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The use of Electronic Signatures

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The precautions prescribed by the government to work from home are raising queries about whether it will be possible to legally execute documents by electronic signature. Electronic signatures are generally valid under English law. The Law Commission published a report in 2019 which confirmed that electronic signatures are valid under current law, including executing deeds, provided that all execution formalities are satisfied and the person signing the document intends to authenticate the document.

In a ministerial statement made by Robert Buckland on 3 March 2020, the UK government confirmed that the existing legal framework “makes it clear that businesses and individuals can feel confident in using e-signatures in commercial transactions”.

The above position relates to English law only and therefore it is important to confirm the position in respect of e-signatures with local counsel in the relevant jurisdiction.

What is an electronic signature?

Electronic signatures can take many forms, including PDFs, screenshots or photographs of “wet ink” signatures, digital signatures executed with assistance of specialised software and typed names in emails. Each signatory has to confirm the validity of the e-signature and an email to this effect from the signatory will suffice.

Are they acceptable to all Institutions, including the Land Registry?

Problems can arise in relation to the validity of documents required by certain authorities (such as HMRC) and certain registries. The Land Registry, for example, highlighted that the ministerial statement expressly excluded transfers and other registrable dispositions, conveyances and conveyances and other deeds triggering first registration. The Land Registry do accept digital documentation but only in relation to re-mortgages. The Land Registry are under significant and continuing pressure to now accept digital signatures for other documents, however, they are reluctant to do so because of the increased potential for fraud. These considerations mainly relate to circumstances where execution of a deed must take place in the presence of a witness.

How do you ensure an electronic signature is valid?

Various considerations need to be taken into account to ensure that signatures are valid:

  • In witnessing signatures, the person attesting the execution of a document must still see the signatory signing the document and be physically present. The guidance is unclear as to whether witnessing through video conferencing will be allowed, however, to avoid any problems, it is recommended that the preferred approach is to be physically present;
  • Pre-identification of signatories may be required;
  • Ensuring that any e-signature platform used is secure for the parties’ purposes; and
  • All appropriate steps are taken to mitigate any risk of fraud.

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