The introduction of social distancing measures following the outbreak of Covid-19 has seen the majority of the UK workforce shift to working from home. Whilst the majority of work and transactions continue to take place remotely without difficulty, any work or transaction that would usually require a “wet ink” signature has suddenly become somewhat of a logistical nightmare. Organisations have had to adapt quickly, and government bodies are no different. HM Land Registry announced on 4 May 2020 that they are temporarily accepting the ‘Mercury’ signing approach for deeds in relation to conveyancing, however this approach still requires a “wet ink” signature in the physical presence of a witness, who must also provide a “wet ink” signature. This means that anyone without access to a printer or suitable and willing witnesses may still be left adrift. Electronic signatures might, in such cases, provide a solution.
Prior to the Covid-19 outbreak, the Law Commission had already addressed the gulf between UK law and technological developments in addressing the need for more efficient and convenient methods of executing documents in the digital age. Their report “electronic execution of documents” was published on 4 September 2019, and the UK government indicated its agreement with their legal conclusions in March 2020, undertaking to establish an Industry Working Group to consider issues of security and technology. So what does this mean for those of us who are not currently able to execute documents in the traditional way?
The Law Commission Report confirmed that an electronic signature would constitute valid execution of a document, as long as there was a clear intention on the part of the e-signatory to authenticate the document they are signing, and any formalities required by law are complied with (such as execution of documents as deeds in the presence of a witness). This means that parties can enter into simple contracts by simply typing their name into the document, or even at the end of an email. Where documents must be executed as deeds, companies also have the unique benefit of circumventing the need for a witness to be physically present by affixing the company’s common seal or by having two authorised signatories sign (electronically).
Evidence in legal proceedings
The Courts have also taken a pragmatic approach to the use of electronic signatures as evidence in legal proceedings, and particularly in the current climate, where hearings are taking place remotely. The Courts have previously accepted as valid signatures a name typed at the bottom of an email, an ‘X’ and unambiguous descriptions of the signatory such as “Your loving mother” or “Servant to Mr Sperling”. Following section 7 of the Electronic Communications Act 2000 (ECA 2000), an electronic signature within an electronic document or communication will be accepted by the Courts at face value as authentic, unless evidence is presented to the contrary.
The major sticking point for electronic signatures at present is in the valid execution of Wills. In these unprecedented circumstances, many people have realised the importance of having a Will in place to ensure that their loved ones are provided for in accordance with their wishes in the event of their death. This has resulted in a surge in demand for private client solicitors to draft Wills for their clients which must be validly executed within the constraints of “lockdown” conditions.
Section 9 of the Wills Act 1837 states that for a Will to be valid, it must:
- Be in writing, and signed by the testator, or by some other person in their presence and by their direction; and
- It appears that the testator intended by their signature to give effect to the will; and
- The signature is made or acknowledged by the testator in the presence of two or more witnesses present at the same time; and
- each witness either—
- attests and signs the will; or
- acknowledges their signature,
- in the presence of the testator (but not necessarily in the presence of any other witness)
Although the Law Commission considered that it should be possible for a Will to be validly executed by electronic signature if the witnesses were physically present, there was notably less confidence in the possibility of a Will executed and witnessed electronically (i.e. the witnesses view the testator’s signature via video link) being held to be valid. This is because although the law as stated is unclear as to whether “presence” must strictly be physical or if it can be remote, the safeguards against undue influence and abuse that physical witnessing provides is incredibly important.
The validity of a Will can be challenged on a number of grounds, to which Wills executed in the current climate may be more susceptible:
- Lack of proper formalities - i.e. fulfilling the requirements of section 9 of the Wills Act 1837 as set out above. A Will executed and witnessed electronically is particularly vulnerable to challenge later on.
- Undue influence or fraud – there is a very high threshold of proof required, although it is not necessary to establish that force was used. Generally, it must be proved that the person making the Will was influenced to the extent that their free will was completely oppressed. It will be more difficult in the current circumstances, even with the benefit of video conferencing, to ensure that there has been no undue influence without physical presence. The current limitations may also make it easier for fraud to take place.
- Lack of testamentary capacity – where the testator did not understand that they were making a will and did not have the necessary mental capacity to do so. Although this is not something to be determined by the means of execution, the need for solicitors to take instructions remotely has created its own difficulties in assessing the testator’s capacity.
- Lack of knowledge and approval – the testator must have known and approved the contents of their will and appreciated the extent of what they were giving to whom. This is closely linked to testamentary capacity and again may be a point of challenge to the validity of Wills executed at the moment where instructions are given remotely and testators may have difficulties viewing or understanding draft Wills in electronic form.
Therefore, it is still best practice in the UK to execute Wills, with a “wet ink” signature, in the physical presence of two witnesses (note that neither witness should be a beneficiary under the Will being signed, or the spouse of any beneficiary), who also attest that signature with their own “wet ink” signature.
The British Virgin Islands
The Electronic Transactions Act, 2019 states that where a law or agreement requires a signature, an electronic signature will be sufficient as long as it is as reliable as appropriate for the purpose for which the electronic communication was generated or communicated, in light of all the circumstances.
A party cannot, however be required to use or accept electronic signatures, so the use of electronic signatures should be agreed prior to the signing of the document.
There are, however, exceptions to this where an electronic signature will not be valid, including:
- a Will or testamentary instrument;
- the conveyance of real or personal property or the transfer of any interest in real or personal property;
- indenture, declaration of trust or power of attorney; and
- any other thing required to be done by deed.
The Electronic Transactions Law (2003 Revision) states that an electronic signature will be valid subject to it being as “reliable” as is appropriate for the purpose for which the document signed was created, and to otherwise meeting any applicable statutory requirements for the execution of contracts.
Interestingly, the burden of proof in the event of a dispute as to the authenticity of the electronic signature lies with the person seeking to rely on the signature.
Wills and other testamentary instrument, as well as the revocation or variation of the same, are however excepted and must still be executed with a “wet ink” signature.
The Electronic Transactions (Guernsey) Law, 2000 states that if a law, whether statutory or customary, requires a signature, a signature in electronic form satisfies the relevant law. However, as in the British Virgin Islands, a party cannot be compelled to execute or accept documents with an electronic signature, so prior agreement is necessary.
The Electronic Transactions (Exemptions) Order, 2001 does however set out some exceptions, including:
- Wills, codicils or other testamentary instruments;
- Declarations of trust, powers of attorney or any documents required to be sealed;
- Conveyances of real property or transfers of any interest in real property, or leases of real property; and
- Affidavits or statutory or sworn declarations.
Electronic signatures are generally given effect under Jersey law, subject to a few exceptions. Emergency legislation has recently been introduced to allow the remote witnessing of Wills. The Covid-19 (Signing of instruments) (Jersey) Law Regulations 2020 ( Regulations) which came into force on 23 April 2020 allows Wills to be witnessed by video link where all witnesses and the testator can see one another so as to positively identify the person signing the Will, can see the testator signing the Will, and be satisfied that the document being signed is in fact the Will.
Where the Will deals with land, each witness and the testator must also hear, at the same time, the Will read aloud to the testator in its entirety before it is signed. The witnesses must then provide a written declaration to the testator or the Will drafter after it is signed. These Regulations will be in force until 30 September 2020.