In our digital world, the question frequently arises as to whether a document can be signed “electronically”. In this newsletter, we will explain what an electronic signature is as well as how and when it can be used under Dutch law.
The definition of a signature
The purpose of a signature is to confirm the intention of the signatory (i.e. is the signatory aware of the content of the document?) and verification of their identity (i.e., is the signatory the same person as the person who is intended to sign the document?).
An electronic signature is the electronic equivalent of a handwritten signature (i.e., a wet ink signature on a hard copy document). It can take many forms, such as the typewritten name of a signatory, a scanned handwritten signature, a unique representation of characters or a signature created by cryptographic means.
Based on a European Directive (1999/93/EC), which has been implemented into Dutch law, electronic signatures can be divided into three categories:
- simple electronic signatures: including the typewritten name of a signatory or a scanned handwritten signature;
- advanced electronic signatures: signatures that (i) enable the identification of the signatory; (ii) are unique to the signatory; (iii) are established using a device that is under the exclusive control of the signatory; and (iv) are linked to the document in a way that any subsequent change is detectable;
- qualified electronic signatures: advanced electronic signatures that are (v) based on a qualified certificate; and (vi) generated by a secure signature creation device.
The difference between the advanced electronic signature and the qualified electronic signature is that the qualified electronic signature should contain a qualified certificate (i.e., a digital file attached to the electronic message) and is generated by a secure signature creation device (i.e., a smart card, USB-token or Hardware Security Module). The providers of a qualified certificate should be accredited by a government authority, which is currently the Authority for Consumers and Markets (ACM) in the Netherlands. These providers, who often also provide the secure signature creation devices, are listed on the ACM website.
Under Dutch law, an electronic signature has the same legal effect as a handwritten signature, provided that the method used for authentication is sufficiently reliable, taking into account the purpose for which the electronic signature is used and all other circumstances of the case.
A qualified electronic signature is legally considered as sufficiently reliable and therefore any person who challenges its reliability has to prove that it is not a qualified signature. Although the simple electronic signature and the advanced electronic signature are not considered sufficiently reliable by law, these types of signatures can still have the same legal effect as a handwritten signature, provided they are sufficiently reliable for the situation in which they are used. If this reliability is challenged by another person, the signatory will need to prove that it was indeed their signature.
As different purposes and circumstances require different degrees of reliability, the decision should be made on a case by case basis as to whether a simple signature would suffice or whether an advanced or qualified electronic signature would be more appropriate.
Legalization and notarial deeds
In some situations, legalization of a signature is required. A legalization is a statement by an authorized official, which is a civil-law notary in the Netherlands, confirming that a signature on a document is authentic. Pursuant to Dutch law, such a statement has conclusive evidential value as to the identity of the signatory and the validity of the signature. Thus far, no satisfactory technical means exists for Dutch civil-law notaries to ensure that an electronic signature has been placed by the relevant signatory. Therefore, legalization of an electronic signature by a Dutch civil-law notary is not possible to date. For the same reason, a document that is used for the purpose of executing a Dutch notarial deed, such as a power of attorney or a shareholders’ resolution to amend the company’s articles of association, must contain a handwritten signature. Furthermore, Dutch law requires a notarial deed to be signed before a Dutch civil-law notary, in hard copy, by means of a handwritten signature.
Documents that may be signed electronically
The question as to whether an electronic signature can be used for a certain document can be addressed as follows:
Click here to view table.
New EU Regulation
With effect from July 1, 2016, the aforementioned European Directive will be replaced by the Regulation on electronic identification and trust services for electronic transactions in the internal market (910/2014/EU), which will be directly applicable in all EU member states without implementation in national legislation being required.
The aim of this Regulation is to ensure cross-border access to online services offered by the EU member states as well as ensuring secure electronic identification and authentication. Among other things, the Regulation will clarify the requirements for qualified electronic signature creation devices to improve the functionality of electronic signatures and will provide rules on the minimal security and liability for the providers of a qualified certificate and their services.
In our view, the most important change introduced by the Regulation is that the qualified electronic signature will gain the same legal status as a handwritten signature. This means that it will no longer be possible to challenge the signature based on its reliability. However, this change will not affect the question of which documents may be signed electronically.
Electronic signatures can take many different forms and can be divided into three categories: simple, advanced, and qualified electronic signatures. In general, an electronic signature can have the same legal effect as a handwritten signature, with a qualified electronic signature considered as the most reliable option. However, certain documents, such as documents that require the involvement of a Dutch civil-law notary, cannot be signed by means of an electronic signature as they still require a handwritten signature. In the near future, new EU legislation will introduce various changes, with the most important change being the equal status of the qualified electronic signature and the handwritten signature.