Electronic signatures: Cultural shift
The most sophisticated kind of electronic signatures can be “more reliable” than signatures witnessed the traditional way in an “unsupervised environment”, a government-backed industry working group has said.
The group called on the government to ensure that “as many official documents as possible” can be executed electronically, though it failed to agree on whether signature platforms should be accredited.
The Law Commission recommended in its 2019 report on electronic signatures that a multi-disciplinary group of legal, business and technical experts should be set up to consider practical and technical issues and identify solutions.
The industry working group, chaired by Mr Justice Fraser and Law Commissioner Professor Sarah Green, said in its interim report, Electronic Execution of Documents [1], that the foundations for a “cultural shift in document execution” were already present.
Qualified electronic signatures (QES), particularly if “underpinned by a regulated digital identities trust framework” as proposed by the Department for Digital, Culture, Media and Sport, were “capable of fulfilling the same objectives as physical witnessing and attestation”.
Since the process of obtaining a QES involved the parties identifying themselves to a certificate provider, the identity of the signatory could be linked to the signature.
“Given the complete electronic audit trail that signature platforms are now able to provide for each signature, there is also an argument to be made that a QES is likely to be more reliable than a signature witnessed in an unsupervised environment.”
The group went on: “Currently, a witness need not be independent, need not read the document, need not know the signatory, need not take steps to identify the signatory, and does not even vouch for the identity of the signatory.
“It is difficult to see therefore what extra protections can be provided by someone witnessing someone’s signature if they do not necessarily provide any of these protections.”
The group said that, in an international context, the need for physical witnessing and attestation made English law “somewhat anomalous” and may soon “discourage and impede” its use.
“Few jurisdictions impose similar requirements to those under English law, and this jurisdictional discrepancy is set only to increase as more documents are executed electronically.”
The group recommended that the government “take steps now” to adopt the use of electronic signatures, ensuring that “as many official documents as possible” were executed electronically, such as lasting powers of attorney and wills.
The temporary provision allowing remote witnessing of wills should be extended permanently and a “cross-border database of permissible regulatory and execution modes” established, starting with the UK’s major trading partners and maintained by government or a not-for-profit organisation.
However, the group could not agree on an accreditation scheme for signature platforms, with some arguing that it would give them “external validation” and others that “the level of bureaucracy and oversight required” would make it impractical.
The group added: “The benefits of electronic execution of documents include speed, clarity, simplicity and security. Appropriate electronic signatures are a safe and effective way of entering into legally binding transactions of all kinds.
“These include anything from major financial transactions to the sale of goods to consumers. The technology and legal framework already exist to allow electronic signing by anyone from a major corporation to an individual.
“HM Land Registry already permits sales of property to be conducted using an electronic signature and is currently conducting a pilot to remove the need for witnessing certain documents. Vulnerable people are also able to use electronic signatures in appropriate circumstances.”