Social Housing Speed Read – The electronic execution of documents

If business is to be conducted entirely via digital means, it is necessary that documents executed electronically are actually legally enforceable. Digital working can lead to an increase in efficiency but many organisations are reluctant to execute documents electronically due to the uncertainty surrounding the legitimacy of the final document. The uncertainty is compounded because there is no single source which contains the applicable law. By way of assistance, the Law Commission published a report on 4 September 2019 outlining their research into this area.

The Law Commission conclude that English law does indeed allow for the execution of a document by electronic means provided that the person signing the document intends to authenticate the document and that any other applicable formalities are satisfied (e.g. that the signature is witnessed). However, this is a general proposition. An electronic signature would not be valid where the law prescribes that a document specifically requires a hand written signature.

Where a specific form of signature is not prescribed, the report notes that the courts have previously accepted a number of different electronic signatures. This has been in cases involving a statutory obligation to provide a signature but where the statute has been silent as to whether an electronic signature is acceptable. For example, in Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd, it was held that a name typed on an email was intended as an authenticating signature and therefore constituted a valid execution of the document. Furthermore, in the Kathryn Bassano v Alfred Toft case it was held that a typed name generated by clicking an “I accept” button was a valid signature. As a result, the Law Commission believe that it is likely that most electronic equivalents of a signature will be accepted. However, this has not been tested rigorously in the courts at present.

As a result of their review, the Law Commission have recommended that an industry working group should be convened by Government to address the practical issues that this area raises. They have also recommended that Government consider codifying the law on electronic execution into a single source. This would certainly address the uncertainty surrounding the area. However, at present, it appears that the law does indeed allow for the use of electronic execution but until judgments are passed down by the courts or Government codifies the law, uncertainty will remain.

Furthermore, the Law Commission have taken the view that the execution of a deed requires the physical presence of a witness no matter if the deed is being executed electronically or non-electronically. To address this fact, the Law Commission have recommended that the Government consider reforming the law of deeds to allow for video witnessing of signatures. Clearly, this area of the law will continue to develop as digital working becomes more prevalent and attention must be paid to any future reforms.

The Law Commission’s Electronic Execution of Documents Report can be found here.

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.