The Validity of Electronic Signatures

There has been a good deal of news recently around the increased use of electronic signatures to formal legal documents, often contracts of one kind or another, accompanied by a rise in the amount of software that accommodate this method of signing.

Amid some confusion, The Law Commission announced, last year, that electronic signatures are indeed valid, saying that they “satisfy legal requirements…potentially paving the way for much quicker transactions for businesses and consumers”.

Their consultation on the subject also suggests that where an electronic signature needs to be witnessed, this could be done either using a video link or by requiring the signatory to confirm, after the event, that they have signed the document.  Although the Law Society’s own note on the use of electronic signatures states that “best practice” would be for the witness to be physically present.

We mention software above, and there are many now available, although it is not necessarily the case that an electronic signature “platform” has to be used in order to create a valid electronic signature.  These platforms are common, and useful, because as well as giving the users the security of having their own user accounts, which are hopefully well encrypted, they give an element of evidential weight to the process having been followed correctly.  In addition, they provide various confirmations and records, making it more difficult for one party to argue that they did not in fact sign the agreement.

This is all good news and sits well in the modern 21st Century inter-connected world, in which we are now used to everything, or almost everything, being available and accessible electronically.  The various notes recently issued do, however, state that there still needs to be a clear piece of legislation stating the legitimacy of electronic signatures and we do not yet have that.

And, in the context of property transactions, which is our main area of interest, the Land Registry still require wet-ink signatures on documents sent to them, so we cannot yet cancel the paper and toner orders.  Legal practice is not generally the fastest-moving area of business activity and so, for now, we will have to continue using wet signatures in the transactions we deal with.  But it is definitely positive to read of progress being made in this area overall.

Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of advice, recommendation or opinion. DPM Legal Services Limited accepts no liability for any loss or damage, howsoever caused, as a result of any reliance on any information provided.