ARTICLE
E-Signatures – risks and rewards for law firms
T
he COVID-19 pandemic has given rise to a considerable increase in the use of e-signatures. Recently, the Execution of Documents Industry Working Group has published its Interim Report, which sets out best practice guidance that law firms can follow immediately. In this article, James Robins and Ivan Roots, who are specialists in professional risks, discuss some of the key points to consider when using e-signatures in legal practice. Authenticity, integrity & evidential weight E-signatures can take a number of forms, ranging from simply typing a name into a document or an email on the one hand to using sophisticated web-based e-signature platforms on the other. Other possibilities include using a finger and a touchscreen to write a name or pasting an electronic image of a signature onto a contract. These different forms of e-signature are not all equally secure and trustworthy, which will impact on their evidential weight if there is a dispute as to the authenticity or integrity of a document. Authenticity In this context, authenticity means: (a) is the person signing the document who they say they are?; (b) is the document accurately timed and dated; and (c) is it intended to have legal effect? For law firms, particularly those involved in high risk and high value transactions, digital e-signatures via e-signing platforms (such as DocuSign and Adobe Sign) will provide the greatest level of assurance that the signed document is authentic. The use of such a signing platform is recommended as best practice by the Industry Working Group. The Industry Working Group also recommend consideration of whether obtaining additional evidence to record the fact that the signatory is approving the document is necessary and/or appropriate. If the method of e-signing used could be considered less reliable or more susceptible to fraud, it will be important to consider what additional steps could be taken to safeguard the process. For example, the lawyer could make an appointment for a virtual meeting with the client for the specific purpose of signing the document live during the meeting using the e-signing technology. It will also be important to keep an audit trail of the process that was followed (and an old fashioned attendance note will be very useful here). This will help build an evidential case if the validity of the execution is challenged. Obtaining the written agreement of all relevant parties to use
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e-signatures at an early stage in any legal process will also assist if there is a dispute later as to whether there was an intention to execute a document using e-signatures. Integrity Integrity in this scenario means could the document have been tampered with either before or after signing? Again, a digital e-signature via an e-signing platform will offer the greatest level of assurance and provide a clear audit trail showing who signed the document, their email and IP address and the date and time of the signature, which the Industry Working Group cite as a reason for recommending their use. It will be very difficult for a signatory to successfully argue that they didn’t sign a document if the evidence shows it was signed from their computer, at their home, at a time they were there, though if a less secure method of e-signing is used, it will be important to take additional steps to record what was agreed to help build an evidential case if the validity of the execution is challenged. Practical recommendations for practitioners Client considerations Take care to ensure that the use of e-signatures, whilst speedy and convenient, does not result in any less care in ensuring that clients (especially less sophisticated clients) have been properly advised and fully understand the effects of the document they are signing. There will be some circumstances in which a face to face meeting with a client to ensure a complete understanding of the transaction before signature will be more appropriate, especially now this has become easier to do as the restrictions of the pandemic have been eased. Limitations on use Some documents still require a wet ink signature – one notable example being a will. Although the temporary legislation to allow for the remote execution and witnessing of wills which came into force during the early stages of the pandemic has been extended (it is now due to expire on 1 February 2024), the Government has decided not to allow the use of e-signatures of wills as part of this temporary legislation. It is also important to remember that some transactions have particular requirements (financing transactions for example require the use of a digital signature rather than a simple e-signature), and some authorities and registries, such as the Land Registry, have very specific requirements.
