Virtual execution and e-signatures during the time of COVID-19

An authenticated electronic signature can be used to execute documents, including deeds and can be much more secure than its “wet” (hard copy) predecessor. The Courts have said in the past that a simple ‘X’ can in certain circumstances constitute a valid and binding signature, but there is still no definitive statement from a Higher Court upholding electronic signatures. We’re waiting for legislation or at least a review, but this probably won’t happen until after lockdown.

Wills, HM Land Registry and Companies House have their own electronic signature rules, ditto anything that needs to be notarised and sent abroad. HM Land Registry will accept deeds signed and witnessed in pen and then scanned or photographed to produce a PDF, JPEG, PNG which is then emailed to a conveyancer/solicitor (Mercury decision). This doesn’t quite square with section 1(3) of the Law of Property (Miscellaneous Provisions) Act 1989 which still requires physical witnesses. Wills however cannot be signed by electronic signature and still need to be signed in the presence of two witnesses.

The Government’s position earlier this year was set out by the Justice Secretary: “businesses and individuals can feel confident in using e-signatures in commercial transactions” and “electronic signatures are permissible and can be used in confidence in commercial and consumer documents”. He didn’t say that electronic signatures couldn’t be used for deeds. The reality is that we are currently using electronic signatures quite widely as consumers, and in business many multi-million pound contracts are executed via e-signature and have been for a few years in some sectors. Paperless is a viable goal and ironically Covid-19 has helped speed up the move away from hard to soft copies.

So, in summary, we’re generally using virtual execution and e-signatures right now. The law just needs to catch up with what people and businesses are actually doing.

For more information on Battens' Business Services, please contact Brian Levine, Head of Media and Entertainment on 01935 846258 or email brian.levine@battens.co.uk