Local councils are using electronic sealing for more efficiency

Local authorities are challenged to provide better services and experience to their constituents, drive new programmes, meet internal requirements, and cut costs, all while working under economic and regulatory pressures.

These challenges have been exacerbated by the COVID-19 pandemic, making digital tools, such as electronic signatures and sealing, a necessity for effective governance.

Electronic signatures provide a wealth of benefits in an increasingly digital world such as:

• Higher efficiency

• Quicker contract turnaround

• Lower costs

• Reduced carbon footprint

• Better experience for all parties involved

According to Gerard Kamath at Lambeth Council, "eSignature creates a much more efficient end to end process".

However, one part of the contract process that often remains manual is the sealing of documents.

In this article we explore how this process can be executed electronically, what the benefits of an electronic process are, what the law says, as well as the position of HM Land Registry (HMLR) towards electronic sealing of documents.

The benefits of electronic sealing

In the UK, local authorities' Contract Standing Orders usually require that contracts over a set value must be executed by deed. In nearly all cases, local authorities execute deeds by affixing their seal and their general standing orders may prescribe how this has to be done.

The common seal of the council is the equivalent of the signature of the council. Affixing the common seal of the council to documents gives formula effect to any act or decision authorised by the Council.

Most local authorities physically affix their common seal to documents, with the seal then stamped and witnessed by two signatories.

With COVID-19, this manual process has proven difficult, and some local authorities have started to consider and use an electronic alternative.

As an example, Lambeth Council partnered with Docusign in order to modernise the sealing process when executing documents. According to them, "the electronic seal is much better than the physical seal that we use".

They describe the Docusign electronic seal feature as 'a sign of the times' - moving away from a physical process where the seal was imprinted on the contract to now doing it digitally. The digitalisation of this process minimises the physical need to use the seal and allows for visibility of the seal when contracts are sealed. The old process relied on scanning all the documents and the embossed seal was not visible.

Under the Contract Standing Orders, in order for a document to be sealed, a sealing memorandum would have to be completed alongside the agreement and brought to the legal team. Once the legal team approved and sealed the document, it would be added to a sealing register. In order to streamline this process, a Nintex form has been integrated into the Council's system—this electronic form has replaced the need for the sealing memorandum and sealing register—drastically improving the ease and efficiency of completing the sealing process.

Similar to electronic signature, electronic sealing presents many benefits, including efficiency, speed, reduced cost and a better experience for all parties involved.

However questions remain as to whether or not electronic sealing is allowed by law.

Legal recognition of electronic sealing

The local authority's constitution generally governs the affixing and attestation of its seal.

As such, the procedure for the use of an electronic seal will be governed by each local authority's constitution. It may be that the individual person required to fix the seal is to be the person responsible for carrying out an electronic sealing of a document, but subject to delegated authority in accordance with a given constitution, it may also be possible to have others undertake the process of electronically sealing documents.

Hull City Council, for example, has amended its constitution formally in order to increase the types of documents it was able to execute through its electronic contract system - Docusign eSignature, in compliance with the relevant legislation. In the UK, the Electronic Communications Act 2000 recognizes electronic seals as admissible in evidence in legal proceedings.

Bill Prest, Commercial & Projects Solicitor at Hull, said: "The transition to digital contracts has already had a significant impact through the reduction of the use of ink and paper. Contracts which may have taken a week to two weeks to complete can now be completed in under an hour in some cases. The use of digital contracts really came into their own during the pandemic due to the ability to be able to carry on the council's contracting function whilst working remotely to ensure the council's vital business could continue uninterrupted."

HMLR position towards electronic sealing

HMLR current practice relating to the execution of deeds by local authorities is set out at section 1.2 of Practice Guide 80: coronavirus (COVID-19): useful information for conveyancers. This explains that until further notice, HMLR will accept execution where a local authority also certifies that it is, under its constitution, able to validly execute a deed other than in accordance with their special arrangements. This would include in circumstances where a seal has been applied electronically if this is permitted by the council's constitution.

The following certificate must be lodged with the application signed by an individual conveyancer employed by the relevant local authority stating that the deed has been duly and properly executed in accordance with the council's constitution:

"I [name of conveyancer certifying] a conveyancer employed by [name of authority] certify that the transfer [or other deed submitted for registration] dated [date of deed] is made by the authority of the Council and has been duly and properly executed in accordance with the Council's constitution."

Docusign solution to electronic sealing

Docusign eSignature provides electronic sealing capabilities to help streamline the sealing of documents.

Our electronic sealing feature offers a flexible, automated process that can be added standalone in an envelope or within a signature workflow. These features enhance document creation, sending options, and signing experiences, making the sealing process more efficient and secure.