Electronic signatures can officially be used to sign formal legal contracts under English law, the Law Commission confirmed Tuesday, publishing the early findings of an independent report in a bid to “sweep away current uncertainty” in the law.
That had come amid confusion over the relationship between common law rooted in a 1677 statute and more recent European regulations, amid the growing use of electronic signatures to improve workflow efficiency and online document use.
Law Commissioner Stephen Lewis said: “Contract law in the UK is flexible, but some businesses are still unsure if electronic signatures would satisfy legal requirements.”
“We can confirm that they do, potentially paving the way for much quicker transactions for businesses and consumers.”
(A 19-page summary of the consultation paper can be found here).
Stumbling Block from 1677
The 1677 Statute of Frauds, which is still in force today, requires certain documents to be in writing and signed.
As the Law Commission — an independent body established by an act of Parliament in 1965 to scrutinise legal developments across England and Wales — notes, the EU-wide eIDAS regulation says that an electronic signature cannot be denied legal validity simply because it is electronic and that that electronic signatures are admissible in evidence in legal proceedings.
But while the Electronic Communications Act 2000, a UK statute, had mirrored the admissibility provision in eIDAS, it does not expressly provide for the validity of electronic signatures and had caused confusion.
Electronic signatures can assume various forms: a typed name at the end of an email, a typed name on an electronic form or document, a PIN number used for any kind of transaction or clicking on the “Agree” or the “OK” button on any online contract.
(Market leaders in the e-signature sector include Adobe, DocuSign, OneSpan and SIGNiX).
Welcomed by Industry
Welcoming the announcement, Jacqueline de Gernier of digital signature specialist DocuSign, said in an emailed statement: “We are delighted to see this positive outcome. The growth of the UK economy will be underpinned by organisations and individuals being able to conduct business in a faster, more efficient way and by having the ability to eliminate the hard costs associated with paper-based manual processes.”
She added: “This announcement serves as further reassurance for those already signing contracts digitally as to their validity. It removes any potential remaining confusion or uncertainty around the status of electronic signatures, and will certainly serve as a catalyst for more traditional businesses to adopt electronic signatures.
Webcam Witnesses?
In further steps to improve the law, the Law Commission is seeking views on whether:
1) The government should set up a group of industry experts to monitor the use of electronic signatures and advise on potential changes which could help businesses as new technology emerges
2) Webcam or video links could be used instead of a physical witness for documents which require witnessed signatures
3) There should be a move away from traditional witnessing in person to a signing platform alone, where the signatory and witness are logged onto the same programme from different locations; or the ability of a person to “acknowledge” that they applied an electronic signature to a witness after the event.
