At a time when signatories may be forced to sign documents remotely, this article addresses the legality of using electronic signatures under the Laws of England.
What is an Electronic Signature?
An electronic signature is a way to get consent or approval on electronic documents or forms.
Electronic signatures can take various forms, including:
- Typing a name into a contract.
- A scanned signature or pasting a signature (in the form of an image) into an electronic contract.
- Using a web-based electronic signature platform to generate an electronic representation of a handwritten signature.
Are Electronic signatures legally accepted?
The Law Commission in its 2019 report, ‘Electronic execution of documents’, confirms that:
‘an electronic signature is capable in law of being used to execute a document (including a deed) provided that:
(i) the person signing the document intends to authenticate the document; and
(ii) any formalities relating to execution of that document are satisfied’.
More recently, in March 2020, this view was endorsed in a UK Government Ministerial Statement.
Is this applicable to all contracts?
Electronic signatures are valid in most cases, however if the documentation is to be submitted to an institution or authority after signing it is important to check their policy on electronic signatures. At this time, various Government institutions will not accept electronic signatures, including HMRC (in relation to stock transfer forms) and The Land Registry (in relation to any document submitted).
Please note however, HMRC have put temporary measures in place to stop the spread of coronavirus (COVID-19). Stock Transfer Forms should not be posted for the time being, instead an electronic version should be emailed to email@example.com.
What if a witness is required?
For the time being, where a witness is required, the witness must be physically present when the signatory inserts their electronic signature into the deed. Video conferencing will not count as being physically present. It is generally accepted that the witness should be independent of the signatory, which would therefore not include a family member, someone mentioned in the document being executed, or a co-director (where the signatory is a Company). Whilst having an independent signatory would be best practice, it is not a legal requirement (apart from in relation to the witnessing of a deed).We would suggest given the COVID-19 situation for the time being that a family member/ someone in the same household could witness the document.
Can another person apply my digital signature?
It is always advisable, for security purposes, to limit the amount of people who have access to your electronic signature. Where possible the signatory should always try to sign the document personally. Having said this, where it is absolutely necessary to sub-delegate to another person, then that representative will be acting as an agent of the signatory. To provide certainty and avoid any arguments in relation to the validity of the document, the signatory should provide written confirmation that the agent was expressly authorised to insert their electronic signature into the relevant document on the signatory’s behalf.