Law Commission confirms validity of electronic signatures

The Law Commission has confirmed that electronic signatures can be used to execute documents and are, in most cases, a viable alternative to handwritten ones.

Businesses and individuals are already using electronic signatures on contracts every day. But despite this frequent use, the Commission found that some parties still have doubts over whether an electronic signature can be used in particular situations.

In its report, the Law Commission sets out a simple statement of the law to end that uncertainty and increase confidence in the use of this technology. The Commission’s view is based upon legislation and court decisions which relate to both non-electronic and electronic signatures.

Commercial and Common Law Commissioner, Stephen Lewis, said: “Electronic signatures can offer quicker and easier transactions for businesses and consumers. Our report aims to provide an accessible statement of the law which makes it clear that an electronic signature can generally be used in place of a handwritten signature as long as the usual rules on signatures are met.”

An electronic signature is capable in law of being used to execute a document – including a deed – as long as the signatory intends to authenticate the document and any relevant formalities, such as the signature being witnessed, are satisfied, the report says.

Under English common law there has always been flexibility in recognising a range of types of signature including signing with an “X”, initials only, a printed name, or even a description of the signatory such as “Your loving mother”, the report notes, while courts have also accepted electronic forms of signatures including a name typed at the bottom of an email or clicking an “I accept” tick box on a website.

These court decisions supplement the European Union Electronic Identification and Trust Services Regulation (eIDAS) regulation, which states that an electronic signature cannot be denied legal validity simply because it is electronic.

The Law Commission has made recommendations to address some of the practicalities of electronic execution and the rules for executing deeds, including the creation of an industry working group ­­to consider practical and technical issues around electronic signatures and provide best practice guidance for their use in different types of transactions.

The industry working group, the Law Commission said, should look at solutions to the practical and technical obstacles that exist to video witnessing – and calls for the government to consider legislative reform to allow for this.

It also recommends a future review of the law of deeds to consider whether the concept remains fit for purpose and for the government to consider codifying the law on electronic signatures.