Is technology about to catch up with deeds?

Some charity trustees may be familiar with the frustration of the lengthy process of circulating a deed of appointment of trustees, required to be signed and delivered by every trustee and new trustee, and with each signature being appropriately witnessed by another individual who is physically present, and then who attests the signature by also signing the document, and then writing their full name, address and occupation below their signature.

Although the process of signing by deed can seem laborious, some charities are obliged by legislation to document some key decisions, such as changes of trustees, by deed and this is not something that can be completed electronically… at present.

However, the Law Commission is currently consulting on the electronic execution of documents, and it seems possible that the law in this area may be going to change.

Use of electronic signatures (“e-signatures”) for contracts generally

The Consultation Paper will be welcomed by many for providing a provisional confirmation that it is already acceptable for many agreements to have an e-signature provided ‘an authenticating intention can be demonstrated’.

In this context, an e-signature could mean anything from a scanned manuscript signature that is added to documents, to digital signatures and Public Key Infrastructure.

This recognises that at present contracts are regularly made using electronic signatures instead of handwritten signatures, and while the comments of the Law Commission in the Consultation Paper do not place the authenticity of an electronic signature beyond all doubt, its provisional conclusion is encouraging. It also seems unlikely that this issue is going to be clarified further by legislation any time soon, given the other demands on Parliamentary time.

Deeds and other agreements subject to formalities relating to signature

The Consultation Paper notes there are still issues with the use of e-signatures where legislation requires certain formalities to be complied with for the execution of certain documents, as in the case of powers of attorney, trust deeds (such as deeds of appointment and retirement of charity trustees), contracts for sale of interests in land and certain consumer contracts, such as regulated credit agreements under the Consumer Credit Act 1974.

Therefore, the Law Commission is seeking views on whether:

1. webcam or video links could be used instead of a physical witness for documents which require witnessed signatures
2. there should be a move away from traditional witnessing in person to:
   • a signing platform alone, where the signatory and witness are logged onto the same programme from different locations; or
   • the ability of a person to “acknowledge” that they applied an electronic signature to a witness after the event
3. there should be a further project on whether the concept of deeds is fit for purpose in the 21st century and
4. the government should set up a group of industry experts to monitor the use of electronic signatures and advise on potential changes which could help businesses as new technology emerges

So, depending on the outcome of this consultation, might we see new ways of complying with the formalities required for the signature of certain documents, or even the end of deeds themselves…?

Those wishing to contribute to the consultation have until 23 November 2018 to submit their views. Following the closure of the consultation, the Law Commission will then produce a report setting out any recommendations.