law, commercial law, family law, the law of succession, and for powers of attorney. In addition, a multitude of other tasks of ‘preventive administration of justice’ can be assigned to them by national law or voluntarily by the parties, such as the taking of oaths, submissions to immediate enforcement, protests concerning bills of exchange, certifications of facts, fiduciary tasks, estate settlements, land register affairs, mediation and conciliation regarding property law adjustments in the former GDR.
Civil law notaries are lawyers who are prepared for their profession by a specialized training that is organized differently from country to country. They have to go through an appointment procedure which places very high demands on their legal skills and personal integrity. Their number is limited in most countries to no more than required. In most countries civil law notaries had, until recently, to be citizens of that country, just like judges. In order to strengthen their independence they are appointed for life, ie mostly until retirement age. Civil law notaries have their own rules of conduct and law of notarial deeds. They are organized in chambers and are subject to judicial supervision.
When notarial deeds are drawn up, notaries are obliged to clarify the facts advanced as well as the intentions of the parties. Unlike attorneys who are obliged to be partial, they have to advise and warn the parties neutrally and impartially, ie aiming at a legally balanced outcome (see § 17 German Notarial Recording Act (Beurkundungsgesetz)). Subsequently they have to record the parties’ intentions unambiguously in a deed (notarial deed, notarial act, acte authentique). The deed is read out to the parties, approved and signed by them, signed by the notary, and finally sealed. The notaries have to point out hazards and risks so that inexperienced and less skilled parties are not disadvantaged. Through these proceedings of ‘preventive administration of justice’ disputes between the parties are largely avoided and a high degree of consumer protection is achieved.
Civil law notaries are subject to a professional duty of confidentiality obligation and to unlimited liability for any damage caused through their errors. Therefore they must have professional liability insurance. As holders of a public office, notaries may (and must) refuse their activities only in cases provided for by statute. Unless they are state-employed, they generally receive fees defined by statute, often related to the value of the transaction. The citizens are, however, free in their choice of notary.
In the Latin notarial system deeds enjoy a far higher probative value than private documents. This is a consequence of the strict rules of notarial conduct and the law of notarial deeds. Notarial deeds are considered to be correct and authentic until the contrary is proven.
For particularly important legal transactions the national legislatures have often established the requirement of a notarial deed or of a certification. In case of a certification the notary only certifies the authenticity of the signature (see § 40 German Beurkundungsgesetz). Notarial acts are usually a prerequisite for legal relationships and changes to be registered in a state-run register, such as the land or commercial register, so that one can rely on the contents of these registers, which often even enjoy public faith. Civil law notaries are therefore part of the so-called Freiwillige Gerichtsbarkeit (non-contentious jurisdiction). The transmission of notarial documents to the register is carried out electronically in many countries—in some countries only by this means—after personal electronic signature by the notary.
By means of subjection to immediate enforcement the civil law notary can issue an immediately enforceable instrument, saving the parties costly and time-consuming legal proceedings in undisputed cases. Such instruments can be used throughout the European Union, ie even outside of the Latin notary system because of Art 57 Brussels I Regulation (Reg 44/2001), Art 25 of Reg 805/2004 creating a European Enforcement Order for Uncontested Claims, Art 46 Brussels IIbis Regulation (Reg 2201/2003) and Art 48 of the Maintenance Regulation (Reg 4/ 2009).
6. Legal harmonization
To date there has been no harmonization by the EU regarding the notarial rules of conduct. This is because—until the recent ECJ cases C-47/08, C-50/08, C-51/08, C-52/08, C-53/08, C-54/08 and C-61/08—the countries where the Latin notarial system prevails considered the activities of notaries to be a direct and specific participation in the exercise of public power in the sense of Art 51 TFEU/45 EC.
Between the European notaries there is nevertheless an intensive academic and professional legal cooperation, organized mainly through the Conseil des Notariats de l’Union Européenne (CNUE), within the framework of the global Internationale Union des Notariats (UINL), and by the Institut de Recherches et d’Études Notariales Européen (IRENE). Regular international conferences, the journal Notarius International, as well as numerous scholarly publications may also be mentioned. Uniform global principles of conduct for notaries (code de déontologie notariale) were developed and adopted by the UINL as soft-law instruments. Further, the CNUE has established a European code of conduct for notaries.
7. Infringement proceedings
The European Commission did not consider the exception of Art 51 TFEU/45 EC to apply to notaries in spite of their role as part of the ‘preventive administration of justice’. Thus, it had initiated infringement proceedings against eight countries of the Latin notarial system for violation of the freedom of establishment (Art 49 TFEU/43 EC) on account of the requirement of nationality and/or because of the non-implementation of the former Diploma Recognition Directive 89/48/ EEC, now Directive 2005/36 on the Recognition of Professional Qualifications (Commission v Belgium C-47/08; Commission v France C-50/08; Commission v Luxemburg C-51/08; Commission v Portugal C-52/08; Commission v Austria C 53/08; Commission v Germany C-54/08; Commission v Greece C-61/08 and Commission v Netherlands C-157/09).
The Commission argued, with the support of the British Government as intervener, that the restriction of the notarial profession to a given state’s own nationals is not necessary because the notary only participates to a small extent, if at all, in the exercise of the public power of the state. It considered a state’s requirement of a specifically nationally determined confidence, which it attributes only to its own citizens, as being justified under EU law only in cases of a direct and specific participation in the exercise of public power, as with judges and law enforcement bodies. The Commission saw no need to distinguish between the various activities of the notaries (deeds, the issuance of enforcement clauses, etc), since none of these activities is in its view directly and specifically connected to the exercise of public power. Even issuing an enforcement clause relating to an enforceable deed is only regarded as a preparatory activity, as public power will only be exercised by the competent enforcement bodies.
