Alberto Perez Cedillo takes an in-depth view on the impact of the coronavirus pandemic on the practice of international private client

Alberto Perez Cedillo

The coronavirus (COVID-19) pandemic has transformed our world socially, technologically, and demographically, leaving no aspect of the global economy unaffected. The ongoing turbulence requires unprecedented agility from international private client practitioners to keep up with the fast-moving changes necessitated by the pandemic.

In this article, I consider some of the new and urgent legal problems this crisis has generated and the measures designed to combat them, in particular the way in which the profession is rushing headlong into new, virtual ways of execution of documents and other legal procedures, upturning traditional formalities and requirements that seemed unassailable.

Tax residency

COVID-19 is raising many tax issues, especially where there are cross-border elements – for example, cross-border workers, or individuals who are stranded somewhere that is not their country of residence due to restrictions on movement.

These issues have an impact on the right to tax between countries, which is currently governed by international tax treaty rules that delineate taxing rights. In fact, the Organisation for Economic Co-operation and Development (OECD) recognised the issue early on, and it has made recommendations to its members to ensure a level playing field. HM Revenue & Customs (HMRC) amended its guidance on the statutory residence test to confirm that days spent in the UK will be disregarded under the exceptional circumstances exemption. Similarly, the Irish Revenue indicated that COVID-19 restrictions could be included under the rubric of force majeure.

The French authorities have clarified that, in their view, a temporary stay in France, due to confinement or travel restrictions, is not likely to result in an individual acquiring a tax residency in France. Australia has also published guidance stating that where a person who is not an Australian resident for tax purposes is in the country temporarily for some weeks or months because of COVID-19, they will not become an Australian resident for tax purposes. The Internal Revenue Service (IRS) in the US has created a new exclusion: the “COVID-19 medical condition”.

Deep impact: earth seen from space


Germany, meanwhile, has endeavoured to reach a temporary understanding with neighbouring countries that cross-border commuters are to be treated during this period as though they have pursued their work as usual at their actual place of work; agreements have already been made with Luxembourg, the Netherlands, Austria, Belgium, France and Switzerland. Not all countries are being quite as accommodating. In Spain, for instance, the General Directorate of Taxes has maintained that the period of total lockdown will be counted in determining fiscal residence.

In conclusion, we advise our clients that, despite the best efforts of the OECD, there is no universal rule and, even when tax authorities seem to be accommodating, in practice there will be a need for records to demonstrate each individual case, with different standards of proof required in different countries.

Estate planning

The COVID-19 crisis has naturally resulted in more people wanting to write wills, but has also created substantial barriers to the normal in-person processes of making them, especially for those shielding, self-isolating or stranded due to travel restrictions. Here, we need to draw attention to those jurisdictions which are beginning to allow “electronic wills”, which can be signed digitally with no use of paper, pen or ink, and those where wills can be witnessed remotely via audio-visual link, but the will itself must be signed using wet (ink) signatures.

In England and Wales, the lord chancellor has temporarily amended the Wills Act 1837 to allow the witnessing of wills to take place via “videoconferencing or other visual transmission”, such as Skype or Zoom.

These reforms came into force on 28 September and will be backdated to 31 January 2020, the date of the first confirmed COVID-19 case in the UK. This means that any will witnessed by audio-visual link from that date onwards will be legally accepted, providing the quality of the sound and video was sufficient to hear and see what was happening at the time. The measures will remain in place until 31 January 2022, although the Ministry of Justice has said the measures can be shortened or extended, if deemed necessary.

According to government guidance, video-witnessed wills should remain a last resort, and people must continue to arrange physical witnessing of wills where it is safe to do so.

We also recommend you look at the Law Society guidance on the use of virtual execution and e-signatures during the pandemic, plus updated practice notes on execution of documents by virtual means and execution of a document using an electronic signature.

The Australian states and territories have responded in different ways. Victoria, which suffered one of the worst outbreaks, has permitted wills to be signed and witnessed electronically. The Australian Capital Territory (ACT) has passed legislation temporarily allowing wills to be witnessed remotely via audiovisual link. In New Zealand, under temporary legislation, wills can be witnessed using audio-visual link. In Canada, some jurisdictions, such as Ontario, Alberta and British Columbia, have introduced temporary emergency rules that allow for the virtual witnessing of wills in certain circumstances. Some American states are allowing electronic wills, such as Florida, Nevada and Indiana.

