The future of electronic signatures

11th November 2019

As technology speeds up transactions there is still one part of a transaction that it has not changed being the signing of deeds via electronic signatures. Pressure is growing for change and here we consider some recent developments in this area.

Differing Views on Electronic Signatures

The Law Commission’s stance is that e-signatures could be used to execute a document as long as the signor demonstrates the required intent and the legal formalities have been satisfied. However, the Land Registry has voiced its concerns regarding electronic execution. Whilst it accepts contracts electronically signed as they are simply noted on the title itself, the execution of deeds must still comply with the statutory formalities. The reason for their reluctance to adopt the Law Commission’s approach is twofold.

  1. It argues that e-signatures cannot be witnessed in the same manner as ‘wet ink’ signatures and therefore they must be certified; and
  2. More importantly, it advocates a system which requires an advanced e-signature alongside an additional authentication process carried out through the system.

Though, it is worth bearing in mind that the Land Registry are considering amendments to its rules to allow for more e-conveyancing, including registered dispositions under the Land Registration Act 2002. Services, such as ‘Sign your mortgage deed’ which recently announced that it had digitally signed and registered a total of 1000 re-mortgage deeds, signals how execution could change in the future.

Input from the Court

The recent case of Neocleous v Reus has shed a potential light on the direction in which electronic execution may go in the future. The Court held that the presence of a name in the footer of an email along with the use of ‘many thanks’ showed a clear intention to associate the sender with the email and authenticate it as well. By taking an objective view as to what the ordinary person would consider to be ‘signed’, practitioners alike could encounter issues when corresponding with their opposing parties.

Electronic Signatures Conclusion

It seems only a matter of time before there is an ability for deeds to be executed electronically. It is more a question of which method the government will decide to implement be it a system based on the recommendations of Law Commission or be it a system based on suggestion from the Land Registry.

For more information regarding electronic signatures and the signing of deeds, speak to our expert Real Estate lawyers.

This article has been co-written by Euan Mitchell and Rishin Patel.

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