NMa inquiry: room for stepping up competition among civil law notaries

The Netherlands Competition Authority (NMa) has examined the professional code of conduct put forward by the Royal Dutch Notarial Society [Koninklijke Notariële Beroepsorganisatie (KNB)] for possible restrictions to competition and releases its findings today. The KNB has previously indicated that it will consult its members on the removal of a number of rules. These include the prohibition on pursuing potential clients. René Jansen, Member of the Board of the NMa: 'The plans proposed by the KNB may yield benefits to clients. Our inquiry brought forth that there are further rules which also pose potential restrictions to competition. I trust that the KNB will also address these concerns. In doing so, the professional association may apply our proposals for removing risks to competition. In 2009 we will examine the extent to which the KNB has acted upon our findings.'

The KNB is to consult its members on scrapping mandatory 'objective advertising' and removing the prohibition on directly pursuing clients. The KNB will also propose abandoning the aim to base mutual relations among civil law notaries on the principles of courtesy and trust, as well as removing the prohibition on listing outside activities.

Further professional regulation and codes of conduct, classified by the NMa as 'possibly unnecessarily restrictive to competition', include the prohibition on results-based remuneration. The concept of results-based remuneration may be interpreted more widely than intended and limits civil law notaries in establishing a pricing policy, while clients consider price to be an important criterion for choice. Also, the concept of provision and the recommendation not to work below cost price are in need of clarification.

Benefits to clients, resulting from adjustments to the rules of conduct for civil law notaries, may consist of improved supply transparency, more options for choice and, possibly, enhancement of the price/quality ratio. Civil law notaries are expected better to profile themselves individually and will be given more opportunities for mutual collaboration and third-party outsourcing.

In 2004 the NMa commenced its examination of self-regulation among architects, accountants, lawyers and civil law notaries. The inquiry aimed at identifying possible risks to competition on the basis of the Competition Act. In 2006 the professional associations BNA and BNSP modified self-regulation following an NMa examination. Furthermore, accountants are busy revising self-regulatory provisions, also on the basis of new regulation. On 23 October 2006, the NMa released a consultation document on self-regulation among the legal profession. Reactions to the consultation are currently being reviewed. The final report 'Analysis of the Liberal Professions: Civil Law Notaries' ['Eindverslag Inventarisatie vrije beroepen: notariaat'] (available in Dutch only) and information about other inquiries is available on www.acm.nl.