Because of the crucial role civil-law notaries (notarissen) play in our society, any mistake or negligence in their work can have far-reaching financial consequences. It is therefore vital that civil-law notaries have a solid safety net in the form of professional indemnity insurance. This insurance not only offers protection against the financial risks arising from possible liability claims, but also ensures that clients can be compensated without the continuity of the notarial practice being put at risk. The legal obligation to take out such insurance underlines the importance of financial stability and trust in the notarial profession, protecting the interests of both the notary and the client. This page describes the situation in the Netherlands.
Mistakes and liability of the civil-law notary
The basis for the professional liability of civil-law notaries can arise both from a breach of contract (wanprestatie) under a contract for services and from committing an unlawful act (tort) against third parties. The standard for assessing this liability is whether the notary has exercised the care of a reasonably competent and reasonably acting fellow professional. This standard, which applies both to breach of contract and to unlawful acts, includes compliance with the professional rules of conduct laid down by the professional organisation. The notary has a duty of care that includes duties to inform and warn, aimed at protecting the legal validity of notarial deeds and preventing abuse of legal ignorance. These duties require the notary to provide the parties with all relevant information and to warn them of specific risks associated with legal acts, with a view to both legal certainty and individual legal protection.
Civil and disciplinary liability of the civil-law notary
The liability of a civil-law notary can be disciplinary or civil in nature, depending on its nature and context. Disciplinary liability concerns the breach of the professional standards of conduct that notaries must observe. When a notary deviates from the standard of a reasonably acting and competent notary, this can lead to disciplinary measures. These measures can range from a reprimand to suspension or even removal from office. Civil liability, on the other hand, comes into the picture when the notary's act or omission causes damage that can be attributed to a breach of contract or an unlawful act, as defined in Article 6:162 of the Dutch Civil Code (Burgerlijk Wetboek, BW). In such cases the notary can be held liable and be required to compensate the damage.
The notary as contractor
As regards civil liability, account must be taken of the contractual relationship between the client and the contractor (the notary). The notary has undertaken to carry out certain tasks or assignments, and the client may assume that the notary will carry out these tasks properly. If this is not the case, the notary can be held liable on the basis of breach of these agreements. This is also known as the contractual liability of the notary and is part of civil liability. When assessing contractual liability, account must be taken of, among other things, the general terms and conditions the notary uses, because these terms can limit liability. However, not all general terms and conditions are automatically valid.
Breach of the duty of care and liability of the civil-law notary
The duty of care of a civil-law notary is a fundamental part of their professional responsibility. It extends not only to clients, but also to third parties who may be affected by their actions. This duty of care obliges notaries to act with the expertise, impartiality and independence that may be expected of a reasonably competent and reasonably acting fellow professional. The notarial duty of care includes, among other things, a duty to investigate, under which the notary must verify whether the requested acts are legally permissible and in accordance with the law or public order. In addition, there is a duty to inform, which requires the notary to ensure that all parties understand the content and consequences of the deed. It also means that the notary must carry out a check of intent, to make sure that the content of the deed actually corresponds to the will of those involved. A breach of this duty of care can lead to liability of the notary for any damage resulting from it.
Criterion: the reasonably acting and reasonably competent notary
The criterion of the reasonably acting and reasonably competent notary forms the core of the assessment of the notarial duty of care. This means that notaries are expected to exercise their office with a level of expertise, independence and care that is generally acceptable within the profession. This includes, among other things, adequately informing the parties involved about the legal implications of deeds, thoroughly investigating relevant facts and rights before a deed is executed, and ensuring that the will of the parties is correctly reflected in the deed. Failure to exercise this care can lead to both disciplinary and civil liability, with the emphasis on protecting the integrity of the notarial profession and the interests of everyone involved in a notarial deed.
Liability of the civil-law notary and own responsibility or contributory negligence
The liability of the notary is limited by the own responsibility of the interested parties. This means that the notary may rely on the insight and prior knowledge of the interested parties regarding the legal consequences of the legal acts included in the deed. This is particularly the case if these interested parties are experts in the field concerned. If a notary is dealing with two expert parties in the property sector, for example, he may assume more knowledge and expertise in property law than when it concerns two people working in the textile industry. In the latter case, the notary must be much more alert in fulfilling his duty to inform and warn. In short: the duty of care has its limits when the parties involved are deemed to have sufficient knowledge and insight themselves, or could and should have informed themselves.
