The Future of Electronic Signatures in Conveyancing
Abagail Witts – Residential Legal Assistant
Following a report in 2019 by the Law Commission, which concluded that electronic signatures were valid for legal processes, an interim report has been issued by the Industry Working Group outlining their recommendations for future analysis and reform.
The new report, implemented by Lord Justice Birss, Justice Fraser and Professor Sarah Green, concludes that the approach towards electronic signatures must be developed with clarity, simplicity, and security. Any legal reforms need to be simultaneously developed with technological advances. The report takes the view that electronic signatures should be used on a wide scale and members of society should have confidence in doing so.
The impact of the recent pandemic has demonstrated that our technology can is capable of supporting a system of electronic signatures and catapulted society to the realisation that physical presence is no longer strictly necessary.
The eIDAS Regulation (EU Regulation 910/2014) distinguishes between three levels of electronic signature:
- Simple – No identity verification required.
- Advanced (AES) – Shows evidence of tampering and links to the signatory’s ID.
- Qualified (QES) – As well as the requirements of the advance it requires the burden of proof and has a special legal status.
The biggest risk with electronic signatures is security.QES is the most secure type of signature, but presently the current legislation is complex and has detailed requirements such as verification by a ‘Qualified Trust Service Provider’ which can make the process complicated for the signatory and the receiver. In some European countries, where QES is government backed, the process is much easier and commonly accepted. The UK Government is working towards a digital identity and attributes trust framework, which aims to:
- Show what ‘good’ digital identities look like
- Establish governance function to enforce these rules and keep them up to date with technology.
- Develop proposals to remove legislative blockers on the use of secure digital identities.
What does this mean in practice?
If you have recently carried out a transaction with our Residential department, you will know that we require official documents (Contract, TR1, Deeds) to be provided with a ‘wet-ink’ signature. HM Land Registry do accept electronic signatures and have done so since 27th July 2020, but it is still now widely accepted as part of the conveyancing process due to the confusion over certification and requirements. The concern currently is that if an electronic signature were accepted, but then queried by the Land Registry upon registration, this would make the registration process slower and the requisitions may be difficult to answer. Both solicitors on each side of a transaction would have to agree to adopt electronic signatures at the outset of a transaction and until the culture of electronic signatures is more widely used and trusted, it is likely that wet signatures will continue to be required. If one solicitor is in agreement, but the other is not, then a transaction cannot proceed on the basis of electronic signatures.
Section 91 of the Land Registration Act (2002) sets out the requirements for making an electronic document. HMLR are presently trialling accepting QES electronic signatures on documents that require a witness (TR1/ Deed/ Lease) with a handful of Conveyancers. Aside from the requirement for ID verification, there are certain conditions which are being trialled in this process:
- The need for the physical presence of the witness
- A One Time Password for authentication for both signatory and witness.
The results of this will be published after the trial. Any result which rules that electronic signatures could be used in this way in practice, would surely change the way that our transactions work.
Bright Solicitors is embracing the advances in electronic signatures, and we are currently implementing a new ECOS system for completing initial documents. Facilitated through our search provider, InfoTrack, ECOS means that clients have the option to complete all initial documents and ID verification online. This went live a few weeks ago and has so far been very successful.
If you want to carry out a Conveyancing Transaction and wish to know more about our ECOS system, please contact a member of our Residential Team.