Make your mark: when electronic signatures are as valid as paper one

The Law Commission has, albeit provisionally, concluded that electronic signatures are as valid as paper ones in certain circumstances in a recently published Consultation report.

As part of its current Programme of Law Reform, the Commission (which was established to ensure that the law is as fair, modern and as cost-effective as possible) is considering electronic signatures with the aim of addressing uncertainties in the area.  The Commission’s intention is to ensure that the law is sufficiently certain and fit for purpose in a modern society.  It is worth noting that the Law Commission’s work does not extend to registrable property transactions, since the Land Registry is currently working on a separate project regarding electronic conveyancing.

Uncertainty currently exists because the law in this country does not expressly state that electronic signatures will be valid.  The difficulties are compounded by the additional requirements for the execution of deeds, which require witnessing.

However, the Commission has concluded that “an electronic signature is capable of satisfying a statutory requirement for a signature under the current law, where there is an intention to authenticate the document”.  The Commission considers that a change of the law is not required but that an industry working group should be established in order to investigate the practical and technical issues of electronic signatures.

Where signatures require witnessing (such as in the case of deeds), the Commission proposes that an electronic signature can be observed when the witness is physically present, and that this should also be the case for a witness via video link, although the Commission’s conclusion is that in the latter case a change to the law would be required for this to be established.

In light of suggestions from some that the requirement for a witness should be dispensed with in the case of electronic deeds, the Commission’s conclusion that witnessing fulfils an important evidential function which should not be dispensed with is to be welcomed.   
These and other matters such as the use of electronic signing platforms and the concept of “electronic acknowledgement” as a replacement for witnessing are outlined further in the Commission’s consultation paper.

Whilst it is clear that the use of electronic signatures would improve the efficiency of document signing and allow for even faster commercial transactions, which can be of benefit, it will be of utmost importance that the safeguards that “wet ink” signatures and traditional witnessing provide are not lost.  We will be following the developments of this area of law with keen interest.

 

For further information or advice please contact

Chris Sharpe
020 7324 1752
Click here to email Chris

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