In legal dealings, everyone bears their own responsibility, and this principle also has consequences for the division of liability and the attribution of compensation. When the damage is not only the result of an act or omission by, for example, a notary, but also partly arises from actions or omissions by the injured party itself, the obligation to pay compensation can be adjusted. This is laid down in Article 6:101(1) of the Dutch Civil Code, which states that compensation can be reduced if the damage was partly caused by a circumstance that can be attributed to the injured party. The division of the damage between the notary and the injured party is then determined on the basis of each party's contribution to the damage occurring, unless equity justifies a different division.
Applying this principle requires a causal link between the damage and both the act that leads to the notary's liability and a circumstance that can be attributed to the injured party. This means that without the injured party's share, the damage would not have occurred or would at least have been less serious. When assessing the circumstances attributable to the injured party, the degree of culpability or the seriousness of the mistakes made is not considered. These aspects can, however, play a part in applying any equity correction. This correction can mean that, despite the initial division based on causality, the final division of the damage is adjusted on the basis of what is considered fair.
Examples of liability of the civil-law notary
The role of the civil-law notary within the legal landscape is not only crucial, but also very varied. The liability of this professional can therefore come into play in a wide range of situations. Given the breadth of their work, notaries can be faced with complex questions about their responsibilities and the care expected of them. Various examples illustrate how the notary's liability can arise in different contexts. These examples prove the usefulness of good professional indemnity insurance for civil-law notaries.
Notary's liability for unpaid property transfer tax
The notary's liability for unpaid property transfer tax (overdrachtsbelasting) is a complex and topical issue within the notarial profession. Property transfer tax is payable on the acquisition of real estate in the Netherlands. Although the obligation to pay lies primarily with the acquirer, the notary can be held liable under certain circumstances. This is a consequence of the Tax Collection Act (Invorderingswet). This act provides that a notary involved in drawing up the deed of transfer can, under certain circumstances, be held liable if the property transfer tax is not paid, or not paid in full.
In practice, we see that the Dutch Tax and Customs Administration (Belastingdienst) is increasingly holding notaries liable. Case law shows, however, that courts take a critical look at this. Courts have already ruled on many occasions, for example, that the notary is not automatically liable for the property transfer tax if a valid claim to an exemption is made in the deed. Moreover, the notary is not expected to determine the property transfer tax due exactly. His responsibility is limited to assessing whether, on the basis of the facts presented in the deed, property transfer tax is payable or not.
Notary's liability for an overlooked will
A notary's liability can also arise when an earlier will is overlooked, with potentially far-reaching consequences for the distribution of an estate. When a notary advises the parties not to draw up a new will without thoroughly investigating earlier wills that have not been revoked, this can lead to unintended consequences. In such a scenario, where an earlier will is overlooked, the estate may, for example, unexpectedly go to a previous partner named in the earlier will instead of the current wife. This can result in legal proceedings in which the notary is held liable for breach of contract or an unlawful act for giving incorrect advice. What is crucial here is whether or not the notary asked about existing wills and whether this information was adequately documented. The burden of proof in principle lies with the claimant.
A notary's professional liability towards third parties
Under certain circumstances, a notary can also be liable towards persons who are not his direct clients, such as heirs or creditors. This can occur, for example, when a notary is involved in an inheritance matter in which the notary does not take into account the rights of certain heirs. Similarly, liability towards third parties can arise if a notary cooperates in changing the will of a person who is known to be suffering from dementia, with adverse consequences for the heirs. In addition, the notary can be held liable when he contributes to dubious property transactions that disadvantage creditors. This liability towards third parties is not based on a contractual relationship, but on the basis of an unlawful act (tort).
Notary's liability for inadequate explanations and failure to meet the duty to inform
The notary may be expected to inform the parties properly and, where necessary, warn them, especially with regard to important consequences of legal acts. This can occur, for example, when accepting or rejecting an inheritance, where the notary fails to inform the person adequately about the consequences of this choice. If the notary does not make detailed notes or does not explicitly point out significant consequences to the person concerned, such as debts becoming immediately due or the impact on the distribution of the estate, this can lead to considerable financial and legal disadvantages. In such cases, the chamber for notaries (notariskamer) may rule that the notary did not do enough to inform the parties and thereby breached his professional duty of care. This can result in disciplinary measures against the notary and possibly also in civil liability.
Notary's liability for not acting independently
Under Article 17 of the Notaries Act (Wet op het notarisambt, Wna), the notary must exercise his office independently. Unlike a lawyer, the notary does not work in the interest of one client, but must be impartial towards all parties involved. This also includes the parties with whom the notary has no relationship, the so-called third parties. If a notary does not act independently, this in principle constitutes a professional error. The notary can then be liable for the damage he or she causes.
