It is helpful to look at the principal systems of notarisation which exist throughout the world. Businessmen can come across these different systems and concepts in their trade. It can be confusing as a notary in America is completely different to a notary public in Hong Kong or other common law systems.
By common law systems, I mean those jurisdictions which broadly are based upon English law. In Asia, these would be Singapore and Malaysia. Australia, Canada and New Zealand are very important common law jurisdictions and they also have a similar system of notarisation to Hong Kong. Completely differently, there is also the civil law system or, as some people sometimes describe it, the Latin system of notarisation. The distinction between the two is largely historical and arises from the divergences between continental civil law Europe and the English common law system. These distinctions have spread across the world in the sense that Commonwealth countries, or most of them, follow the common law system with notaries public. The Latin system can cover continental Europe, South America and parts of Asia. I believe that there are 68 countries which follow the civil system of notarisation. A little explanation of the differences is needed.
Common Law Notaries Public
Common law notaries public are qualified lawyers admitted to practice in their jurisdiction. However, in Hong Kong, notarial service is not the same as the practice of law. Generally, common law notaries public are appointed by a government authority, perhaps a court or by a regulating regulatory body which is often known as a society or faculty of notaries public. In Hong Kong the profession is administered by the Hong Kong Society of Notaries.
Notaries Public in the USA and Canada
This situation should be contrasted with America where notaries public are not lawyers but laypersons (that is to say, normal people!) who provide officially required services. A notary public in the United States and large areas of Canada can only act in a far more limited way than those of civil-law or common law notaries. The numbers are not regulated which means that the United States has far more notaries public than any other country. According to latest figures that I have, there are 4.5 million notaries public in America as against 714 in England and Wales and approximately 1,250 in Australia and New Zealand. In Hong Kong, as at 31 March 2018, there were 372 notaries public in Hong Kong. You must remember that, unlike the US, a notary public in common law jurisdictions also has to be a practising lawyer.
Civil Law Notaries
What is the role of the notary in civil law jurisdictions? Such notaries have a much greater role. Civil law notaries are practising lawyers and holders of public office who carry out transactional work which would be done in common law countries by solicitors. The qualifications required in civil law countries are much greater, requiring an undergraduate law degree, a graduate degree in notarial law and practice together with three or more years of practical training or if you like, an internship under an experienced notary. They must then sit a national examination to practice.
Civil law notaries have jurisdiction over a large part of civil private law in areas of property and family law. However, the extent to which the notarial profession monopolises practice areas depends upon the country. In France, for example, the law gives notaries a monopoly over their reserved areas of practice. In France and Italy, as in much of continental Europe, valuable assets such as houses and companies cannot change ownership without a notary’s approval. In Germany, a notary has to read all transaction documents out loud in front of the concerned parties before he or she will allow them to sign.
I recall doing a ship mortgage over a Russian flag vessel which, according to Russian law needed the involvement of a notary. As befits the greater role involved, the Russian notary would charge a percentage of the total transaction fee which can be very substantial. I remember that, in this particular case, it amounted to hundreds of thousands of US dollars. In Hong Kong, fees are modest by comparison and are not based on a percentage value of the transaction concerned. This method is similar in other common law jurisdictions as well.
In next month’s issue, we will explore the history of the Hong Kong notarial system.