In response to a request from the Ministry of Justice, The Law Commission has issued a consultation on the electronic execution of documents. Very helpfully, it gives an overview of where it thinks the existing law stands and makes proposals for changes, on which it is seeking opinions.
The Commission has concluded that the current law recognises the validity of electronic signatures unless specific regulatory or procedural requirements require otherwise.
By law, certain agreements need to be written and signed in order to be valid. These include:
Further, there are certain agreements that must be entered into by deed (ie written, expressed to be a deed, validly executed (signed in front of a witness) and delivered). These include:
The Law Commission lists the following forms of electronic signature:
The Commission concludes that the law as it stands recognises that e-signatures meet the statutory legal requirement for a document to be signed provided that an authenticating intention can be demonstrated.
It is aware of the practical concerns (for example, did Mr X actually sign the document? Does the signatory have authority?) but it states that issues of security and reliability are up to the parties to the documents to decide for themselves.
While the Commission does not think further legislation is required, it recommends an industry working group be set up to consider these practical issues.
There are still documents that cannot be executed by way of e-signature.
In relation to deeds generally, the point is made that the requirement for a witness needs the physical presence of a witness at the point of signing, making electronic signature impossible for such documents. The consultation asks for views on whether this should be relaxed to allow witnessing via video link.
The Commission also asks for opinions as to whether the law relating to deeds generally should be the subject of a future project.
It also emphasises that irrespective of whether an e-signature is a valid means of execution/signature, if a document has to be registered with a central registry whose requirements are for “wet” signatures (the Land Registry or Companies House for example) then such documents cannot be executed electronically.
Finally, it should be stressed that the consultation specifically excludes wills and registered dispositions under the Land Registration Act 2002 from its scope. In relation to land dispositions, the Land Registry has stated an intention to press ahead with fully digital conveyancing documents but these are not yet in place, although a digital mortgage service is being developed.
The consultation gives a helpful overview of where the law stands with regard to e-signatures. Many of us are probably already using them and it is up to those directly concerned to form their own view as to whether practical issues of security or reliability are satisfactorily resolved.
Deeds, wills and land dispositions must still be executed using “wet” signatures so for the time being, hard copies of these documents will still have to be sent by clients from all corners of the globe to the solicitor’s office in order for these transactions to be effected.
The consultation closes on 23 November 2018.