Notary's liability for drafting errors
With drafting errors in wills or legal documents, the notary's liability can come into the picture, for example when essential clauses are missing or the document contains mistakes. As a result, it can happen, for example, that the execution of the testator's last will does not correspond to his or her actual intentions. In earlier proceedings, the focus was also on the notary's duty of care and the need for adequate file-keeping and advice on the possible legal consequences of testamentary dispositions.
Complaint about a civil-law notary
If you have a complaint about a civil-law notary, the first step is to discuss it directly with the notary concerned. If this does not lead to a satisfactory solution, the Royal Dutch Association of Civil-law Notaries (Koninklijke Notariële Beroepsorganisatie, KNB) offers the option of impartial mediation. You can submit the complaint to the KNB in writing. You can also turn to the Disputes Committee for Notaries (Geschillencommissie notariaat). For complaints that cannot be resolved through mediation, it is possible to submit the complaint to one of the four Chambers for Notaries (Kamers voor het notariaat). This is then a disciplinary procedure; no ruling is given on compensation. For that, you must turn to the civil court.
Taking action on a complaint about a civil-law notaryBurden of proof when holding a civil-law notary liable
When holding a notary liable for professional errors, the division of the burden of assertion and the burden of proof plays a crucial role. The main rule is that the burden of proving that a professional error was made rests on the shoulders of the injured party. This means that when a claim is based on breach of contract (Article 6:74 BW) or an unlawful act (Article 6:162 BW), the claimant must show that the notary did indeed fall short. There are, however, exceptions to this main rule, such as situations in which reasonableness and fairness justify a different division of the burden of proof. The notary may then face an increased duty to state reasons (verzwaarde motiveringsplicht), under which he is expected to provide sufficient factual information to justify his actions.
Legal expenses insurance for a complaint about a civil-law notary
Legal expenses insurance can offer essential support when you have a complaint about a notary or when you want to obtain compensation if a notary has made a mistake. It does this by providing cover for the costs of legal assistance. The extent to which you are insured for this specific situation, however, depends very much on the details of the policy. Insurance policies vary in the extent of cover they offer. It is therefore a good idea to read the policy conditions carefully or to contact the insurer directly to check whether this situation is covered.
Compulsory professional indemnity insurance for civil-law notaries
Civil-law notaries are required to take out professional indemnity insurance (Ondernemersplein). A number of requirements also apply to this insurance. For example, the insurance must cover losses of up to €25 million and must be taken out with an "insurance company of good repute". The insurance must also continue to provide cover if the notary is suspended, and the cover must amount to at least €50 million per insurance year. A very important provision is that no excess may apply to protocol insureds (protocolverzekerden). If the current insurance does not meet these requirements, it is advisable to switch to a different professional indemnity insurance policy.
Read also: Professional indemnity insurance for financial advisers.
Frequently asked questions about the liability of civil-law notaries
The role of the civil-law notary in the legal landscape is very important. Notaries have the privilege of formalising and authenticating legal acts. This important role brings great responsibilities. And with them, great liability risks. The notary's acts or omissions can simply have important financial and legal consequences. It is only natural that this raises questions. This FAQ answers them.
How is the notary's liability regulated in the sale of real estate?
In the sale of real estate, the notary plays a central role in drawing up and executing the deeds. The notary must ensure that all legal and procedural requirements are correctly complied with. This also includes informing buyers and sellers about their rights and obligations and, where necessary, warning them of the consequences of certain decisions or actions. If the notary makes a mistake that leads to financial loss, he can be held liable for this damage.
Is a civil-law notary required to be insured for liability?
Yes, under the Notaries Act, civil-law notaries are required to take out professional indemnity insurance. This insurance covers the financial consequences of possible liability claims against the notary.
What is the contractual liability of the civil-law notary?
The contractual liability of the notary refers to the obligations and potential liability arising from a contract for services between the notary and his client. If the notary fails to perform this contract, for example through mistakes in the documents drawn up or by not correctly carrying out the requested services, the notary can be held liable for any damage the client suffers as a result.
What is the civil liability of the civil-law notary?
The civil liability of the notary covers both contractual and non-contractual (unlawful act) liability. This means that the notary can be held liable not only for damage arising from a contractual relationship with a client, but also for damage caused by his acts or omissions outside such a contractual relationship.
What is the civil-law notary's duty of care?
The notary's duty of care is a fundamental principle that requires the notary to act with the necessary care, expertise and integrity in carrying out his tasks. This means that the notary must provide correct and complete information to all parties involved, must warn of possible risks and legal consequences of certain actions, and must ensure that the documents he draws up are legally correct.