LEGAL
Are electronic signatures valid according to law?
By James Munn (pictured), trainee solicitor at Buckles Solicitors
The way business is conducted constantly changes. However, issues surrounding the electronic execution of documents, including uncertainty over the legal status of electronic signatures, can hinder the use of new technology, particularly where legislation requires a document to be “signed” or executed as a deed.
ELECTRONIC SIGNATURES Electronic signatures are nothing new. Their use in larger commercial transactions, however, has been somewhat limited in the absence of definitive guidance on their legal validity and effectiveness. In response, the Law Commission is undertaking a consultation process
to end the uncertainty regarding formalities around the electronic execution of documents and ensure that the law governing them is sufficiently certain and flexible to remain competitive following Brexit. The consultation paper, Electronic execution of documents, sets out its
provisional conclusions and potential options for reform, with the intention of allowing businesses to speed up transactions by going fully digital. Having reviewed EU law, UK legislation and case law, the Law
Commission has provisionally concluded an electronic signature can meet a legal requirement for a signature if an intention to authenticate the document is demonstrated.
SIGNATURES Currently, the law is flexible, allowing contracts to be created in many ways, with most not even required in written form. However, procedures known as formalities must be followed for certain documents to be valid in law, such as witnessing.
Formalities have numerous purposes: • providing evidence of the transaction • helping to ensure the maker realises what they are doing • protecting weaker parties • making the type document and its effect apparent to third parties
ELECTRONIC SIGNATURES The EU regulation, eIDAS, is part of UK law. It provides that: • electronic signatures cannot be denied legal effectiveness solely because of their electronic nature;
• qualified signatures satisfy any legal requirements in the same way as handwritten signatures;
• electronic signatures are admissible in evidence in legal proceedings.
Electronic signatures are admissable as evidence The Electronic Communications Act 2000 mirrors the admissibility
provision in eIDAS but does not expressly confirm the validity of electronic signatures. This partly contributes to the uncertainty surrounding electronic signatures. The UK Courts have concluded electronic methods of signing, such as a typed name in an email or clicking an “I Accept” button, satisfy a statutory requirement for a signature where there is an intention to authenticate the document.
DEEDS Currently, no law deals with electronic execution of deeds and, therefore, the position remains uncertain. Deeds have more onerous formality requirements than documents which simply require a signature. Generally, to be validly executed, deeds must be signed in the presence
of a witness, who attests the signature, and be delivered as such. The Law Commission finds that this requirement means the witness must be physically present at the signing, adding their own signature at that time.
WHAT DOES THIS MEAN IN PRACTICE? The Law Commission’s provisional findings should provide reassurance to parties wishing to use electronic signatures to execute agreements. Under English law, simple contracts need not be written and can take
any form. Consequently, in such instances, there are no restrictions on the use of electronic signatures. Electronic signatures could be used for minutes and written resolutions,
subject to the intention to authenticate requirement. Certain organisations still require wet-ink signatures on paper versions.
This includes The Land Registry and Land Charges Registry for any paper versions of documents sent to them, and HMRC would normally expect to stamp a wet-ink version of documents, such as stock transfer forms.
Bray & Bray Solicitors back divorce reforms
The news that Government is considering introducing a system of no-fault divorce has been welcomed by Leicestershire solicitors Bray & Bray. David Berridge, Head of Family
The concept of blame can make divorce proceedings harder
72 business network October 2018
Law at Bray & Bray and a partner at the law firm, believes the removal of the concept of fault or blame from divorce would make the process less stressful and
simpler in the majority of cases. Many senior judges are also in favour of the reform. The new proposal put forward by
Justice Secretary David Gauke would end the need to state a ‘fault’ against the other spouse. Under current law in England and Wales, unless people can prove their marriage has broken down due to adultery, unreasonable
behaviour or desertion, the only way to obtain a divorce without a spouse's consent is to live apart for five years. David said: “There are so many
difficult emotive issues to consider during divorce as well as financial problems – adding the concept of blame often heightens these issues rather than smoothing the way to a resolution.”
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