Electronic Signatures – the future of executing documents?
You could be forgiven for failing to spot the release of The EU Regulation on Electronic Identification and Trust Services in the Internal Market (910/2014/EU) (the Regulation), released post EU referendum. We consider the impact of this and the Law Society's Guidance Note on electronic signatures (the Guidance Note).
The Guidance Note identifies four different types of electronic signatures:
- A signature in usual ink and paper format, which is then scanned or photocopied;
- Using a finger or stylus to write on a touchscreen;
- Using an e-signature platform and clicking to have your name automatically inserted (including clicking an "I accept" button); or
- Typing a name into a contract.
English law is fairly relaxed on what can constitute a contract. As such, the Law Society confirms that a simple contract can be concluded using an electronic signature.
Documents subject to a statutory requirement to be "in writing"
Numerous statutes require specific formalities for execution, including a common requirement that a document be executed "in writing". The Guidance Note provides that a contract executed via an electronic signature (including those which solely exist in electronic form) satisfies the statutory requirement to be "in writing" and is valid.
Of particular relevance to property lawyers, s.52 Law of Property Act 1925 specifies that the transfer of land or any interest in land must be made by deed, as must any lease for more than 3 years in length. The Guidance Note states that as above, an electronic signature does satisfy these requirements.
However, deeds signed by an individual also require the presence of a witness who attests to the signature, under .1(3) of the LP(MP)A 1989. The Guidance Note advises that best practice is to have the witness in the room with the individual and witness the signature onscreen.
The Guidance Note also clarifies there is no reason why a combination of execution methods (for example wet ink and paper and electronic signature) cannot be used by any of the parties in a transaction.
The Land Registry & Electronic Signatures
However, whilst electronic signatures may be acceptable under English law, the Land Registry is yet to adapt to these new technological advances, and current policy is only to accept documents provided as evidence which are signed manually, not by facsimile. As such, it would be best practice to ensure that any documents which are likely to be submitted to the Land Registry for registration are signed using the traditional wet ink method.
Of course, with the UK's impending exit from the European Union, this regulation could soon no longer have any effect on English law. Whilst a move away from validating electronic signatures would be highly unlikely – the Electronic Communications Act 2000 and Guidance Note show a strong leaning in favour of electronic signatures – it remains to be seen whether any statute will be implemented conferring the valid status of electronic signatures into English law.