Yours Electronically: The Law Commission confirms electronic signatures are legally valid

September 16, 2019

2 min read

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What's going on here?

The Law Commission has stated that electronic signatures have legal force to execute contracts, as long as the usual rules and formalities are met.

What does this mean?

Technology disrupting the legal industry is now more commonplace than ever. Individuals, consumers and businesses demand modern, convenient methods for entering into binding transactions. The topic of the legal validity of electronic signatures is foremost among these concerns. Millions of contracts are signed electronically every day, yet despite this, some parties still had doubts over whether electronic signatures can be used in certain situations.

On the 4th September, the Law Commission published their final report on the electronic execution of documents. In an attempt to clear confusion over the issue, they have stated that an electronic signature is capable of being used to execute a document, including a deed, so long as any legal formalities are satisfied. The days of the handwritten signature seem to be numbered.

What's the big picture effect?

Although the Law Commission formally declared that electronic signatures are valid, they did not wholeheartedly endorse the concept for every situation. In particular, they acknowledged concerns that certain types of electronic signatures would be less secure and open to abuse. Most interestingly, the Law Commission has concluded that they are against a fully online process for applying for lasting powers of attorney. The Law Society has said that “the removal of physical signatures would remove an essential safeguard against abuse of a highly vulnerable sector of society”. 

Overall, the certainty and concision of the report are impressive; the law as it currently stands is pulled together from a wide range of authorities. Consequently, although this report provides clarity, it also brings greater calls for the government to codify the law on electronic signatures.

So, what does the future of electronic signatures look like? The Commission has made several recommendations to address some of the practicalities of electronic execution. These include:

  • Setting up an industry working group, to consider the issues around electronic signatures and provide best practice guidance;
  • Introducing video witnessing for deeds;
  • And a further review of the law of deeds, and whether the concept remains fit for purpose.

Therefore, although this is a step in the right direction with regards to incorporating technology into basic legal issues, it also highlights the dangers and uncertainties that inevitably come with greater efficiency.

Report written by Sarina Johal

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