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COVID: Pressure On Legal Clarity For E-Signatures In Some Sectors

Posted 8th April 2020

What Are The Legalities Behind E-Signatures?

In an ever-increasing digital world, our lives are becoming more and more digitised and there are numerous questions that go along with that. If I sign a digital document is it legal? What kinds of documents can an E-Signature be utilised on? What is the purpose of an E-Signature compared to the traditional pen on paper?

With the global pandemic putting a strain on the way we do business the physicality of obtaining signatures has put pressure on the legalities coming into line with the digital age.

Clarification Over The Legality Of E-Signatures

Whilst electronic signatures are common practice for many businesses and sectors some areas have been slow to recognise them. COVID-19 has brought forward the release of information around frameworks regarding E-Signatures and how they will help business continue to transact.

“We acknowledge the significant challenge firms are facing in the current environment,” the FCA said in its latest coronavirus update for firms that it regulates.

‘Funds management companies can delay publication of annual reports and use electronic signatures for approving documents during the coronavirus pandemic.’ Financial Conduct Authority April 2020

The pressures are highlighting the need for authorities to bring forward the legal ramifications of some electronic signatures and more guidance on this issue is coming out across many sectors and countries.

‘New guidance on electronic signatures (E-Signatures) can help businesses continue to transact during the coronavirus crisis’ an expert has said.

The law society of Scotland has brought forward their working paper on E-Signatures with guidance on how and when they can be used.

“With COVID-19 impacting businesses in so many ways, getting things signed is just another thing that becomes a little more difficult. Electronic signatures can very much help here and the Law Society of Scotland’s guide is timely and practical” Fiona Alexander – Senior Practice Development Lawyer

This year, in early March, the UK Lord Chancellor confirmed the legality of E-Signatures with a written Ministerial statement clearing any lingering doubts over the issue.

‘’ Documents signed electronically – even when a statutory requirement for a signature predates the digital age – have legal force in England and Wales, the lord chancellor said today in a long-awaited confirmation of the law. The written ministerial statement was confirming the conclusions of last year’s report by the Law Commission, which itself had sought to clear any lingering doubts over the issue. In its 124-page study of statute, common and case law the commission found that in ‘most cases’, electronic signatures are capable in law of executing a document (including a deed) provided that the person signing intends to do so and that any further required formalities, such as a witness, are satisfied.’’ Law Society Gazette 3rd March 2020

The Isle of Man FCA is also looking to release information regarding changing the legislative framework around electronic signatures

And whilst the validity of some documents still need a physical signature these will no doubt eventually become electronic.

The Future

The electronic signature market is a billion-dollar industry so there is no doubt that any and all forms of physical documentation are rapidly decreasing due to security, physical storage, quality and proficiency.

Meanwhile using the digital realm for the purpose of efficiency and security with electronic documents, especially those needing signatures, is growing at a rapid rate and with the confirmation of their validity, this will expand even quicker. With the spotlight focused even more because of COVID-19 we are seeing this happening sooner rather than later.

To find out more about how to sign digital documents or if you want to implement a system within your business, E-Sign are here to help. We work with a large range of different industries and have the experience and knowledge to adapt a solution for your business. Get in touch with us today we’re more than happy to answer any questions.

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