Competition in professional services markets: Are Latin notaries different?

Competition in markets for services offered by Latin notaries may not work properly because of information asymmetries and the need to guarantee an optimal supply of public goods. In Europe, there have been two test cases allowing for an assessment of the effects of liberalization: the abolishment of the solicitors' monopoly for conveyancing services in England and Wales and the deregulation of the Dutch notary profession. Both cases show that deregulation does not guarantee lower prices. Moreover, the Dutch experience shows that there is a justified concern that competition may decrease quality and jeopardize the notary's integrity. For these reasons, regulation may be justified as long as effective instruments to control and monitor quality are not (yet) in place. Since legal certainty has characteristics of a public good, competition also tends to increase the number of disputes on the legal validity of documents certifying legal transactions. A comparison of the tasks of a Latin notary and those of an American notary public provides reasons to fear that, after deregulation, protection against legally invalid transactions may be available only at higher prices. Finally, the Dutch experience shows that fee regulations remain necessary to guarantee the accessibility of notarial services.

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