Electronic Signatures in the United Kingdom

The Law Society (The Law Society is the independent professional body for solicitors) UK - Their position on the use of virtual execution and e-signature during the coronavirus (COVID-19) pandemic was published here.

Legislation.gov.uk - The Electronic Signatures Regulations 2002

Thomas Reuters Practical Law 14 April 2020 - COVID-19: electronic signatures (Video)

Overview of Electronic Signatures in the UK

In accordance with the above, the eIDAS Regulation is currently directly applicable under English law and sets out minimal, not maximal, standards for e-signatures. Accordingly, it has had a limited effect on pre-existing English law, given the already broad definition of simple electronic signatures that had been adopted under the ECA (defined below), the admissibility of these as evidence in court under the ECA, and the rare use of qualified electronic signatures.

Next to eIDAS, the Electronic Communications Act of 2000 (ECA) is the main legal instrument regulating the use of electronic signatures in England & Wales. In 2016, the UK also enacted the Electronic Identification and Trust Services for Electronic Transactions Regulations 2016, which amended relevant sections of the ECA that dealt with electronic signatures under the previous regime.

Additionally, in 2019, the Law Commission (an independent commission set up by Parliament to review the law of England and Wales and to recommend reforms) published a report on electronic execution, which was intended in particular to address legal uncertainties concerning electronically executed documents. This was endorsed by the UK Government in March 2020.

 Under English law, contracts may be made orally, in hard copy or electronically, provided that:

1. the key elements of a contract are present (offer, acceptance, consideration, certainty of terms and an intention to create legal relations); and
2. appropriate formalities or execution procedures are followed in certain cases (this is particularly relevant to deeds).

Simple contracts can therefore be validly concluded with an electronic signature (assuming the parties do not agree otherwise) because there is no legal requirement for a signature in the first place. Simple contracts can be made by various forms of electronic communication, including email, website order/acceptance procedures, fax and text messages and it is permitted to exchange/complete legal documents by email or fax (without the need for “wet” signatures).

 The Law Society (2016) and the Law Commission (2019) both confirmed that an electronic signature can be used to validly execute a document if:

(i)    the person signing the document intends to authenticate the document; and

(ii)   any execution formalities are satisfied.

English law has a broad definition for e-signatures and does not in itself distinguish between various types. Section 7(2) of the ECA stipulates that “an electronic signature is so much of anything in electronic form as is incorporated into or otherwise logically associated with any electronic communication or electronic data and purports to be used by the individual creating it to sign”.

The Law Commission recently decided against prescribing the use of digital signatures as a distinct subset of electronic signatures. However, it noted the prevalence of digital signatures in civil law jurisdictions. From an England & Wales perspective, however, there is no clear distinction, and the term “electronic signatures” is used to include digital signatures.

The ECA states that in “any legal proceedings, an electronic signature incorporated into or logically associated with a particular electronic communication or particular electronic data, and the certification by any person of such a signature, shall each be admissible in evidence in relation to any question as to the authenticity of the communication or data or as to the integrity of the communication or data”.  Accordingly, English courts accept documents bearing an e-signature as prima facie evidence that the document is authentic.

The ECA does not directly address the evidential weight to be given to an e-signature. As a result, if the authenticity of an e-signature is challenged, the courts will determine, on a case-by-case basis, whether the e-signature has been correctly used and what weight it should be given against other evidence. In this respect, it is similar to wet-ink signatures. The evidential weight to be assigned to a particular e-signature will, to a large extent, depend on the integrity of the e-signature system employed.

Use cases that generally require a traditional signature

Despite the Law Commission’s guidance, there are circumstances in which it may not be appropriate to use electronic signatures. Electronic records and signatures may not be used for:

• wills;
• registrable dispositions (real estate property documents) that must be submitted for registration with the Land Registry and the Land Charges Registry (with the exception of electronic mortgage deeds, which can be registered using the Land Registry’s digital mortgage service);
• some documents such as company accounts to be registered with Companies House outside its online web-filing service;
• negotiable instruments (such as bills of exchange, promissory notes and chattel mortgages); and
• powers of attorney or statutory assignments.
•  deeds that are being witnessed or used in the context of UK real estate

Additionally, where the original version of a document needs to be filed/registered at or sent to a registry/authority, it is recommended that “wet” signature originals are provided, for example, in respect of the registries set out below:

• HM Land Registry and Land Charges Registry;
• Companies House (although Companies House generally accepts electronic signatures via its online filing service);
• HM Revenue and Customs, where stamp duty is payable on a document;
• Stamp Office (for adjudication); and
• Office for the Public Guardian (for lasting powers of attorneys).

Certain other documents are subject to specific formalities imposed by statute or case law, including that the document to be “in writing”, “signed” and/or “executed as a deed”. These include guarantees (which must be signed and in writing) and legal mortgages or charges by way of legal mortgage over land (which must be executed as deeds).

External Resources:
-Legislation.gov.uk
-Thomas Reuters
-helpx.adobe.com
-Adobe Legal Notices: https://helpx.adobe.com/legal/legal-notices.html

Published January 2021

SigniFlow recommends Adobe Acrobat Reader to validate digital signatures

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