Ministerial statement in response to Law Commission report on electronic execution of documents
How has the government responded to the Law Commission report on electronic execution of documents?The key takeaway
The government has confirmed that its views are aligned with several findings from the Law Commission’s 2019 report on electronic execution of documents.
The use of electronic signatures is legitimate within both commercial and consumer contracts, although it is recognised that vulnerable individuals may need additional protection.
Whilst deeds require a witness to be physically present, the use of video to witness electronic signatures is being considered as a solution.
In September 2019 the Law Commission published a report on the electronic execution of documents, to make the legal position on electronic signatures clearer and more accessible.
The basic legal position is that electronic signatures can be used to execute documents, (including deeds) provided that the party executing the document electronically intends for this to be the case.
In order for deeds to be signed electronically, a witness still needs to be physically present. However, the Law Commission has suggested that video-witnessing could be one of several solutions considered by a government-launched Industry Working Group of experts.
Reasonable electronic versions of existing execution methods are likely be accepted by the courts. Recent case law has shown that an electronic signature can be demonstrated by a name typed at the bottom of an email or by ticking a box on a website confirming acceptance of terms.
On 3 March 2020 the Lord Chancellor and the Secretary of State for Justice issued a written response to the Law Commission’s report. The key points were that:
- ministers agree that there is no need to bring forward primary legislation in order to support the validity of electronic signatures
- the government approve of the draft legislative proposal put forward by the Law Commission - it aligns with their views on the legal position
- electronic signatures can be used in commercial and consumer documents against a background of legal certainty
- vulnerable individuals need to be protected from the changes that electronic execution could bring about in other areas of law
- the government will adopt the Law Commission’s recommendation and establish an Industry Working Group to consider security and technology issues and the use of video to witness electronic signatures
- the government will also ask the Law Commission to carry out a wider review of the law around deeds, although the timing of this will depend on the urgency of other reviews to be undertaken by the Law Commission.
With many UK businesses currently operating work from home policies as a result of the COVID-19 pandemic, the electronic execution of documents is likely to become more prevalent than ever before.
In affirming the Law Commission’s report, the government’s response provides greater certainty to businesses on the use of electronic signatures and how they are likely to be dealt with by the courts.
Any practical tips?
Electronic execution of agreements is acceptable and effective.
If deeds are being executed electronically, note that the issue of witnesses needs to be considered.