In continental Europe, on the other hand, the electronic revolution has not taken place. Testators in most countries whose legal systems are not based on English common law can already make wills without the presence of witnesses. These are known as holographic (“whole-written”) wills. In contrast to a notarial will, which must be acknowledged by the testator and witnesses before a notary public, a holographic will should be handwritten by the testator (not typed) and signed, with the signature following the text. This process doesn’t require witnesses at all, or the involvement of a legal professional (although this is, of course, still recommended).

As a result of COVID-19 restrictions, there has been a substantial increase in the use of holographic wills in Spain. In order to be valid, the holographic will must be written out in full and signed by the testator, with expression of the year, month and day on which it is made; foreigners may make a holographic will in their own language. Holographic wills are also valid in Switzerland, France, Germany, Italy and Austria and, as in Spain, will usually have to be written out entirely by hand. In Denmark and Norway, holographic wills are only permitted as “emergency testaments” (nødtestamente).

Practitioners should be prepared for these changes and begin to adapt accordingly. The most obvious way forward is developing an internal electronic will policy and procedure in compliance with the specific requirements that apply in the jurisdiction in which the will is to be witnessed. If witnesses and testator are signing in different jurisdictions, we will be in uncharted territory, as the “place of execution”, which often sets up the formal requirements for validity, may no longer exist – obviously, international practitioners will want to avoid such situations.

Planning for loss of capacity

Mental capacity remains a point of difficulty for professionals. Mental health legislation varies widely across the world.

In the UK, electronic signatures cannot currently be used to complete a lasting power of attorney (LPA), and practitioners are advised to follow government guidance on social distancing to ensure that they satisfy requirements when signing and witnessing an LPA. No relaxation in the rules on LPA execution has been proposed, and no changes have been made to the Mental Capacity Act 2005, or the Court of Protection Rules 2017 and accompanying practice directions. Due to COVID-19 restrictions, the registration of LPAs may take longer than usual.

In most European countries, powers of attorney traditionally have ceased to have effect upon the incapacity of the donor. Generally, the judicial procedure to declare someone incapacitated requires a medical certificate declaring that person’s (in)capacity to manage their own affairs, to allow the national court to issue a judgment specifying the degree to which the person’s legal capacity is to be restricted. A subsequent judgment provides any necessary protective measures and for the appointment of an official guardian.

Different jurisdictions are moving at different rates, depending on the relative impact of COVID-19 and their attitude to electronic security

In civil countries where the intervention of the court is required, similar provisions to those introduced by HMCTS regarding telephone and video hearings have been adopted. Accordingly, no hearings which require people to attend are to take place, unless there is a genuine urgency and it is not possible to conduct a remote hearing.

Over the past few decades many countries of the civil law tradition, including Germany and France, have followed common law practice and introduced enduring powers of attorney (EPAs) to unburden the courts. Italy have not yet introduced EPAs.

Where LPAs or their equivalent are required at this time, it will be especially difficult to find a witness, or to engage the services of a notary public or public official, since in most of continental Europe, notaries are only providing restricted services, limited to urgent matters that must be put in writing at the time the appointment is requested.

The witnessing of signatures via video link has not been allowed, and only France has authorised virtual procedures by notaries, although they are restricted to specific areas such as transfer of property. The signed and witnessed power of attorney must then be legalised with the Apostille of the Hague. If the country where the power of attorney was granted is a contracting party to the 1961 Hague Convention, the legalisative procedure is simple. The apostille is attached by the Foreign Office or equivalent ministry, to confirm that the person who witnessed the signature is recognised as an official of that country. A power of attorney executed in the UK will always require the apostille to be attached by the Foreign and Commonwealth Office in London, which has been operating a reduced service – delays are likely in obtaining the apostille.

Attention should be given to the Hague Convention 35 of 13 January 2000 on the International Protection of Adults, which allows for the mutual recognition of documents appointing someone to look after you if you lose mental capacity. Within a Convention country, it is possible to obtain a certificate of mutual recognition, which will be recognised in other Convention countries. In the UK, it has only been ratified in Scotland, meaning it does not apply in England and Wales, or Northern Ireland.

However, in the “new normal”, concessions to the facilitation of remote signatures and remote witnessing have been made all over the world, and this applies to the making of powers of attorney. In Canada, Victoria and Ontario have enabled EPAs to be signed and witnessed electronically; similar legislation now exists in provinces of Australia, where the ACT has passed the ACT Law, which temporarily enables powers of attorney and EPAs to be witnessed remotely via audio-visual link. Durable powers of attorney in Israel can be made via separate video conferences between the attorney and the donor, and with the agent – provided the legal capacity, as well as the donor’s wishes and the lack of undue influence, can be confirmed.

