The role of the Civil Law Notary
in electronic contracts

Ugo BECHINI, Michele NASTRI
2004 UINL Congress, Mexico City
Italian National Report - Abstract

In the course of 2002, the Italian Notarial Organization set up its own
infrastructure for digital signatures, and the National Council acts as a
Certification Authority. The operational handbook or Certification Practice
Statement, is attached hereto. The goal was to make available a system,
entirely controlled by the profession, that would ensure achievement of at
least two goals that a commercial certification body would not be capable of
achieving.

First of all certainty that the signature device is actually delivered to
the notary holder of such device. It is self-evident that the admirable
technological features of digital signatures are of no help, in terms of the
certainty of juridical relations, unless there are absolutely no doubts that
the signature device is firmly in the hands of the holder.  In the case of
the Certification Authority of the Italian Notarial Organization, the device
(in our case a smart card) is physically handed over by the President of the
District Notary Council to the notaries, each of whom he knows personally.

The second goal achieved by our system is that the signature is immediately
associated with notarial functions. The National Notary Council certifies
only notaries who are in office; if a notary has been suspended or loses for
any reason his office, the signature is immediately revoked by the District
President. This arrangement has a double value in that, from the political
standpoint, the principle is asserted according to which, also in the
Information Technology area, only the professional bodies are authorized to
certify, erga omnes, who is a notary and who is not. And from the
operational standpoint, this enables anyone, all over the world, to
automatically check and immediately find out whether a document is a
notarial document or not. Anyone can access the site
(http://ca.notariato.it) which is available in four languages, to make this
check; and if the response is affirmative there is an inherent certainty
that the document comes from a notary who is in office. This enables the
notarial digital document to freely circulate, with full juridical value, in
the public sphere, also in the international arena, and activate forms of
automatic data transmission with the Public Administrations.  Ad hoc
software can be used to check the signature automatically, and hence perform
the formalities required (cadastral registration, registration of mortgages,
registration of companies) without human intervention. Similar procedures on
the one hand reinforce the role of notaries, because they attribute the
function of sole judge of the lawfulness, correctness and consistency of the
data to be entered into the Public Registers, and on the other hand, by
relieving the Public Administration from enormous workloads, they are of
political interest at a time when cutting back public expenditure is a major
imperative.  They strengthen the position of the Italian notaries also in
the medium and long-term because notaries take on a public function that can
hardly be attributed to other categories and which could be taken back by
the Public Administration only on pain of an increase in its expenditures.
And, last but not least, these accomplishments are the end result of
profitable and lasting relations that the Italian Notaries have entertained
with the high-tech industry, with which forms of cooperation have been
established that ensure and develop the interoperability of IT systems in
full respect for regulatory requirements.

At the present time the Italian Notaries affixes some three million digital
signatures every year.  All notaries were endowed with a signature system
between October 2002 and early 2003.  The rapidity with which this
profession adopted the most advanced IT solutions has contributed greatly to
the image of the Italian notaries, which unlike the past is now capable of
keeping pace with the times and of providing society and the economy with
the timely and reliable services that they need.

All the deeds relative to companies (establishment, winding up, changes) are
forwarded in telematic form to the Register of Companies.  The speed
afforded by IT media is at its best when, as in the case of the Italian
system, notaries are attributed the exclusive power to control the
lawfulness of company deeds. The notary may therefore receive the deed and
forward it to the office for being published without any intermediate
waiting time. The procedure still envisages a manual revision by an
official, but it is not at all infrequent that approval, especially in the
smaller and less busy offices, is received on the same day on which the deed
is forwarded.  The role of the notarial profession, which in this field is
that of guarantor, and at one and the same time that of ensuring juridical
certainty and speed of execution, is hence markedly reinforced.

Evidence of this was given on the occasion of the recent reform of Italian
company law, which entered into force on January 1, 2004; in the light of
the results obtained there was general consensus on preserving exclusive
powers that notaries have in the issuing of company-related deeds.

The situation is more complex when it comes to real estate deeds.  In this
field computerization has not yet been completed because, unlike the
notaries, the Italian judicial offices are not yet ready to issue their
deeds, that require being published, in digital form (rulings on the
ownership of real estate, orders on the seizure of property, and so on), and
the Administration does not want to face the complications involved in the
parallel management of two interrelated documentary systems. And moreover,
the problems related to the preservation of digital documents has not yet
been fully solved, which are extremely delicate in the real estate field
where it is not rare that a document must be accessible, and with full
juridical value, even after many decades. While cadastral registration (and
the relevant payment of duties) and the transfer deeds are fully
computerized, the Land Registries continue to receive a paper copy of each
deed alongside the digital document.

