Electronic Signature Law in the UK
Legalesign eSignature Meets the eIDAS Standard for a Legally Binding Advanced Electronic Signature.
Latest
On 1st February 2022 the Industry Working Group on eSignatures (managed from the Ministry of Justice) published its Interim Report. The consultation that arose from that has now finished and the final report is awaited. Click here for the interim report.
On the 18th June 2020, the Law Commission updated their guidance on electronic signature to include tips on how to operate in practice. The note is targeted at legal professionals. Part of the cause has been the uptick in electronic signature use during the coronavirus crisis. We will have more analysis on this shortly. For more information on the update, click here to go to the Law Society's page on its updated position.
EU law
The governing legislation across Europe is known as 'eIDAS', or fully named 'EU Regulation 910/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC'.
Since eIDAS is a 'Regulation' it required no legislation at a national level and came into force on 1 July 2016. In the UK, eIDAS superseded the Electronic Communications Act 2000 which was an outcome of EU Directive 1999/93/EC. eIDAS itself says it "enhances and expands the acquis of the Directive".
eIDAS entrenches past commitments that underpin electronic signature in Article 25.1 with the provision that an electronic signature "shall not be denied legal effect and admissibility in legal proceeding soley on the ground that is it an electronic form or that it does not meet the requirements for qualified signature".
eIDAS sets outs two new standards for electronic signature, 'Advanced' and 'Qualified'.
'Advanced Electronic Signature' is defined in Article 26 and it is worth seeing in full:
An advanced electronic signature shall meet the following requirements:
1. it is uniquely linked to the signatory;
2. it is capable of identifying the signatory;
3. It is created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; and
4. It is linked to the data signed therewith in such a way that any subsequent change in the data is detectable." (see note on PDF Certification)
Legalesign offers 'Advanced Electronic Signature'.
‘Qualified’ signatures require enhanced identity proof, usually with a physically held device that uses ‘public-key infrastructure’ technology (PKI). The personally held device, with eIDAS's set of regulations on issuance and trust, provide a framework to add a strong level of authentication and encryption.
In the UK, Qualified Certificates are largely unused because there is no practical way to access and apply them. They are better understood in EU countries where there is a national ID scheme, for example in Spain and Estonia. Citizen IDs can become a ‘qualified certificate’ and thereby provide an avenue for Qualified Signatures to be rolled out and adopted across a whole population. The prospect of other devices, especially mobile phones, being used for ID proofing is not unfeasible. So far the UK has resisted the introduction of ID cards for its citizens, but there is continual pressure for it.
Although not widely used in the UK there are examples of Qualified Certificates in special cases. The Registrars of Scotland (ROS) issue them to lawyers for the ‘e-conveyancing’ of property contracts and they have been behind Scottish legislation to bring forward electronic signatures for certain property transactions.
For those researching levels of authentication in connection with electronic signature in the EU we recommend reviewing the ENISA work on trust standards.
UK law
The main piece of UK law from Parliament was the Electronic Communication Act (2000) but this is now effectively replaced by eIDAS. The further considerations around electronic signature are i) common law and ii) specific regulations. There are many contract-specific regulations (e.g the Consumer Credit Act 1974) and these can have an impact on whether and how electronic signatures should be used in those cases.
In parallel to EU law, and unlike other EU countries, the UK legal system also has a common law element that for centuries has been the basis for contract validity. A contract can be formed orally, for example, but must include certain elements to be legally enforceable including an offer, an acceptance, an intention to create legal relations, certainty over terms, and various other factors, for example that the objects of the contract are legal.
England & Wales
The Law Society of England & Wales has produced an authoritative practice note on the common law underpinnings to electronic signature.
Click here for the Law Society practice note on the execution of a document using electronic signature.
If you are researching electronic signature in depth, the earliest related case law we have found is Hull vs Cognos industrial tribunal, the first example of a case with a contract signed by email.
Scots Law
Scots case law has a broadly similar approach to that in England & Wales. i.e. that contracts can be formed based on a set of principles, for example, similar to the English principles of intention and certainty, Scots Law understands ‘consensus in idem’, that is, there must be an essential understanding between parties as to the terms of the contract. Businesses operating under Scots law should however pay particular attention to the Requirements of Writing Act Scotland (1995). This legislation can restrict electronic signature where it might otherwise be used in England & Wales. But The Electronic Documents (Scotland) Regulations 2014 does gives advanced electronic signatures validity in the context of the Requirements of Writing Act. As yet there has been no practice note released by the Law Society of Scotland on electronic signature, in particular for its use with ‘probative contracts’ (the Scots equivalent to an English ‘deed’), we will update this page as soon as more guidance is available.
Other notes
We recommend businesses taken their own legal advice on their contract handling. For example, you may need to inform your signers that they have a ‘cooling off’ period (Legalesign has a place where you can add that text). Some contracts may need to be delivered to become effective so you need to make sure Legalesign email delivery is switched on and PDFs are attached. Some contracts may not be able to be signed by electronic signature. As far as possible Legalesign’s default settings will give the strongest legal offering. But individual sectors and contracts will have their own regulations to consider.
United Nations Commission on International Trade Law (UNCITRAL)
An important body of background thinking on electronic signature and trust services is being developed by the United Nations Commission on International Trade Law (UNCITRAL), ’the core legal body of the United Nations system in the field of international trade law’. This body has a working group on electronic commerce that has done a large amount of work on the core concepts and theory of electronic signature in law and has drawn together an excellent set of documents for anyone thinking electronic signature and its adoption by states, and makes important reading alongside legislation.
Click here for UNCITRAL, UNCITRAL Working Group on Electronic Commerce.
If you are researching electronic signature law and want more information then get in touch.
Last updated: 3 October 2022