Electronic signatures are 'signatures' in-deed
In a consultation paper released last week (for a digestible summary, see here) the Law Commission provisionally concluded that:
an electronic signature can meet a statutory requirement for a document to be "signed" (so long as the signatory actually intends to authenticate the document by adding their signature to it electronically); and
the legal formalities required for a deed[1] fulfil an important evidential function and are capable of being met electronically where a witness is physically present to watch the signatory apply their signature.
The Law Commission are inviting views on their analysis and provisional proposals contained in the consultation paper, including on:
their provisional conclusion that no legislative reform is needed to clarify the legality of electronic signatures;
appetite for bringing a test case to seek an authoritative court ruling on the use of an electronic signature in particular circumstances (to help allay any remaining concern around validity);
whether an industry working group should be established by the Government to consider practical, technical (non-legal) issues like the security and reliability of electronic signatures as well as questions of trust and identity, and to draw up a set of industry standard guidelines; and
in relation to witnessing (which was the main difficulty raised by stakeholders in respect of deeds) the possibility of:
allowing witnessing via video link;
moving away from traditional witnessing in person, to allow virtual witnessing on a document signing platform (the witness would see a signature appear, but not the physical act of the signatory clicking the button to apply it); or
doing away with the requirement for witnessing of electronic signatures on deeds in favour of a particular type of digital signature, or a new concept of "electronic acknowledgment" where a signatory, within a certain time frame, would simply acknowledge to another person that they have signed a deed (for example, by sending them the signed document by email), and request that person to 'witness' and attest the signature after the event, and
The consultation paper also proposes a more general project (not limited to the context of electronic signatures) to consider whether deeds are fit for purpose in the 21st century.
The availability of electronic signatures makes for faster, simplified signing processes. However, even where validity is not an issue (for example, in relation to simple contracts where a signature is not legally required) we often see the benefits outweighed in practice by the complex technical issues surrounding identity assurance, security and procedure. So in addition to clarity on the validity of electronic signatures for deeds (through a test case, if not through an explicit legislative statement) we would also welcome industry standard guidelines on technical issues.
The Law Commission's final recommendations will be published in a separate report, after consideration of feedback from stakeholders. The final date to submit views and comments on the contents of the consultation paper is 23 November.
[1] Including witnessing, attestation (the application by the witness of their signature on the document, recording the fact they physically witnessed the party apply their signature) and 'delivery' (which actually means the time the deed takes effect and does not require any act of delivering the document to the other party).
Claire Miller