Witnessing Electronic Signatures Remotely

Technology has transformed the legal industry at accelerated speed and more organisations are using electronic signing platforms to execute their agreements and deeds.

But how can deeds be validly witnessed electronically in a remote setting?

The information in this article is set in a business context and we do not consider simple contracts which under English law do not need to be in any particular form.

Applicable legislation

• The Law of Property (Miscellaneous Provisions) Act 1989 (the “LPA 1989”) section 1(3), requires that for a deed to be validly executed, it must be signed by an individual in the presence of two witnesses who each attest the signature.
• The Companies Act 2006 section 44, provides that a deed can be executed in one of the following ways; (i) signed either by an individual in the presence of two witnesses who each attest the signature; (ii) signed by two directors; or (iii) signed by one director and the company secretary.
• Electronic Communications Act 2000 (the “ECA”) section 7 (1), allows for electronic signatures to be admissible as evidence in courts in England and Wales however, this does not confirm whether an electronic signature is legally valid.
• The Electronic Identification, Authentication and Trust Services Regulation 910/2014 (“eIDAS”) implemented by the EU sets out the framework for the legality of electronic signatures and only recognises qualified electronic signatures (“QES”). QES are electronic signatures that have a certificate issued by a qualified trust provider under eIDAS giving the signature the same validity as a wet ink signature. Qualified trust service providers are set out in the European Union Trusted Lists and are maintained by the European Commission, Adobe being one of them.

Will eIDAS continue to apply in the UK after Brexit?

eIDAS will continue to apply in the UK under the withdrawal agreement as it will become part of UK law with only minor changes to the terminology. However, UK cloud-based platforms that were registered as a qualified trust provider will cease to be recognised by the EU. This means that organisations should consider whether they can continue to use their UK cloud based providers where EU data subjects are concerned as any deeds or documents signed electronically may not be treated as legally valid and there may be issues with enforceability.

Law commission report on electronic signatures

The Law Commission launched a review of the law relating to electronic signatures which the government responded to in March 2020 confirming no proposals to introduce further legislation reinforcing the legal position on electronic signatures. The Law Commission has since published its final report on the 4th September 2020 summarising the following key points:

• the person signing the document must intend to authenticate the document and any other formalities required for execution are fulfilled;
• an electronic signature is admissible as evidence to prove or disprove the identity of the person signing;
• the report does not prescribe the signature to be in any particular form; and
• deeds must be signed in the physical presence of a witness who attests the signature. This is the case even where the person signs electronically.

Whilst the report is not legally binding it does conclude that a witness can electronically sign a deed provided the formalities around execution are satisfied.

So that electronically signed deeds witnessed remotely can be construed as being legally valid the conclusions from the Law Commission report are:

• the electronic signature process should be explained clearly to the witness;
• there must be the intention to authenticate the deed;
• the witness should be physically present and if witnessing remotely, then the video witnessing may provide a solution;
• a record of the video witness should be kept so it can be used as evidence;
• any other legal formalities relating to the execution of the deed must be satisfied (such as any specific requirements in the articles of association); and
• organisations should use a cloud-based platform that is a qualified trust provider listed on the European Unit Trusted Lists.

If the witness is unable to sign the deed at the time of witnessing, they should sign as soon as is reasonably practicable. This was confirmed in the case Wood v Commercial First Business Limited (In Liquidation) 2019 EWHC 2205 the High Court held that a mortgage deed was validly signed where a witness had not signed the deed at the same time as the person executing it or in their presence.

Signatories should also avoid asking close relatives (spouse, partner or a family member) to witness deeds, as a witness should be independent and have no personal interest in the deed.

There is the risk that the signee argues at a later stage that the deed was not witnessed by them and that it was signed by mistake or fraudulently. However, this risk can be mitigated by keeping a record of all documentation and correspondence such as emails as evidence to demonstrate the intention to create the deed.

The information here does not constitute legal advice.