Moving with the times
The Law Commission of England and Wales has published a report confirming authoritatively that electronic signatures can lawfully be used to execute documents, including deeds and other documents where there is a statutory requirement for a signature.
The Commission tentatively expressed the same view in a consultation paper issued in January 2018, and has now confirmed it based on a scrutiny of legislation and case law relating to both non-electronic and electronic signatures. It says English common law has always been flexible in recognising a range of types of signature, including signing with an ‘X’, initials only, a printed name, or even a description of the signatory such as ‘Your loving mother’.
‘The courts have considered electronic signatures on a number of occasions and have accepted electronic forms of signatures, including a name typed at the bottom of an email, or clicking an ‘I accept’ tick box on a website’, it says.
The Commission aims to remove all doubt
However, it is aware of public uncertainty about the current law on electronic signatures, because it is not contained in a single piece of legislation. Lawyers have also expressed concerns that electronic signatures are more susceptible to fraud than handwritten signatures, and that practical issues such as the reliability and security of the technology, and the cross-border nature of some transactions, can affect people’s willingness to rely on electronic signatures.
The virtue of the Commission’s statement is that it removes doubt, by providing ‘an accessible statement of the [existing] law which makes it clear that an electronic signature can generally be used in place of a handwritten signature as long as the usual rules on signatures are met.’ However it recommends that an industry working group should be formed to consider practical and technical issues around electronic signatures, video witnessing of deeds, and possible legislative reform codifying the law on electronic signatures.
Exceptions to the rule
It also acknowledges at least three major exceptions.
- First, a deed that must be signed ‘in the presence of a witness’ requires the physical presence of that witness, and not a remotely executed signature. In fact, the report acknowledges that it may not be possible to witness an electronic signature even when the witness is physically present.
- The second exception concerns wills, the electronic signing of which is being considered by separate projects being conducted by the Law Commission.
- The third exception is a registered disposition under the Land Registration Act 2002. HM Land Registry is looking at the possibility of developing e-signatures for these.
A fourth possible exception is the power of attorney.
Many respondents to the Commission’s consultation, including the Law Society of England and Wales, strongly objected to electronic signatures on these instruments because of the risk of harm or fraud to vulnerable donors. The Commission accepted that the Office of the Public Guardian and the Justice Ministry should consider what is sufficiently secure and reliable for donors before introducing any system using electronic signatures.
This ruling may well prompt some of the investment providers we work with to consider accepting digital signatures – something we at MFP have been using for many years.