JURIST Guest Columnist Angelique Devaux argues that the valuable role played by French notaries should not be altered to create what the European Commission would deem to be a more competitive environment...
e have all heard the phrase, "Rome wasn't built in a day." The same can easily be said about Europe and its harmonization of certain legal processes across country borders. The European Union (EU) attempts to assure the free movement of people, goods and services across the borders of member states, but there is one service that has yet to freely cross borders: the notaries of Europe
What role does a notary play? From an American perspective, the word-to-word translation of notaire (French), notar (German), notario (Spanish) or notaio (Italian) refers to the notary public, who, in a common law system, serves the public in non-contentious matters and authenticates documents or signatures. The role of a notary has existed in many latin countries since the Middle Ages.
The notaries of Europe are licensed attorneys in the civil law system with a high level of legal education. For example, in France, seven years of legal education are required before one can become appointed as a notaire by the Minister of Justice. Notaries may operate in every area of law, including: family law, property law, asset law, countryside law, etc. In 2012, France had more than nine thousand notaries [PDF], who, over the course of just one year, advised over twenty million clients and drafted more than four million legal documents.
The French notaire is a public officer acting on behalf of the state; however, he or she is simultaneously a self-employed professional, whose services cost nothing for the state. Notary fees charged to clients are determined according to an official national scale, with only ten percent of the entire fee actually being paid to the notaire. Approximately eighty percent of the fee charged by the notaire goes to state and local authorities as taxes, and the final ten percent is used to pay for various expenses.
But what potential changes are French notaires facing in the shifting European landscape?
In Europe, notary services are fundamental in an internal market. In 2000, the Lisbon European Council announced its goal created a more dynamic and competitive Europe, by reducing tariff barriers between European countries among other things. The idea of liberalization of certain regulated professions in order to echo the need of an economic growth and job creation was also a growing discussion.
One proposition of Directive 2006 by the European Parliament had already mentioned the liberalization of the notarial activities, but a strong lobbying by the profession ultimately excluded it from the scope of the directive. Europe denounces the monopoly of the notaries, as well as the condition of access to the profession, both of which are considered to not be competitive.
In 2011, after many years of turmoil, the Court of Justice of the European Union finally came to a decision in European Commission v. French Republic by ruling that "a member state whose legislation imposes a nationality requirement for access to the profession of notary fails to fulfill its obligations under Article 43 EC, where the activities entrusted to notaries within the legal order of that member state are not connected with the exercise of official authority within the meaning of the first paragraph of Article 45 EC." It has been determined that notarial activities are in the field of competition. So now, notaries do not need to be of the nationality of the state in which they practice, and a European citizen who holds the necessary degree requirements can be appointed as a notaire in France.
Since this determination by Court of Justice of the European Union, French institutions (including past ministers of justice) have not conceded to the European wishes and have supported the notaires who maintain their monopoly. In May, however, the European Commission revived the debate and expressly called upon the French government [PDF] to "[t]ake action to enhance competition in services; remove unjustified restrictions in the access to and exercise of professional services, notably regarding legal form, shareholding structure, quotas and territorial restrictions; take action to simplify [authorizations] for the opening of trade outlets and to remove the ban of sales at a loss." The commission wants to strengthen the competitiveness of services by acting upon regulated professions, such as notaries, through the banishment of quotas and others legal restrictions.
The European Commission, however, is wrong in stubbornly insisting on its position. First of all, the commission incorrectly states that there is a quota on the number of notaries that may exist in the territory. Each year, the French government actually continues to create new notaires positions to aid with competition.
The European Commission also accuses the French notaires of holding territorial restrictions. In fact, the imposed network does not constitute a restriction, but rather an obligation for law offices to be located all over France. If this were not the case, certain regions would suffer from a lack of lawyers, as younger lawyers prefer to be situated in cities, and therefore, the duty of providing equal access to law would not be satisfied.
The notaries' regulated tariff is also said to not be competitive. The function of the notaries' tariff plays a major role in the equality of treatment all over the territory, and it ensures a security for the state because it is the notaries who collect these taxes (such as, inheritance tax, transfer of property tax, gift tax, etc.). The deregulation of the tariff would only provide an advantage to the big law firms, which is a total contradiction to the goal of providing equal access to the law.
Finally, the monopoly's loss will clearly not boost the economy individuals will always continue to have the same needs, such as purchasing property or transferring estates. The client will lose out on the ability to have a privileged relationship with the notary that is based on confidence and trust. With the loss of the monopoly, a standardized client-relationship adapted to mass production will create a two-tier justice system the large law offices will answer to the wealthiest clients, while a low level of service will be offered to the less fortunate, and money will become the universal language.
The French notaire is not a profession protected by its monopoly. Instead, it is a profession that protects individuals through its duty to serve the community and to ensure the legal security of contracts. For that reason, a uniform and homogenous vision of the profession will deny the French notaires the ability to answer to the ever-changing needs of clients.
French notaires will continue to be needed "sûrement et pour longtemps" (For sure and for a long time).
Angelique Devaux is a French Licensed Attorney (Notaire) and a L.L.M graduate from IUPUI Robert H. McKinney School of Law.
Suggested citation: Angelique Devaux Is the Role of the French Notary in Danger?, JURIST - Sidebar, July 16, 2013, http://jurist.org/sidebar/2013/07/angelique-devaux-french-notaire.php.
This article was prepared for publication by Theresa Donovan, an Assistant Editor with JURIST's Professional Commentary Service. Please direct any questions or comments to her at email@example.com