The use of electronic signatures in business has increased markedly in recent years in response to an increase in agile working, time and cost restraints in having face to face meetings and environmental sustainability. In 2016 the Law Society produced guidance (prepared with input from Leading Counsel) that electronic signatures are valid under English law. This was followed last year by a government commissioned study by the Law Commission of the law concerning the electronic execution of documents. In its 124 page report (which took into account statute, common law and case law) the Law Commission concluded in “most cases” electronic signatures are a lawful means of executing a document (including a deed) provided that the person signing intends to do so and that any further required formalities (including the requirement of a witness) are satisfied. However, notwithstanding this level of reassurance, there remained a nervousness about the validity of electronic signatures in particular situations, especially deeds.
On the 3rd of March The Lord Chancellor endorsed the Law Commission’s conclusions saying that electronic signatures ‘are permissible and can be used in confidence in commercial and consumer documents’. There are some issues which need further expert consideration including the question of video witnessing of electronic signatures and ensuring permitting electronic signatures does not have any adverse impact, particularly on vulnerable people. The Lord Chancellor has also supported the Law Commission’s recommendation for a wider review of the law of deeds (although the “timing of the review will be subject to overall government and Law Commission priorities given the volume of law reform work which exists”).
While there is no intention of the government to codify the validity of electronic signatures in law, the Lord Chancellor’s response to the Law Commission’s report provides welcome relief that electronic signatures can in general be used with confidence. There do, however, remain some challenges which go beyond the above mentioned issues including the use of electronic signatures in cross border transactions in the absence of harmonisation between different jurisdictions. Parties to a contract need to satisfy themselves that signatures are legally valid in all jurisdictions concerned.
