E-signatures update – Law Society issues guidance

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E-signatures update – Law Society issues guidance

15 Aug 2016

We recently summarised the important new changes brought in by the Electronic Identification Regulation.

A copy of the guidance is available here. In summary the Law Society have offered some clear opinions as follows:

1. Execution “under hand” (i.e. a simple signature) – such documents can generally be executed using electronic signatures (subject to satisfaction of the relevant e-signature requirements as previously summarised);

2. Execution as a deed – again, such documents can generally be executed using electronic signatures.However, there are some difficulties around witnessing signatures and delivery of the documents which will need to be considered on a case by case basis;

3. Board Minutes, Members’ Resolutions and GM Minutes – these documents can be executed using electronic signature provided that, in the case of board minutes and members’ resolutions, they are delivered to the company in such a way that the identity of the person delivering the signed document is clear;

4. Admissibility – the English Courts will accept electronic signatures as valid unless sufficient evidence to the contrary is provided to challenge this assumption;

5. Originals and Counterparts – multiple originals of the same document can be executed in hard and electronic copy form interchangeably and there is no reason why a “wet ink” original is required in addition to an e-signature original;

6. Agreements including overseas parties – for agreements governed by English law, the usual rules will apply in relation to validity;

7. Some practical considerations – this guidance also highlights the following matters that should be considered before using an electronic signature:

  • Does the party using the electronic signature have capacity and authority to do so?
  • Is it clear the person signing the document electronically is supposed to be signing? Taking proper security measures should assist in providing certainty here.
  • Security of electronically executed documents – you should consider whether your IT Systems are sufficiently secure to store these documents.
  • Does the document need to be submitted to another party and, if so, is there any reason why they will not accept an electronic signature, (for example, the Land Registry and Companies House still require “wet ink” signatures for documents submitted to them)?
  • Where will the document be deemed to have been executed and could this have adverse tax consequences? This is particularly important when using cloud services.

If you would like any further advice on the use of electronic signatures, please contact a member of our Commercial and IP team on 0161 832 3434.

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