On 21 July 2016 the Law Society released a practice note entitled ‘Execution of a document using an electronic signature’ (“Practice Note”) which advocates a wide application of electronic signatures in England, extending the use to various legal documents including deeds and documents which are required to be signed under hand. The Practice Note relates solely to the position under English law and does not apply to the wider United Kingdom.
The Practice Note does not focus on the various methods of execution via an electronic signature, but rather sets out the principles for determining whether a given document signed with an electronic signature has been validly executed.
The Practice Note recognises that so called ‘Qualified Electronic Signatures’ under the EU Regulation No. 910/2014 (“EIDAS Regulation”) which became directly effective in the UK as of 1 July 2016, are currently not commonly used in England. The Practice Note therefore does not base its conclusions on the provisions of the EIDAS Regulation, but rather on The Electronic Communications Act 2000 (“ECA 2000”) (which provides for a statutory framework for the admissibility (not validity) of electronic signatures in England and Wales) along with general common law principles (which deal with the validity of electronic signatures).
Documents which can be signed using an electronic signature
The Practice Note states that the following documents which are executed under English law can be signed using an electronic signature for the reasons given below.
In the absence of any statutory requirement, there is no need for contracts to be in any particular form.
Documents subject to a statutory requirement to be in writing and/or signed and/or under hand
This is because of the definitions of:
- Writing’ in the Interpretation Act 1978 (which includes ‘typing, printing, lithography, photography and other modes of representing or reproducing words in a visible form’);
- ‘Signature’ in case law (which is ‘whether the mark which appears in a document was inserted in order to give, and with the intention of giving, authenticity to it’); and
- ‘Under hand’ which is ‘generally understood’ to be documents which are executed otherwise than by a deed.
The approach at common law shows a ‘willingness of the courts to interpret various statutory requirements for writing to include the situation where a document is represented on a screen and executed with an electronic signature’.
In addition, section 1(3) of the Law of Property (Miscellaneous Provisions) Act 1989, which requires that a deed be signed in the presence of a witness who attests that signature can be extended to electronic signatures and that the witnessing of the signature does not mean that the attesting witness was physically with the person who signed the deed (i.e. they could watch the signing via a webcam), but does, however, state that it would normally be best practice for the witness to have been physically present (i.e. sat next to the relevant person inserting the electronic signature).
Minutes and resolutions of company incorporated under the Companies Act 2006
A number of documents required by the Companies Act 2006 can already be validly signed using an electronic signature such as minutes and resolutions, however, cases will vary depending on the wording of such documents.
The Practice Note further states that there is no reason why a document cannot be signed using a combination of different methods, so long as each party uses a valid signature method.
Section 7 of the ECA 2000 provides that, in any legal proceedings, an electronic signature incorporated into a particular electronic communication shall be admissible in evidence in relation to any question as to the authenticity of that communication or as to the integrity of that communication.
The Practice Note states that an English court would accept a document bearing an electronic signature as prima facie evidence that the document was authentic and, unless the opponent adduced some evidence to the contrary, that would be sufficient to deal with a challenge. The person disputing the authenticity of the document would be required to prove that, on the balance of probabilities, it was not authentic. The Practice Note reminds solicitors that, under the SRA Code of Conduct, a solicitor should not allege fraud without material which he or she reasonably believes shows, on the face of it, a case of fraud.
The Practice Note notes that some bodies still require a wet ink signature, for example the Land Registry and HM Revenue and Customs for stamp duty documents. It is also reiterated that the UK has chosen to remove itself as a member of the European Union consequently the future of electronic signatures could be revisited.