The main conclusion to draw is that, once again, different jurisdictions are moving at different rates, depending on the relative impact of COVID-19 and their attitude to electronic security. However, the question of capacity raises special questions about the protection of an increasing number of people becoming vulnerable due to age and the public health emergency.

Estate administration

During this pandemic, many probate courts around the world are allowing documents to be filed electronically.

If the will needs to go through probate, you may be able to start the court process now. Check whether this can be done in your local area. HM Courts & Tribunals Service (HMCTS) has issued new standard application forms for practitioners and is promoting the use of online applications. The new application forms do not require witnessing or swearing in front of a solicitor or commissioner for oaths. When paper application forms are used, the probate registry will accept electronic signatures, including typed signatures. Statements of truth can be used in all non-contentious probate processes and will usually require supporting affidavit evidence.

There is a lot do as part of administering an estate, despite the current pandemic. In Europe, notaries as public officers have a key role in the administration of estates, and their presence is vital to authenticate deeds with their seal and signature, officially witnessing the wishes expressed by the beneficiaries. This is the case in Spain, France and Italy, where notaries have a monopoly in executing estate administration deeds.

Extreme caution should be exercised to avoid fines for late filing

As a result of the COVID-19 crisis and the inability to attend notaries’ offices in person, the administration of estates is currently subject to significant delays. Many US states have introduced statutes to allow remote notarisation or remote witnessing on an emergency basis. Given that laws are rapidly changing in the US, a summary of the current legal landscape (including links to the relevant statutes) is available on the American College of Trust and Estate Counsel website.

As to tax filing, taxpayers globally are being supported economically through tax payment deferrals. Several European governments have announced suspensions of tax payments or assessments, including France, Germany, Ireland, Italy, the Netherlands and Spain. In South American countries, numerous filing deadlines have been extended, as have the payment deadlines for personal income tax. In Australia, both at the federal and state level, significant financial support has been given to businesses and individuals. The US IRS has also taken significant steps, postponing filing and payment deadlines for virtually every type of tax.

Inheritance tax, however, is not always included in the payment deferrals. Extreme caution should be exercised to avoid fines for late filing, taking into account that delays may be experienced when engaging third parties such as notaries, witnesses and surveyors.

A new way of working

With all these changes, there is an incredible amount for practitioners to adjust to, and governments are adapting their advice and guidelines on a weekly basis, as the impact of COVID-19 continues to change and develop.

The enforced transition to digitalised working practices has highlighted some deficiencies, but it has also led to the legal industry evolving at speed to meet the needs of clients. The pandemic is not over, and the measures we are taking to defend ourselves continue to change and evolve – more restrictive at times, more relaxed at others. As we don’t know what stage the pandemic is at, it is still far too early to make confident predictions about the long-term impact on international private law practitioners. Will the “new normal” become simply the normal, or will it be something we look back upon as a temporary (albeit year-long) suspension of norms, like the three-day week or, if you are a Spaniard of my generation, the distantly recalled regime of General Franco?

Either way, few think there will be a simple and straightforward return to the old ways of working. The measures designed to combat and mitigate the spread of COVID-19 have certainly led to a swift and drastic change in working practices, and the lessons we have learned from these new experiences cannot be unlearned. In particular, where those necessary measures have been going with the grain of modern technological developments and seem simply to have accelerated an already slow-moving evolution, it seems hard to believe that we will revert to old formalities.

To put it another way, the longer we continue successfully with remote execution and absent witnessing, the harder it will be to argue that they are fundamentally insecure.

In many countries, the most hidebound institutions have moved with admirable and surprising agility. What might have begun under the pressure of dire necessity and force majeure may continue in the interests of convenience, accessibility and economy.

On the other hand, as cybercrime becomes ever more sophisticated, even the most secure-seeming technology cannot provide the peace of mind that comes with a three-dimensional presence, a warm handshake and a wet signature. And while relationships with long-standing clients might be conveniently maintained over long distances, establishing those relationships of trust in the first place is much more difficult in a virtual world.

Most importantly, it would be something of a miracle if the measures adopted, suddenly and without preparation, proved to be so robust that they did not need some substantial rejigging in the future. It would be certainly very disappointing if measures designed to protect those most at risk from COVID-19 left those who were already vulnerable with fewer protections.