Ministerial statement gives greater certainty on electronic signatures

Posted: September 4, 2020

The Government has issued a statement in response to the Law Commission’s report on electronic execution of documents, which aims to give greater clarity and certainty to signing documents electronically.

Business Impact

Individuals and companies wishing to do business will frequently enter into agreements, however the current lockdown measures in the UK pose difficulties as to how agreements can be signed.  For example, many people who are working from home at this time may not have access to printers, and so electronic signatures have become increasingly popular.  The Government’s broad approval of the Law Commission’s initial report into electronic execution, confirms that these are valid on both consumer and commercial contracts (provided that there is intent) and gives further certainty to this area.

Overview

The Government welcomed the Law Commission’s report and agreed with the conclusion that formal primary legislation is not necessary to reinforce the legal validity of electronic signatures, as the legislation currently in place already caters for these for both individuals and businesses.  The courts have also agreed on this point, with recent case law showing that simply a name typed at the end of an email can be considered a valid electronic signature.

The Government further endorsed the Law Commission’s draft legislative provision, which accurately reflects the Government’s view on the legal position in relation to electronic signatures.

The statement accepts the recommendations that an Industry Working Group should be established, and that there are issues with security and technology which require further investigation from experts.  The Industry working Group will be specifically asked to consider the question surrounding video witnessing of electronic signatures.  This is particularly important for deeds which currently require a witness to be physically present, which can be prohibitive in the current climate.

The statement from the Government highlights the fact that the status of electronic signatures is applicable in other areas of law, and any reform must take this into account and ensure that there is no adverse impact on vulnerable people.  The Government has requested a wider review into the law of deeds is undertaken by the Law Commission, subject to other priorities and volume of work that already exist.

Summary

The Law Commission report published in September 2019 set out to make the legal position on electronic signatures clearer and more accessible.  The Government, in supporting much of this report, has gone some way to achieve this however further reports and consideration are needed before this issue is fully resolved, particularly in relation to the video witnessing of signatures.

Henry DiMascio, Trainee Solicitor, Simkins LLP