Please note: The information and advice in this article is correct as of 20/05/20. Due to the changing guidance during the coronavirus pandemic, advice is subject to change and, while we endeavour to ensure our blogs are kept up to date, we would always advise you speak with a solicitor for specific advice.
As we become more accustomed to the ‘new norm’ of life during the coronavirus pandemic, we have received lots of questions from businesses and individuals asking how they can sign commercial documents and deeds whilst adhering to social distancing guidelines.
The simple answer is that the law remains unchanged in response to the current climate; however, the Law Society has issued its own guidance for legal practitioners.
Since it is currently not certain how long social distancing measures will be in place for and to what extent, solicitors and their clients have been looking into virtual execution and e-signatures in order to complete matters on time.
The Law Society has highlighted the statement of the Law Commission in the autumn of 2019 which stated that “an electronic signature is capable in law of being used to execute documents (including deeds).” The Law Commission also emphasised that signatures need to be authenticated and the formalities of execution must be followed. They also warned that in the past, courts have accepted that markings as simple as an ‘X’ made by the signer could constitute a valid and binding signature.
The Law Society advises that consideration should be made to the manner in which the document will be used and “any relevant legislation, regulatory requirements within the specific practice area and the type of document being signed or executed.” They advise that it remains best practice for a witness to be physically present during the signing but acknowledge that, with current restrictions in place, it is necessary to modify practice to suit circumstances.
It should be noted that that doesn’t apply to the execution of Wills which cannot be signed electronically. There are also documents which have to be submitted to Companies House which will not be accepted with a digital signature.
The Land Registry however, will accept deeds which have been signed using the Mercury signing approach. For land registration documents, a signature should be made and witnessed in pen but can then be scanned or have a photo taken of it and sent to their conveyancer.
More information from the law society on virtual execution and e-signatures during COVID-19 can be found here.
Before lockdown, Justice Secretary Robert Buckland MP responded to the issues raised by the Law Commission and indicated that he did not see the need for further legislation endorsing the use of e-signatures. He added, “the existing framework makes clear that businesses and individuals can feel confident in using e-signatures in commercial transactions”; and that “electronic signatures […] are permissible and can be used in confidence in commercial and consumer documents”.
He did acknowledge that further work needed to be done on the security and technology of electronic signatures as well as video witnessing of such.
In light of no change of law in the way documents and deeds should be signed whilst social distancing measures are in place, we would advise to check how any document should be executed. If an electronic signature is acceptable then for some documents, the page including the original “wet ink” signature should also be sent, albeit most transactions will now complete on the basis of electronic signatures only.
If the document requires witnessing, then an electronic signature can be used but the witness must physically see the person add their electronic signature to the document before then adding their hard copy signature or electronic signature and details. It is acceptable for a document to be signed with the witness adhering to social distancing regulations, but being able to physically see the person sign the document, the person then signing the document can step away from the document so that the witness can then add their details.
For most legal documents if you are only sending back a signature page it is important to also send a full PDF copy of the document that you have signed and authorise your legal practitioner to attach your signature page to that version of the document.
Every case is different so you should seek advice from a legal professional before proceeding with execution of documents. Contact Farleys’ corporate solicitors on 0845 287 0939 or contact us by email.