On 4 September 2019 the Law Commission published its report relating to the electronic execution of documents, which followed its consultation paper published in August 2018 to identify and address legal uncertainties concerning electronically executed documents.
The report includes the following statement of the law relating to electronic execution:
- An electronic signature is legally capable of being used to execute a document (including a deed) provided that the person signing the document intends to authenticate the document and any formalities relating to execution of that document are satisfied.
- An electronic signature is admissible in evidence in legal proceedings, for example, to prove or disprove the identity of a signatory and/or the signatory’s intention to authenticate the document.
- Unless relevant legislation or case law or contractual arrangements specific to the document in question leads to a contrary conclusion, the common law adopts a pragmatic approach and does not prescribe any particular form or type of signature.
- The courts adopt an objective approach, considering all of the surrounding circumstances, in determining whether the method of signature demonstrates an authenticating intention. For example, the Courts have held that non-electronic methods such as signing with initials only or using a stamp of a handwritten signature can be treated as valid signatures.
- The courts have also held that the following electronic forms of signature can amount to valid signatures in the case of statutory obligations to provide a signature where the statute is silent as to whether an electronic signature is acceptable:
- a name typed at the bottom of an email;
- clicking an “I accept” tick box on a website; and
- the header of a SWIFT message.
- The Law Commission’s view is that the requirement under the current law that a deed must be signed “in the presence of a witness” does still require the physical presence of that witness. This is the case even where both the person executing the deed and the witness are executing/ attesting the document using an electronic signature.
The Law Commission has also recommended establishing an industry working group to consider any further practical issues, including obstacles to video witnessing of electronic signatures on deeds and attestation.
The Law Commission report is a helpful summary of the law in this area and in our view adopts a sensible and pragmatic approach in the constantly evolving digital world.
However, if electronic signatures are to be used, we would also recommend maintaining a clear evidence trail of the signatory’s intention to authenticate the document (eg confirmatory emails) should the authenticity of an electronic signature subsequently be challenged.
For further information, please contact James Lyons, Partner in our Banking, Governance & Corporate team.