Power to authenticate signatures in documents for variation of real property rights may be reserved to notaries

Ms Leopoldine Gertraud Piringer, who owns of a half share in a property situated in Austria, signed, in the Czech Republic, a request for entry in the Austrian land register of the planned sale of her share in that property. Her signature on that request was authenticated by a Czech lawyer in accordance with Czech law. Czech law permits lawyers to perform such a certification.

Ms Piringer submitted the request for entry to the Bezirksgericht Freistadt (Freistadt District court, Austria). That court refused her request on the ground that, contrary to the requirements of Austrian law, her signature had not been authenticated by a court or a notary.

Hearing an appeal on a point of law (Revision), the Oberster Gerichtshof (Supreme court, Austria) asked the Court of Justice whether the Directive on the freedom of lawyers to provide services, and Article 56 TFEU on the freedom to provide services, allow a member state to reserve to notaries the power to authenticate signatures appended to the documents necessary for the creation or transfer of rights to real property and thus to exclude the possibility of recognising in that member state such authentication carried out by a lawyer established in another member state.

In its judgment, the court found that the directive is capable of applying in circumstances such as those of the case at issue given that its conditions of application, set out in article 1(1) thereof, are satisfied in the case.

In the first place, the notion of “lawyer’s activity” within the meaning of that provision covers not only the legal services typically provided by lawyers, such as legal advice or representing and defending a client in court, but may also cover other kinds of services, such as the authentication of signatures.

In the second place, a lawyer’s activity consisting in authenticating a signature is subject to the rules on the freedom to provide services since the freedom conferred by article 56 TFEU on member state nationals includes the “passive” freedom to provide services, namely the freedom for recipients of services to travel to another member state in order to receive a service there, without being hindered by restrictions.

However, the court noted that the question posed by the Oberster Gerichtshof relates specifically to the interpretation of the second subparagraph of article 1(1) of Directive 77/249, which authorises a derogation from the freedom of lawyers to provide services by providing that member states have the option of reserving to “prescribed categories of lawyers” the preparation of formal documents for, inter alia, creating or transferring rights to real property.

In that regard, the court found that that derogation does not cover, in general terms, the various categories of legal professions, with the result that member states would have the right, relying on that provision, to limit the pursuit of the activity of drafting formal documents for the creation or transfer of rights to property to certain categories of legal professionals — such as notaries — and thus to prohibit foreign lawyers from exercising the activities in question within the territory of those member states.

The court found, by contrast, that that provision provides for a derogation with a more limited scope aimed specifically at certain prescribed categories of lawyers, which are, moreover, explicitly identified in article 1(2) of the directive itself.

In those circumstances, the court concluded that the derogation introduced by the second subparagraph of Article 1(1) of the directive did not apply in the circumstances of the case at issue.

The court went on to consider whether the Austrian legislation restricts freedom to provide services and whether it is justified.