13 Jul Electronic signatures: Business as ‘unusual’

The impact of COVID-19 is forcing businesses to evolve and adapt.

Electronic signatures are not a new mechanism but have come under the spotlight in the current climate. The general position is that electronic signatures are valid under English Law, with this jurisdiction taking a principled approach to their use. Provided that the person signing intends to authenticate and be bound by the document, and any associated formalities in relation to execution are satisfied, then the signature is effective.

There are a range of methods that can be used including; email signatures, inserting a digital image into a document, applying a typescript signature, use of an e-signature platform and cryptographic systems that have the facility to include a message to confirm integrity. It is important to recognise that not all electronic signatures will have the same evidential weight or will be sufficiently secure, reliable, and resistant to fraud.

The appropriate method of execution will depend on the applicable fact pattern. Relevant factors include the governing law of the document, the type of document that is to be signed, the form of electronic signature intended to be used and any cross-border implications. It is crucial in any transaction to plan ahead to ensure that all the mechanism for signing is agreed and can be accommodated by all parties.

There will be circumstances where a wet ink signature is required, and the use of an e-signed document is not appropriate:

  • Documents which are registerable with the UK Land Registry;
  • Documents where the place of execution is important, or if there are any restrictions in case law or legislation that apply to the document.

In the same way as for wet ink signatures, any necessary signing formalities must be complied with. For example, if the document is a deed, it must be executed in whole. If the document needs to be witnessed, the witness must be physically present – socially distanced witnessing is acceptable as long as the witness has clear sight of the signing (e.g. through a window).

Companies House and HMRC have temporarily changed their policies in response to COVID-19 and are now accepting all documents including forms and resolutions that bear electronic signatures. If execution is important, share transfers for example, we would suggest that it remains good practice to try and accommodate wet ink.

This article is intended to be a high level overview and should not replace obtaining bespoke legal advice. If you require further information in respect of electronic signatures or any other aspect linked to COVID-19 please do not hesitate to contact Laura Nelson at Croft Solicitors on 01242 285855 or email laura.nelson@croftsolicitors.com.

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