Documents signed electronically - even when a statutory requirement for a signature predates the digital age - have legal force, the Law Commission says today in an attempt to clear up lingering doubts over the issue.
In the final report of a government-commissioned study of the law concerning the electronic execution of documents, the commission states that in 'most cases', electronic signatures can be used as a viable alternative to handwritten ones. The conclusion emerges in a 124-page study of statute, common and case law.
Businesses and individuals already sign millions of contracts electronically every day, from doorstep delivery receipts to multi-million pound currency deals. Despite this, the commission says some parties still have doubts over whether an electronic signature can be used in particular situations.
Today's report, addressed to the lord chancellor, opens with a two-page statement of the law as assessed by the commission. Overall it states that an electronic signature is capable in law of executing a document (including a deed) provided that the person signing intends to do so and that any further required formalities, such as a witness, are satisfied.
However the commission dashes hopes at the more gung-ho end of the digital community that remote witnessing, for example over video links, would be valid. 'Our view is that the requirement under the current law is that a deed which must be signed "in the presence of a witness" requires the physical presence of that witness,' it states.
It also echoes the Law Society's warning that the rush to encourage people to apply onlne for lasting powers of attorney could put individuals at risk. The Office of Public Guardian and the Ministry of Justice 'should consider what is sufficiently secure and reliable for donors before introducing any system using electronic signatures.'
Stephen Lewis, commercial and common law commissioner, said: ’Our report aims to provide an accessible statement of the 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.'
The common law in England and Wales 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 report states. The courts 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. These court decisions supplement the EU eIDAS regulation which came into effect in 2016.
Despite the general green light, the commission makes several recommendations to address some of the practicalities of electronic execution and the rules for executing deeds. These include:
- Setting up an industry working group, to consider practical and technical issues around electronic signatures and provide best practice guidance for their use in different types of transactions.
- Video witnessing for deeds – the industry working group should look at solutions to the practical and technical obstacles that exist to video witnessing. Following this work, the government should consider legislative reform to allow for this.
- A future review of the law of deeds, to consider broad issues about the effectiveness of deeds and whether the concept remains fit for purpose and specific issues which have been raised by stakeholders. The review should include deeds executed on paper and electronically.
The commission also says the government may wish to consider codifying the law on electronic signatures in order to improve the accessibility of the law.