The uncertainties of using electronic signatures in legal services are arising from the technology reliability and security practical issues. There is a growing demand to recognize effective and acceptable methods to sign legal documents via electronic signature.
The Law Commission was ordered by the ministry of justice to find all the problems associated with electronic signatures. The commission was also requested to come up with measures and legislative reforms to address all problems associated with the use of electronic signature services.
In January 2018, the Law Commission launched a project to find a solution for the uncertainties arising from the use of formalities and eSign execution through the adoption of electronics signing in the legal services sector.
This is because the Law Commission realized that people didn’t have clarity on the use of electronic signatures. The project was to cover a wide scope of legal documents that should be signed using the e-signature solution. The commission was also supposed to focus on how contracts should be executed.
Law Commission findings
After the project, England and Wales Law Commission authorized the use of electronic signature solutions for legal services.
This is because the Law commission believed that digital signatures have similar legal binding features like that to handwritten signatures. The law commission also stated that electronic signature legal services will still be valid even if it’s a single click or typing a name to authorize a legal document.
The commission opened consultations to find out whether there will be a need to form new legislation for the validation of e-signatures.
For an electronic signature to meet statutory requirements, people should demonstrate authenticating intentions through the required case law and statutes.
Why were eSignatures legalized by the law commission?
1. To simplify documents Signing through digital signatures
The commission’s legal advisor stated that the e-signature is a revolution that can allow people to be able to sign any legal document that previously was signed using manual signatures.
The use of e-signature brings a revolution in digital technological transformation on techniques used to sign documents. Example of legal documents that can be signed using e-signature includes property sales, credit agreements, and even power granting to legal attorneys.
2. E-signatures in businesses
The commission found that many businesses were not comfortable with electronic signatures since they preferred using handwritten signs when signing legal agreement documents over e-signature.
This is because the business owners believed that there might be legal challenges associated with the use of digital signatures to sign legal documents. For instance, is when an organization demand handwritten signature from the clients and then scan them electronically to gain the scanned copy. The commission described this act as monotonous and inefficient practice.
Digital signatures are flexible and they have the ability to satisfy the legal requirements that might be needed in the business. Also, the digital e-signatures legal department increases the potential of the businesses to have quicker transactions with their customers.
• Modes of signing
Through the various court of appeal legal precedents, many modes of signing using digital signatures have been developed. The authenticated mode of signing through the electronic signature includes:
- Typing the name on a keyboard
- Using a finger or a digital pen to touch-sensitive screens
- Clicking on a website on a given option like “I agree”
- Use of video link and webcam to sign in a case where there are witnesses who are supposed to sign through signatures affixing. There is a proposal to use the webcam in business to increase convenience, faster transactions,s and business growth.
3. Signing sensitive documents
In recent years, there has been high substantial disagreement on whether digital electronics are valid to be used to sign sensitive legal documents like contracts and land title deeds.
Lasting powers of Attorney
In 2013, England and Wales’s government had a proposal to form Lasting Powers of Attorney (LPAs) online. The proposal received a strong rejection from many professional bodies which made the proposal to be dropped.
In 2016, a practice note was published by the law society which entailed commercial e-signing in both countries. However, no comments or opinions were provided to provide the validity of the practice note.
In addition, the Financial Conduct Authority released a discussion paper that focused on the use of electronic signatures by elderly persons and the use of LPAs online. The paper encouraged registering and storing of LPAs online without the use of handwritten signatures.
Through the Law Commission’s guidance, the U.K government was able to approve new digital signatures regulations which allow the HM land registry to accept transfers and mortgages through the use of electronic signatures. The government’s aim was to convey online transactions via their secure website. This was to encourage verified e-signatures mechanism services to all consumers.
Practical electronic signatures considerations
The law commission’s electronic signature confirmation positively impacted the adoption and wider use of the technology. This is because the technology will pave way for a more secure, efficient, and secure transaction in the legal sector. An example where there was the use of electronic digital signatures for legislative reasons comprised the Frauds statute and the Law of Property Act.
However, there might still be some technical and practical issues arising from the use of electronic signatures. Some of the issues that remain of concern in the adoption of eSignatures include:
- Identity and trust
- Electronic signatures interoperability systems
- Information archiving.
In addition, one of the challenges that will affect the use of electronic signatures among businesses is that there are some documents that are legally required to be signed with wet ink. This is because there are some registries in the business sector that don’t accept any kind of digital signatures.
The solution to this problem is the establishment of a working industry group. Such groups will be able to consider any challenge that may arise from the use of electronic signatures in the legal services sector. This will then create more confidence in people and businesses in the adoption of electronic signatures.
The use of eSignature for a legal agreement is a digital transformation that will bring a lot of impacts to the legal services sector. The benefits outweigh the negative outcomes and therefore governments should take the challenge and possess the technology.