UNITED KINGDOMSince 2002 Electronic Signature’s have been recognized by law in the United Kingdom following regulations that were established in the EU in 1999. (Read below for insight)
eSignature Legality Summary
Under English law, a written signature is not necessarily required for a valid contract – contracts are generally valid if legally competent parties reach an agreement, whether they agree verbally, electronically or in a physical paper document. Case law, including the decision of the Court of Appeal in Golden Ocean Group v Salgaocar Mining Industries, specifically confirms that contracts cannot be denied enforceability merely because they are concluded electronically.
However, to prove a valid contract, parties may need to present evidence in court. Digital transaction management solutions, such as electronic signatures, are a way to provide electronic records that are admissible in evidence under s7(1) Electronic Communications Act 2000 (“ECA 2000”) to support the existence, authenticity and valid acceptance of a contract. One type of electronic signature, a Qualified Electronic Signature, provides additional substantiation in court by providing the digital equivalent of a handwritten signature.
Under English law, some documents must be executed as a deed. Electronic signatures are a valid method of executing such deeds under English common law. Two important exceptions to this general rule are deeds which are registrable with the UK Land Registry, and wills.
Deeds which are registrable with the UK Land Registry are subject to a separate statutory regime under Section 91 of the UK Land Registration Act 2002 and the Land Registration Rules 2003. The statutory scheme provides that electronic deeds will be accepted for registration at the UK Land Registry if they are the subject of a notice issued by the UK Land Registry under rule 54C of the Land Registration Rules 2003. Currently, the only deed that is the subject to such a notice is a “digital mortgage”, which must be signed using the Land Registry’s purpose-built “Sign your mortgage deed” service.
Wills are a special form of deed where the current law is inconclusive as to whether they may be electronically executed or not. Current case law does not conclusively resolve the issue: a recent decision (Lim v Thompson [2009] EWHC 3341 (Ch)), where a photocopy of the will maker’s signature was held not to be a valid signature, suggests a reluctance by the court to accept anything other than an original handwritten signature.
In many cases, the execution of a deed must be physically witnessed and the witness must attest to the deed. A witness to an electronically executed document must therefore be in the same room as the signatory when they apply their electronic signature and can electronically attest to that deed.
In addition, Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market (the “eIDAS Regulation”) came into force on 1 July 2016. The eIDAS Regulation repealed and replaced the e-Signatures Directive (1999/93/EC) and is directly applicable in the 28 member countries of the European Union.
The eIDAS Regulation is technology-neutral and defines three types of electronic signature (SES, AES1 and QES2). Article 25(1) provides that an electronic signature shall not be denied legal effect and admissibility as evidence in legal proceedings solely on the grounds that it is in an electronic form or does not meet the requirements of a QES. Articles 25(2) and (3) give a QES the same legal effect as a handwritten signature and ensure that a QES recognized in one Member State of the EU is also recognized in other Member States. Finally, Recital 49 allows national law to set requirements regarding which type of electronic signature may be required in which circumstances.
In some cases, documents must be registered with an authority to have legal effect. There is nothing to prevent an individual authority from setting its own specific additional requirements for documents to be registered with it. Where a document needs to be registered with an authority to have legal effect, even where it has been executed lawfully using an electronic signature, if that authority only accepts “wet ink” signatures, the parties will not be able to execute documents electronically, regardless of the legal position. Therefore, a party should be familiar with the industry practice of a specific individual authority to ensure that such authority will accept a document with an electronic signature.
Use Cases for Standard Electronic Signature (SES)
Use cases where an SES is typically appropriate include:
- certain HR documents, such as employment contracts, benefits paperwork and other new employee on-boarding processes
- commercial agreements between corporate entities, including NDAs, procurement documents, sales agreements
- consumer agreements, including new retail account opening documents
- certain real estate documents, including documents usually signed under hand (e.g., not as a deed) and where such documents are not to be lodged at the Land Registry and are not registrable
- certain securitization documents, such as a guarantee
Use Cases That Are Not Typically Appropriate for Electronic Signatures or Digital Transaction Management
Use cases that are specifically barred from digital or electronic processes or that include explicit requirements, such as handwritten (e.g., wet ink) signatures or formal notarial process that are not usually compatible with electronic signatures or digital transaction management.
- Handwritten – real property documents submitted for registration with Land Registry and Land Charges Registry, including deed of transfer, certain leases, grants or transfers of a charge
- Handwritten – documents which are registrable or need to be filed with an authority which requires wet-ink signature such as documents required to be sent to HM Revenue and Customs, where stamp duty is payable
- Handwritten – various personal documents such as wills and lasting powers of attorney
[1] An AES is an “advanced electronic signature”, a type of electronic signature that meets the following requirements: (a) it is uniquely linked to the signatory; (b) it is capable of identifying the signatory; (c) it is created using means that are under the signatory’s sole control; and (d) it is linked to other electronic data in such a way that any alteration to the said data can be detected.
[2] A QES is a specific digital signature implementation that has met the particular specifications of a government, including using a secure signature creation device, and been certified as ‘qualified’ by either that government or a party contracted by that government.
Local Technology Standards
As part of the European Union, the UK defines different classes of electronic signatures, as specified in the eIDAS Regulation, including qualified electronic signatures in the local Electronic Signature Regulations (“ECA 2000”). A Qualified Electronic Signature is automatically granted the equivalent legal effect of a handwritten signature. Where a Qualified Electronic Seal is used (by legal persons such as corporate entities) the integrity of the data and correctness of the origin of the data shall be presumed. The enforceability or validity of a document signed by electronic signature, regardless of technology or certification, depend on the evidence associated with a particular signature (or seal).
eSignatures After Brexit
With the UK pursuing an exit from the EU, the evolution of esignatures in the UK is continuing to advance. It is expected that the eIDAS Regulation will be reproduced verbatim – or largely verbatim – into UK law following Brexit, whether or not the eventual outcome of Brexit involves a managed exit or leaving without a deal. During the Transition Period, which continues until 31 December 2020, the EU Withdrawal Agreement ensures that EU Regulations continue to apply, including the eIDAS Regulation.
It is unlikely that the UK Government will seek any significant amendment to the eIDAS Regulation, given that the regulation aims to create easier, safer and quicker ways for parties to carry out transactions on digital platforms. However, one should continue to monitor the UK regulatory environment in respect of esignatures as the UK approaches the end of the Transition Period on 31 December 2020.
DISCLAIMER: The information provided on this website is for your convenience and for general information purposes only. Nothing on this website is intended to serve as legal advice. Each country has the ability to change laws that oversea and govern electronic signature. these changes may be rapid, so DocuMega cannot guarantee that the information provided on this website in regards to laws in various countries is current or correct. If you as a Visitor to this website should need future guidance on these laws then you should consult with a local attorney for guidance.