The real estate procedure, called Adempimento Unico (Single Fulfilment),
consists in transmitting an XML type of file which contains fields for all
the data of the deed that are instrumental for the subsequent steps of the
procedure, and also the full text of the deed in natural language. An
example is attached to this paper. The notary draws up a single XML file and
forwards it to all the public Authorities involved: ad hoc softwares search
the files for the data that are of interest and they consequently update the
databases. The notary does not need to produce different forms for the
individual documents required: it is the deed that is produced in digital
form once and for all in accordance with a layout agreed upon by the notary
and the Authorities involved. The applications of this technique are then
virtually unlimited. At this very moment in Italy experiments are being made
with the transmission of data relative to property transfers to the
Municipal Administrations. This occurs without any additional work for the
notary because the data are retrieved automatically from the single XML
file; in any case the profession receives a small but not insignificant
recognition in terms of image and services it offers to the citizens since
the latter no longer need to comply with the duty of reporting the purchase
or transfer of property to the Municipality since all this is done
automatically.

In addition, the XML format is a standard in the public arena, and its
files, as can be seen from the example attached hereto, are easy to read
even in the source format, while this is impossible for most of the other
formats. A doc type file, which is typical of Microsoft Word, is for
instance substantially inaccessible without the relevant software. Not only:
inside the formats owned by individual companies, as occurs with the doc
format, the producers conceal in a way that is not always visible for the
average user, a series of data like the original author of a given text, the
changes made subsequently, and so on. Additional problems are posed by the
so-called dynamic fields. Anyone who signs a file of the proprietary type
runs the risk of signing unaware (and of spreading) information that he has
not examined and of which he potentially knows nothing, something which is
absolutely incompatible with the role and function of the notary. It is
furthermore unacceptable that documents of public interest be stored in a
format which is fully accessible only by having recourse to the products of
a given U.S. company, without any guarantee that such products may be
available in the future and for all the platforms.

The choice of formats therefore, is not at all purely and simply a technical
choice: indeed it has huge political and juridical implications. The problem
may be perceived as insignificant so long as automation and word processing
systems are used only to produce documents in the traditional form: if only
paper has the fidefaciente (i.e. that constitutes full evidence) function,
from the juridical point of view there is little interest in knowing what
happens inside our computers. But when it is the file that becomes
fidefaciente, having direct access to that file, at the present time and at
all times in the future, and being able to check its contents with absolute
certainty, is a strategic need for notaries.

What is in the making, therefore, is a system which, as a whole, makes the
notarial profession the true operator of digital documents in an integrated
area of interoperable technologies and applications. Some tesseras are still
missing for the picture to be complete. What will the next steps be?

First of all the adoption of document storage systems that ensure that the
digital document will exist in time and above all that it will at all times
be usable and authentic. The approach taken by the notarial profession to
this issue is, as always, twofold:



§         on the one hand the approach to the regulations, which are still
in their developmental stage and therefore abound with gaps and antinomies;
this is due to the fact that measures on the conservation of digital
documents have been issued not to regulate a phenomenon which is under way
but to anticipate what was to happen;



§         on the other hand the examination of practical experiences and of
the technologies available for conservation, and their development in a way
that is consistent with the regulatory, sectoral and general context.



It is clear that the availability of document conservation systems that will
guarantee full juridical validity of digital documents produced by notaries,
or produced with their contribution, and made available to the community,
will be instrumental in enhancing the role of notaries in society and in the
relationships with the Public Administration. This commitment is already
being implemented and it is expected to be fully completed in the near
future.

Secondly the use of digital documents in international relations and in
particular with the notarial bodies of the UINL (International Union of
Latin Notaries).

The adoption of a standardized signature infrastructure by the notarial
bodies of the UINL will facilitate the international circulation of the
digital documents produced by notaries. Once the signature has been checked
and found to be certified by a UINL notary, there is certainty that the
document comes from a notary of Latin background and who fully performs his
functions and is hence in a position to implement the juridical efficacy
inherent in his office: at that point there are no obstacles in line of
principle against that document being accepted at the international level.

However difficulties may arise on two fronts at least, and in several cases
the notaries of the individual Countries may very likely have to take action
to promote  legislative integration. The first difficulty concerns foreign
documents which are attributed full juridical value only if they contain a
legalization or an apostille, a formality for which a digital equivalent has
not yet been found. The second difficulty consists in the problem of
transferring the document that arrives in digital form from abroad onto a
paper medium: indeed, in various legal systems, a power of attorney needs to
be attached to the deed to be stipulated.  The notary will have to claim a
central role in the latter case, as guarantor of the correct drafting of the
digital document and produce paper formats that are to be valid for all
intents and purposes. As professional par excellence of the production of
deeds, the notary may undoubtedly present himself as figure of reference for
all those cases in which a transition is required from the paper document to
the digital document and vice versa and where the resulting document must
have full juridical value.

In a nutshell: digital signature and IT documentation are not a danger for
the notary of Latin background but rather are an opportunity. At the
national level they make it possible to draw up faster and more efficient
procedures around the role and the figure of the notary, enabling an
immediate perception of the contribution that this profession offers to the
companies and economies of the Countries in which they operate.  At the
international level, they are an excellent means for the production of
documents that can be transferred instantly through telematics, without
losing the juridical value of the notarial document of the Latin type. In
both cases the adoption of the most advanced technologies is an excellent
confutation towards those who, for their own interest, depict the Latin
notary profession as an organizational model that is less suited than its
competitors to meeting the needs of our contemporary world.