Following its review and consultation, what's the Law Commission's position on electronic signatures?
The key takeaway
Electronic signatures can be used to execute documents validly, including where there is a statutory requirement for a signature.
On 4 September 2019, the Law Commission published its final report detailing its review into the electronic execution of documents. The final report was the culmination of the Law Commission’s review into, and consultation regarding, electronic signatures, the aim of which was to address legal uncertainties surrounding validity of electronic signatures, and to ensure that legislation was sufficiently certain and flexible to accommodate the ever changing digital environment.
The Law Commission confirmed that an electronic signature is capable in law of being used to execute a document (including a deed), provided that the signatory intends to authenticate the document and that any relevant formalities, such as the signature being witnessed, are satisfied. However, where an electronic signature requires witnessing, the requirement that a deed must be signed “in the presence of a witness” still requires the physical presence of that witness.
In terms of form, the Law Commission noted that electronic equivalents of non-electronic forms of signature held to be valid by the Courts, such as signing with an “X” or with initials only, were likely to be legally valid. Further, the Law Commission noted that the Courts have previously accepted various forms of electronic signatures, including a name typed at the bottom of an email, or clicking an “I accept” tick box on a website, as valid.
In recognising that some practical difficulties remain in respect of the validity of electronic execution, the Commission also made the following recommendations:
- the creation of an industry working group – convened by Government to consider practical issues relating to electronic execution, this working group would also provide guidance regarding use across a range of commercial transactions, and where electronic execution is undertaken by vulnerable individuals
- video witnessing for deeds – the working group would also consider solutions to any obstacles to video witnessing of electronic signatures in respect of deeds and attestation, with a view to legislative reform to allow for the same
- a review of the law of deeds – to consider if the concept of a deed remains fit for purpose, as well as specific issues such as witnessing and delivery
- codification of law regarding electronic signatures – in order to improve the accessibility of the law.
Why is this important?
In an increasingly technology-focussed legal landscape, the Law Commission's final report provides further clarity that parties can take advantage of the ease and efficiency offered by electronic execution.
Any practical tips?
Whilst electronic signatures will usually be sufficient, note that it is suggested that the execution of a deed still requires the physical presence of the witness – so traditional execution may be more straightforward. If dealing with other jurisdictions or foreign counterparties, also bear in mind that different rules may apply.