As we reach the end of 2015, it is instructive to review the major developments in Scots law in the past year or so in relation to the use and legality of electronic documents, electronic signatures and the electronic delivery of both electronic and traditional paper documents. There is now a strong argument that the law is far clearer in Scotland than across the Border, to the benefit of businesses operating under Scots law.
Scots and English law on electronic documents and signatures are based on European law. As far back as the year 2000, the UK introduced the Electronic Communications Act, followed by the Electronic Signatures Regulations in 2002. This made all types of electronic signatures (as defined in the legislation) admissible in court to evidence the authenticity or integrity of an electronic communication.
There have been recent developments in Scotland which build on the existing UK framework.
Recent legislation (including The Land Registration etc. (Scotland) Act 2012 and the Electronic Documents (Scotland) Regulations 2014) means that Scots law now confers equivalent status and standards of validity on documents created in electronic form in compliance with the new law to that given to paper documents (with the exception of wills and testamentary writings which must be created and signed in traditional form).
The limited categories of agreement that Scots law actually requires be put in writing (such as documents relating to interests in land and trusts) can be signed by electronic means too, but a specific form of electronic signature – an ‘advanced electronic signature’ - is needed for these restricted categories of document. An “advanced electronic signature” is defined as an electronic signature “whichis uniquely linked to the signatory, capable of identifying the signatory, created using means that the signatory can maintain under his sole control, and which is linked to the data to which it relates in such a manner that any subsequent change of the data is detectable”.
An advanced electronic signature backed up by a certificate in terms of the legislation will attract the same statutory presumptions of authenticity as a pen and ink executed and witnessed paper document.
For other types of document, any form of electronic signature (as defined in the Electronic Communications Act 2000) is competent, although use of an advanced electronic signature will carry greater evidential weight than other simpler (but still competent) forms, such as scans of the original handwritten signature.
Although it was clear that electronic documents could be delivered electronically, there remained a question mark in Scots law about whether it was competent to scan in your ‘signed on paper’ document and deliver it by e-mail. Did e-mail delivery count or did you have to deliver a hard copy of the document by physically handing it over? In addition to permitting execution in counterpart (the signature by different parties of separate but identical copies of an agreement, instead of every party requiring to sign the same piece of paper) the Legal Writings (Counterparts and Delivery) (Scotland) Act 2015 brought in in July of this year removed this doubt– electronic delivery is competent for documents created and signed on paper as well as for electronic documents.
England – a comparison
Competency of electronic signature of deeds
In England and Wales, the law is still developing and there remains some doubt about whether a deed signed using an electronic signature would be validly executed. In particular, difficulties are likely to arise in satisfying any requirement for witnesses using electronic means. There is currently no widespread practice of executing English deeds (as distinguished from simple contracts) by electronic means. There is no similar concept of deeds in Scotland and therefore this issue does not arise in Scotland.
Can electronic documents count as ‘writing’ where ‘writing’ is required by English law?
In Scotland, there is no longer any restriction on the use of electronic documents and signatures for any kind of document governed by Scots law other than wills and testamentary writings. In some cases an ‘advanced electronic signature’ must be used.
However, the position is different in England where the law remains unclear on whether electronic documents, including e-mails, count as ‘writing’ where ‘writing’ is specified as being required under numerous different statutes. Unfortunately the 2000 Act did not contain any provision confirming that such references were to be deemed to include electronic documents in England. Therefore, there is a risk that using electronic means to conclude a transaction which needs to be ‘in writing’ and /or ‘signed’ according to relevant legislation might not be valid. However, some comfort can be taken from the declared view of the English Law Commission that statutory requirements for “writing” in England aregenerally capable of being satisfied by e-mails and by website trading, and statutory requirements for “signature” by the use of a digital signature, scanned manuscript signature, typing a name or initials, or clicking on a website button. Crucially the English Law Commission considered that it is function (namely, demonstrating an authenticating intention of the signatory) rather than form, which is determinative of the validity of a signature.
In summary, there remain few, if any, legal impediments to the use of electronic documents, signatures and delivery in Scotland. Any remaining disincentives to the widespread adoption of electronic contracting will be practical points, such as the time and cost in reviewing the various possibilities and providers available, conducting risk assessments and implementing risk prevention procedures in relation to specific ‘e-risks’ that are not applicable to paper documents and physical delivery.