Access to the notarial profession

The freedom of movement rights emanating from EU citizenship are on the increase while the EU institutions seem to be intent on dismantling member states’ protectionist stance towards their own nationals. In a recent ruling, the European Court has shot down a wide interpretation given by a number of member states to an exception found in the TFEU Treaty which excludes activities connected with the exercise of official authority from the freedom of establishment. In its judgment, the Court affirmed that notaries cannot be considered as “exercising official authority” and hence member states must ensure that access to this profession is not restricted to their own nationals.

One of the cornerstones of the EU’s internal market is the freedom of establishment. In practice, this means that all EU nationals who establish themselves in a member state other than their home state, for the purpose of pursuing activities there as self-employed persons, ought to receive the same treatment as nationals of that state. However, EU law permits member states to exclude nationals of other member states from partaking in activities connected with the exercise of official authority.

Until this judgment, a number of member states availed themselves of this exception by barring nationals of other member states from exercising the notarial profession in their territory.

The European Commission concluded that such a practice as enshrined in the various national laws amounted to discrimination on the basis of nationality. It therefore proceeded to file infringement proceedings against those states which reserved access to the profession of notary to their own nationals. On their part, the member states concerned alleged that a notary is a public office-holder connected with the exercise of official authority whose activities are excluded from the rules on freedom of establishment.

The European Court of Justice went on to examine the powers of notaries in the member states concerned. It observed that the principal function of a notary, as a public official, is to authenticate legal instruments. The Court noted, however, that the instruments that are authenticated are documents and agreements freely entered into by the parties. The parties decide themselves, within the limits laid down by law, the extent of their rights and obligations and choose freely the conditions which they wish to be subject to when they present a document or agreement to the notary for authentication. The notary’s intervention therefore presupposes the prior existence of an agreement or consensus of the parties. Furthermore, the notary cannot unilaterally alter the agreement he is requested to authenticate without first obtaining the consent of the parties. The Court concluded that the activity of authentication entrusted to notaries does not involve a direct and specific connection with the exercise of official authority.

Furthermore, the Court went on to declare that the fact that the activity of notaries pursues an objective in the public interest – that of guaranteeing the lawfulness and legal certainty of documents entered into by individuals – is not, in itself, sufficient for that activity to be regarded as connected with the exercise of official authority. The Court remarked that activities carried out in the context of various other regulated professions frequently involve an obligation for the professionals concerned to pursue such an objective, without falling within the exercise of official authority.

The Court rejected in turn any argument that the probative force, the enforceability or the activity of authenticating instruments are in any way connected with the exercise of official authority. Furthermore, the Court observed that, within the geographical limits of their office, notaries compete with one another and this is not a characteristic of an activity involving the exercise of official authority. Notaries are also directly and personally liable to their clients for loss arising from any default in the exercise of their activities, unlike public authorities whose liability for default is assumed by the state.

In Malta, the notarial profession is regulated by the Notarial Profession and Notarial Archives Act which to date also imposes Maltese citizenship as a pre-condition for entry into the profession. In view of this ruling, such a condition now requires careful re-consideration.

This is indeed not the first time that this exemption was interpreted by the European Court of Justice. “Official authority” is not defined in the Treaty and therefore Member States have time and time again sought refuge in this exemption when seeking to restrict access to a particular profession in their territory ranging from the teaching profession, to that of lawyers and auditors.

However, the Court’s message to date has always been loud and clear, insisting that this exception must be interpreted restrictively and not utilised by member states in order to super-cede those perks emanating from living and working in a single market. The right of EU citizens to work and set up shop in any member state of their choice remains sacrosanct and as the ECJ’s rulings have proven over the years, the Court is prepared to shoot down any efforts on the part of member states to thwart such rights.

mariosa@vellacardona.com

Dr Vella Cardona is a practising lawyer and a freelance consultant in EU, intellectual property, consumer protection and competition law. She is also a member of the National Commission for the Promotion of Equality.