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Law Society Gazette – 9 February 2006

Notaries claim that their counterparts in France and Spain are flouting EU rules on open competition. plus, they face upheavals in the legal services white paper, reports Mark Smulian

What connects Henry VIII, the Clementi review and the Archbishop of Canterbury? How many languages can a scrivener speak? Where would you put an apostille?

The answer to all these mysteries lies with the notary, a lesser-known branch of the English legal profession that has hit the headlines recently as foreign notaries have tried to restrict the activities of their English counterparts.

Notaries are solicitors, and occasionally barristers, who have taken an additional qualification that allows them to validate documents for use in foreign transactions. Their role dates from Roman law, and in ancient times they were literate people who could 'note' laws, judgments and contracts.

At the Reformation, Henry VIII passed the job of appointing and regulating notaries to the Archbishop of Canterbury, and they remain regulated by the archbishop's Faculty Office.

As of 2004, there were approximately 900 public notaries in practice, of whom around 30 are scrivener notaries and 815 are general notaries who are also in practice as solicitors. From this year, a solicitor who wishes to become a notary must take a new diploma course in notarial law, Roman and civil law and private international law. Christopher Vaughan, secretary of the Notaries Society, explains: 'It is mainly a qualification sought by solicitors who deal with foreign transactions.

I am a commercial solicitor, but as a notary I work on buying and selling property abroad, certificates to form companies overseas, and occasionally adoptions.'

He gives the example of an English resident trying to buy a holiday home in Spain: 'They would appoint a lawyer there, and at some stage a notary would complete the transaction. But most people would want to grant a power of attorney. For that power to be valid in Spain, it would have to be notarised by a notary in England and legalised by the Foreign and Commonwealth Office.'

There is an elaborate procedure, under which a notary's seal and signature that the relevant documents are valid is certified by an 'apostille', issued by the Foreign Office, before being sent to a foreign jurisdiction.

The bulk of work arises in the EU, and disputes over this have recently broken out in France and Spain. English lawyers argue that regulators in both France and Spain are changing the rules to put foreign notaries at a disadvantage - despite EU rules on open competition.

According to Manuel Martin, a Spanish lawyer, English solicitor and English notary who runs London law firm Manuel Martin & Associates, Spain could face enforcement action by the European Commission over the issue.

He explains: 'For more than 100 years, foreign notaries have been able to lodge documents with Spanish land registries. There has been no change in the law, but the regulator has issued two resolutions binding on land registries that mean non-Spanish notaries cannot be used.

'They say foreign notaries are not professionally competent, that they do not have the same role as in Spain, and that the Spanish authorities would not receive taxes if foreign notaries were able to lodge documents. I would disagree with all of those points.'

Continental notaries often appear to earn large fees - some Spanish notaries are said to charge by the page and then use double spacing. However, French notaires double up as tax collectors on transactions and do not see all of the money themselves.

Mr Martin, who took the matter to the commission, says Spanish notaries are using arguments about official functions to protect their position from foreign competitors. David Anderson, a partner at London firm Sykes Anderson, has complained that French notaires operate a cartel.

He has founded the French Law Association for firms that advise British clients on French property purchases. But these transactions all need a notary to be completed. Mr Anderson says: 'An English notary cannot complete a conveyance in France, as you must be a French national. You are also not able to attend a notary training course if you are not French.

'These petty restrictions coming from lawyers whose ancestors brought us the concept of the Universal Rights of Man are a disgrace, both to their heritage and the valuable principles of the French Republic.'

English lawyers should, he argues, be able to present documents to the French land registry and conduct conveyancing in France. Mr Anderson also objects to the way the French government limits the number of notaries and sets the fees they charge, typically to 1% of a property transaction's value.

The justification cited for state control is that notaries collect tax, but Mr Anderson says: 'There is no reason why a solicitor should not collect stamp duty for the French government in the same way we do here.'

But there is some support for the French position from Bill Kennair, a partner in London notarial firm John Venn. He says: 'It is not in the interests of consumers for English solicitors to simply set up a name-plate on the Champs-Elysées, because the legal system in France is so totally different. There is nothing to stop them advising people abroad, but to purport to be the same as a French notary would be a great mistake.'

The fixed-fee system allows the cost of simple transactions, like a personal will, to be subsidised by larger ones. 'We don't have that at all. It is up to the market here, but there are arguments for and against,' he says.

Mr Kennair is a scrivener notary, a branch of the notarial profession that until 1999 held an ancient monopoly on all notarial work within three miles of the City of London. Scriveners take additional exams and must be able to work in at least two foreign languages.

A key player in the campaign to abolish the three-mile rule was Mark Kober-Smith, founder of London firm Kober-Smith & Associates. Having slain one monopoly, he too has foreign notaries in his sights. 'The paradox is that our documents are accepted in other countries, but we are not,' he says.

'We are internationally respected lawyers but we cannot work abroad. It is alleged that foreign notaries are public officials or in some cases civil servants. That is nonsense.'

One problem for English notaries is that their role is unclear to their foreign counterparts. That may change as a result of the Civil Procedure Rules (CPR), which proposed that notaries could record evidence, for example, in a neighbour boundary dispute. Notaries would acquire a role in the English law for the first time.

Mr Vaughan says: 'Foreign notaries ask us what powers we have, but we have not had any in England. The CPR say a document signed by a notary could be accepted as fact by a court. That is a huge leap forward for us, because otherwise it is difficult to explain what we do.'

Another change on the horizon for notaries is the Legal Services Bill, implementing the Clementi review of regulation. It will mean that any legal services that currently may only be provided by certain qualified members of the legal profession will be regulated by the proposed legal services board. These include notarial services, originally set out in the Public Notaries Act 1801, and so the Faculty Office will lose its role.

The reaction, however, suggests that one tampers at peril with a tradition stretching back more than 550 years. Mr Kennair says: 'Clementi was quite pleased with the notarial profession. But that said, it still an open issue. It is not correct to tinker lightly, as there is no problem and it works very well.'

Mr Vaughan notes: 'The status quo seems quite good and it would be important that someone on the legal services board had an understanding of what we do.'

Also on the horizon for notaries is the issue of authentication of on-line documents, which presents a difficulty because their profession depends so much on the personal presence of clients to establish that they are who they claim to be. The technology that might allow a notary to authenticate an on-line document with the same confidence as one that is on paper is five to ten years away, according to Mr Vaughan.

For notaries, the personal touch remains all important. As Mr Kober-Smith says: 'On-line is an issue, and I am a bit against it because there is nothing like meeting people. I don't have the technology to tell if an on-line document is authentic, but I do have the technology to know if I am shaking someone's hand.'

Mark Smulian is a freelance journalist