Electronic execution of Documents: industry working group final Report

The Industry Working Group on Electronic Execution of Documents set up by the Government in response to the 2019 Law Commission Report has published its final report.

The Report deals with a number of issues including an exhaustive analysis of the issues arising from cross – border transactions, but it also includes a comprehensive analysis of how potential solutions to the use of electronic signatures generally could protect signatories to Deeds from potential fraud.

It is interesting that this exercise involved the Report pointing out at several stages that a considered and nuanced use of appropriate technology could in some respects actually improve the protection of signatories of Deeds far better than the mere current requirement of the presence of a witness.

In this regard the following points made in the report are worth noting:

• Advice stage. The giving of advice, consultative interactions and verbal agreements can be captured by electronic platforms and retained to provide further reassurance to the parties and their representatives that proper processes have been followed, and may help to establish intention and understanding.
• Signing. The use of technology can allow for better record keeping, and the collection and preservation of evidence of the signing process. Platforms can also be configured to ensure all the requisite steps are followed before the document can be submitted. E-signing can provide additional independence for individuals in the process of signing and may feel less pressured where they are not physically supervised by an individual throughout the execution process.
• Time limits and rejection. Use of an e-signature platform can allow for time limits to be placed on the signing, or for signatories to reject the Deed by confirming this via the platform, thus limiting the scope for physical witness coercion or duress placed on the potential parties.
• Accessibility. Electronic signing platforms ensure Deeds are accessible and legible on a range of devices, allowing parties to review them fully and easily in advance of signing, taking into account their specific needs.
• Access to information. Platforms allow for security of data to be maintained, and parties are therefore less vulnerable to misuse by others.
• Identity in electronic execution of Deeds. In the context of identity fraud, the report highlights a number of frameworks currently being developed, including the UK Digital Identity and Attributes Trust Framework, the objective of which is to ensure a standard for identity verification that can be applied across the whole UK economy.

Recommendations for reform

The Group’s recommendations for further consideration by the Government include:

• Introduction of a set of minimum standards to bolster the integrity of, and public confidence in, the e-signing experience and process, which should be done together with consideration of whether certification or self-certification should be introduced.
• Uniformity of approach to e-signing and online identification by way of an international standard or mutual recognition.
• Further review by the Law Commission of the law relating to Deeds, and in particular the formalities surrounding the execution of Deeds.

Whilst further progress in practical terms is unlikely in the foreseeable future, it does seem that the direction of travel is in the right direction and eventually financiers will benefit from any future reform.

Contact our Invoice Finance team.