Electronic Execution of Deeds under Review

The Law Commission is reviewing the difficult subject of the electronic execution of documents, and in particular deeds.

In principle all legal documents should be capable of electronic execution, but some doubt remains about the position regarding deeds in view of the statutory requirement for deeds to be witnessed.

This is a point of particular significance to invoice financiers, since invoice finance agreements normally contain a power of attorney which must be granted by deed and some security documents are normally granted by way of deed.

At present there are different opinions amongst commercial lawyers as to the extent to which deeds can safely be executed by electronic means, but the practical difficulty of satisfactorily establishing and proving the identity of the signatories has deterred most invoice financiers from pursuing the electronic execution of deeds under the law as it now stands.

The Law Commission has issued an interesting consultation which sets out its preliminary view that the requirement of a witness to a deed should remain, but that it should be possible for a witness to observe an electronic signature by video link and then attest the document by affixing their own electronic signature to it.

Invoice financiers and their lawyers will be watching these developments with interest, though it is unlikely that any forthcoming proposals will attract immediate legislative action by the Government.