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When to use e-signatures

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With the Government guidance on social distancing still very much in play, electronic signatures (e-signatures) are being considered more and more by practitioners and clients alike in order to avoid, where possible, meeting or attending on others in person in order to have documentation signed.

So what is an e-signature and when can it be used?

What is an e-signature?

The Law Commission of England and Wales published a report in 2019 in which they outlined what can amount to a e-signature, which included:-

  • Clicking on an “I accept” tick box;
  • The header of a SWIFT message;
  • A name typed at the bottom of an email;
  • An individual using their finger, or a stylus, to sign their name on a tablet;
  • Scanning and pasting an electronic signature into an execution block of a document (depending on what that document is); or
  • Some form of secure e-signature.

Will my e-signature be valid?

E-signatures are now more common place than ever before and are held to be legally binding a valid way of executing various contracts and other documents (in some case deeds) as long as:-

  1. the person signing the document intends to authenticate the document i.e. they intend to sign and be bound by the document (and that this includes a person signing on someone else’s behalf);
  2. all other formalities required by law in respect of that document are satisfied (e.g. the signature being witnessed); and
  3. there is no specific legislation, clause in the contract itself, or any case law which states otherwise. 

This also means that e-signatures are admissible in evidence in legal proceedings.  This may be used, for example, to show the signatory’s intention to be bound by the document that they signed. 

If you are entering into a contractual relationship with an entity based outside of England and Wales, it will be important to consider that country’s requirements regarding the execution of documents and you ought to take legal advice before executing that document with an e-signature in case it is not legally binding in that jurisdiction. 

When can’t I use an e-signature?

Although the Law Society and the Law Commission have suggested the use of e-signatures for deeds, the Land Registry have re-affirmed its view that electronic signatures will not be valid when used on deeds evidencing registrable dispositions (e.g. transfers of land, a lease with a term of more than 7 years and a legal charge).

Other occasions where an e-signature may not be appropriate include:-

  1. Statutory declarations, affidavits or other documents required to be signed in front of a lawyer, notary or commissioner for oaths;
  2. Certain company documents which may require a “wet-ink” signature;
  3. Wills (see below).

Some documentation to be filed with HMRC previously required wet-ink signatures (such as stock transfer forms and Stamp Duty Land Tax forms.  HMRC has temporarily relaxed its requirements and will accept e-signatures whilst coronavirus measures are in place.

How can my signature be witnessed during this time?

For both e-signatures and wet-ink signatures, the requirement has usually been that the witness must be “in the room” at the moment that the document in question is signed.  However, the signature on a document needs to be made “in the presence of a witness”.  In present circumstances and with social distancing measures in place, this could extend to, for example, witnessing on the doorstep, witnessing through a window or over the garden fence.

Signing and witnessing Wills during the coronavirus pandemic

The execution of Wills must still be done in accordance with the requirements set out in section 9 of the Wills Act 1837. This sets out the well-known requirement that the Will is signed by the testator in the presence of two witnesses who also then sign the Will in the presence of the testator.

The fact that we are operating under 19th century legislation means that e-signatures are not a solution to the Wills conundrum. There have been discussions amongst practitioners as to whether Parliament will legislate to relax the execution requirements to something similar to those under section 11 of the Wills Act 1837, which enables those in active military service to make a valid Will outside of compliance with the requirements of section 9.  However nothing has happened in that regard yet and such relaxation of the rules would arguably create more problems than it solves. Some argue it would be a charter for the unscrupulous relative who wished to exercise undue influence on an elderly or vulnerable family member and would be likely to lead to many Wills being challenged for validity in the courts in the future.

There is no simple solution. If clients need to sign their Wills then, at the moment, it is extremely difficult to do so whilst complying with Government guidelines on restrictions of movement and social distancing. Having the Will witnessed by neighbours who can see the testator signing onthe doorstep, for example, might be a solution.  Be aware though that moving the Will to the neighbours to sign as witnesses risks, people being within two metres of each other. Placing the Will at some mid-point that is two metres away from each house and then each individual coming up one at a time to sign might be the best solution in unusual circumstances.

Witnessing over video link would not be acceptable as the witness is not in the presence of the testator. However there have been instances where solicitors have supervised the execution over video link. Provided there are two witnesses still in the presence of the testator then, again, this is likely to be an acceptable compromise.