The countries following the Latin notarial system—whether sued directly or joining as interveners—argued that Art 51 TFEU/45 EC fully applies to notarial activities. Therefore, neither the former Diploma Recognition Directive nor the Directive on the Recognition of Professional Qualifications had to be implemented. These countries considered the Commission to be concerned not merely with the requirement of nationality, but with remoulding fundamentally the concept of preventive administration of justice and with it the notarial system of the 21 Member States where the latter prevails and with transforming the notariate from a profession which is related to the administration of justice to a market-oriented one.
Further, the countries of the Latin notarial system argued that the recording of notarial deeds is directly and specifically connected with the exercise of public power, since contracts which have to be notarized can only be concluded with the involvement of a notary whose procedural tasks are subject to detailed regulation, and since the notarial deed binds the deciding judge to a large extent concerning his evaluation of evidence. In Germany, for example, the deed fully proves the act documented by the notary (§§ 415, 418 ZPO). It was, inter alia, also pointed out that an enforcement clause issued by a notary creates an immediately enforceable instrument, just like an enforcement clause appended to a judgment makes the claim enforceable through state enforcement bodies that are, in principle, not allowed further to review the existence of the claim. Civil law notaries and their recordings of notarial deeds thus have been organized as a state activity similar to the office of a judge. The classification of their activities as an act of state has emerged historically in all of continental Europe since Napoleon and is also required by public international law, because the effects of a notarial deed are—subject to agreements of recognition—limited to the jurisdiction of the state of its origin (principle of territoriality). Notaries may not operate abroad and, particularly, may not establish documents there, which is indirectly shown by Art 5 (lit f) of the Vienna Convention of 24 April 1963 on Consular Relations.
The Advocate General accepted in his opinion on six of the cases (C-47/08, C-50/08, C-51/08, C-53/08, C-54/08 und C-61/08) that the notarial core activity of authentication is ‘an activity which is connected directly and specifically with the exercise of official authority, since it gives a special status to documents, provisions and forms of conduct that would otherwise have no more legal value than the expression of a private will’ (para 121). But he continued that the nationality clause ‘is disproportionate in so far as it is not necessary in order to achieve the aims pursued by each Member State in removing the activities of notaries from the scope of the freedom of establishment’ (para 146). On this ground he concluded a breach of Arts 43 and 45 EC. However, the Advocate General did not discern an infringement for lack of implementation of Directive 2005/36.
The ECJ first emphasized that the actions concern solely the nationality condition for the access to the profession and do not relate to the organization of the notarial profession as such. Then, the Court took an extremely narrow position and ruled that, although a public official, a notary’s principal function of authenticating legal instruments is not directly and specifically connected with the exercise of official authority within the meaning of the EC Treaty, as these instruments (documents and agreements) are freely entered into by the parties. Therefore, the ECJ declared, that the nationality condition for notaries is in view of Art 43 EC prohibited.
However, the ECJ rejected the pleas of infringement for lack of implementation of Dirs 89/48 and 2005/36 as in view of the particular circumstances of the legislative procedure and the situation of uncertainty which resulted, there did not exist a sufficiently clear obligation for Member States to transpose these directives with respect to the profession of notary.
Further, the ECJ in an obiter dictum pointed out that ‘the fact that notarial activities pursue objectives in the public interest, in particular to guarantee the lawfulness and legal certainty of documents entered into by individuals, constitutes an overriding reason in the public interest capable of justifying restrictions of Article 43 EC deriving from the particular features of the activities of notaries, such as the restrictions which derive from the procedures by which they are appointed, the limitation of their numbers and their territorial jurisdiction, or the rules governing their remuneration, independence, disqualification from other offices and protection against removal, provided that those restrictions enable those objectives to be attained and are necessary for that purpose’ (C-47/08 para 97, C-50/08 para 87, C-51/08 para 97, C-53/08 para 96, C-54/08 para 98, C-61/08 para 89).
Literature
Ferdinand Oesterley, Das deutsche Notariat, vols I–II (1842–45) (reprinted 1965); Jürgen Basedow, ‘Zwischen Amt und Wettbewerb—Perspektiven des Notariats in Europa’ (1991) 55 RabelsZ 409; Benito Arruñada, ‘The Economics of Notaries’ (1996) 3 European Journal of Competition Law and Economics 5; Nigel Ready, Brooke’s Notary (12th edn, 2002); Gisela Shaw, ‘Notaries in England and Wales: What Future in a Climate of Globalisation?’ (2006) Notarius International 38; Roger van den Bergh and Yves Montagnie, ‘Competition in Professional Markets, Are Latin Notaries Different?’ [2006] Journal of Competition Law and Economics 189; Bundesnotarkammer, Ausschuss Notariatsgeschichte (ed), Bibliographie zur Geschichte des deutschen Notariats (2007) <www. notariatsgeschichte.de>; Alfonso Renteria (ed), Manuel de Droit Privé et de Justice Préventive en Europe (2007); Stephan Matyk and others, Notaries in Europe (2007); Mathias Schmoeckel and Werner Schubert (eds), Handbuch zur Geschichte des Notariats der europäischen Traditionen (2009); Andreas Schmitz-Vornmoor and Guido Kordel, ‘Vorsorge durch den Notar, Vertragsfreiheit und Verhaltensökonomik: Eine verhaltensökonomische Analyse der präventiven Rechtsberatung und -kontrolle durch den Notar’ [2009] notar 4.
