Electronic signatures – the future for Lasting Powers of Attorney?
In a world where technology and online communications are ever increasing, could electronic signatures on Lasting Powers of Attorney (LPAs) be a thing of the future? If so, what are the pitfalls of signing such a legal document electronically?
In their 2014 consultation paper entitled ‘Transforming the Services of the Office of the Public Guardian: Enabling Digital by Default’, the Office of the Public Guardian (OPG) confirmed their ambitions to make LPAs fully digital. Nearly three years on, they are already making progress with partially digital LPA forms available online to be completed, printed off and then signed with wet ink. In the next phase of their development and after much consultation with the public, they hope to remove the need for a wet-ink signature and to enable an LPA to be signed electronically, simplifying the registration process and allowing the OPG to process an ever growing number of LPAs more efficiently.
Electronic signatures can come in many forms including: -
- An electronic representation of a handwritten signature
- A unique representation of characters
- A digital representation of characters i.e. fingerprint or retina scan
- A signature created by cryptographic means
To ensure that an electronic signature has the same level of certainty and authenticity as a handwritten signature, they must be unique to the signatory, created using means within a signatory's sole control and they must be capable of being directly linked to that relevant document so that any later changes to that document will be detectable.
When renting a property, you can already use electronic signatures, namely electronic representations of a handwritten signature. Whilst speeding up the process, the electronic signatures do not resemble our own wet-ink signatures. So what is the validity of such an agreement if ever challenged?
If LPAs are to become fully digital as proposed by the OPG, what are the potential pitfalls of signing such a significant document electronically?
During the course of the OPG’s consultation, respondents have highlighted the following major concerns: -
- Certainty – A handwritten signature can confirm the identity of an individual signatory, particularly when compared to a specimen signature, and offers added reassurance that the right person is signing and that the signature is authentic. By implementing less unique forms of signing i.e. typewritten signatures, it provides less certainty as to whether the person signing is the person they claim to be. This could also open up the potential for fraudsters to impersonate another for financial gain, particularly where they are close to that person and have an intimate knowledge of the details needed to complete an LPA for that person.
- Registration – whilst the OPG may be willing to accept electronic signatures as a valid form of signing, other organisations may not. When using the LPA on behalf of the donor, banks, building societies and third party organisations may reject the LPA if it is not signed using a handwritten signature, particularly when comparing to a specimen signature as a way of verifying a person’s identity.
- Witnesses – the OPG suggests removing the need for a witness with the function instead being fulfilled by a secure online ID assurance. Without the need for a witness, it puts already vulnerable individuals in a position where they could be abused by dishonest family members or fraudsters.
- Deterrent – a fully digital LPA may also act as a deterrent for those who would most benefit i.e. the elderly, individuals with learning difficulties. Consequently the number of LPAs could drop and could leave many individuals who have lost mental capacity without the support they need both financially and emotionally.
Despite their plans to go fully digital, the OPG has confirmed that paper copies of the form will still be available to print off and sign using a wet-ink signature, and there are no plans to remove this option in the future. If in doubt, take legal advice and print the form, signing as you normally would.
The OPG continues to consult with members of the public, legal professionals, charity organisations and members of the judiciary, exploring ways of making fully digital LPAs a reality without compromising on the certainty and security that the current LPA registration process affords. Further guidance will be published once discussions have concluded and further proposals are put forward.
For further information on electronic signatures or Lasting Powers of Attorney generally, please contact a member of the Succession and Tax team.