Insurance Principle on the Land Registration System of England and Iran

Document Type : Original Article

Authors

• Abbas Mirshekari ¹
• Jamshid Zargari ²

¹ Assistant Professor of Private Law Department, University of Tehran, Tehran, Iran

² MA. In Notary Law, Faculty of Registration and Judicial Management, University of Judicial Sciences and Administrative Services

Abstract

Highlights

Insurance Principle on

the Land Registration System of England and Iran

Extensive Abstract:

Land registration system is the most important mean for providing Legal Security of land titles which has caused them to be protected by law. The security of registered Land Titles is of two types, legal and economic. Legal security is the result of the principles of mirror and curtain. Legal security has made the registration information irrevocable so that it is not possible to dispute against such information in the future. However, it is always possible that legal security of registered Land Titles is lost by incorrect registration information. In this position, it is the turn of Economic Security which is a secondary rule during legal security in the land registration system. In this case, it means if the legal security of the registered property is revoked and if a person is damaged by it, the damage will be compensated by using economic security.

Various registration systems have been trying to find a way to make the compensation of the mentioned persons easier and guaranteed, to prevent the loss of public trust in the registration system by repairing the damage. As a result of this effort, a mechanism was established which in the Australian registration system is the Insurance fund, and in the UK registration system, it is referred to as the Insurance principle or Indemnity Scheme. According to the mechanism of the Insurance principle, a person who buys a land title on the basis of registered information and then, by proving the error of this information, claim compensation from the government, without the difficulties of the general rules of civil liability.

The findings of this study show that the Insurance principle mechanism was first established by Sir Robert Torrens (1814 – 1884) with enacting Torrens Title on Immovable Property Act 1858 in South Australia, called Insurance Fund. Then, nearly four decades later, with enacting Land Transfer Act 1897, this mechanism was first adopted in the UK land registration system as Indemnity Scheme, but nearly half a century later, Insurance principle was extended by the Doctrine of British Land Law, especially Sir Theodore Ruoff and this was introduced as one of the basic principles of the land registration system which can make the registration system more efficient. This principle has been emphasized by the British legislature in the land registration acts 1925 to 2002.

Although in the land registration acts of England, nature of the Insurance principle has never been defined, but by using the definitions made in the land registration doctrine of this country, it can be said that "the Insurance principle is a mechanism based on law that according to this, if persons with good faith are damaged as a result of incorrect registration information, the government will be obliged to compensate all the damage of person mentioned". It should be noted that the responsibility of the government in this position is not the final responsibility but the government, after compensating the damaged party, can refer to the person who caused the damage and demand a refund. For enforcing the Insurance principle, first, there must was reflected something wrong about Land in the registration information. In addition, according to the said registration information, financial loss will be incurred to a person with good faith, i.e. a person who did not play a role intentionally or erroneously in the realization of incorrect registration information and was not aware of it. Finally, there must be a causal relationship between damage to the person and incorrect registration information. By fulfilling the mentioned conditions, the government is obliged to fully compensate the damage caused by the confiscation of land titles. The government is also obliged to reimburse all costs incurred by the damaged party in demanding main compensation under certain conditions.

From a theoretical point of view, insurance principle is based on gaining public trust in the registration system. In fact, if a person is damaged as a result of incorrect registration information and is asked to seek compensation in accordance with the general rules of civil liability, in addition to the difficulty of proving the elements of civil liability, especially the element of fault, there is no guarantee for him to receive compensation. These two problems ultimately lead to public distrust of the efficiency of the registration system. Therefore, insurance principle, based on gaining public trust in the registration system, wants 1) to facilitate the proof of the elements of civil liability by removing the element of fault regarding the damage caused by incorrect registration information, Because in the basics of civil liability, this principle is based on the risk theory. One of the positive aspects of accepting the risk theory instead of the fault theory is the elimination of the difficulty of proving the element of civil liability in the field of sovereignty exercises; 2) and also to guarantee its compensation, prevents the registration system from being considered inefficient and gain public trust in the registration system.

However, the Iranian land registration system, like the UK registration system, is based on conditions that have caused legal security of land titles is good quality. Nonetheless, although the legislator was explicitly aware of the possibility of deterioration of legal security due to incorrect registration information, the legislator wasn't inclined to accept insurance principle in the Iranian land registration system and basically it can be said that the issue of economic security and its provision in the Iranian registration system is a strange topic. The outstanding efforts of Iranian legislators for normalizing this issue with other mechanisms have also faced serious shortcomings and are unable to ensure the economic security of registered land titles. As a result, damaged party will have no choice but to invoke the general rules of civil liability. Naturally, these rules, due to the "difficulty in proving the elements of civil liability" and the "lack of adequate financial support", make it difficult to compensate and has caused public distrust in the registration system and its efficiency. Therefore, in this article, it was suggested that the provisions of insurance principle be accepted in the Iranian registration system during the acceptance of legal security.

Keywords

• Insurance Principle
• Economic security
• Government civil liability
• United Kingdom Registration system
• Iran registration system

Main Subjects

• Other topics