Legality guide for electronic signature in the UK

The UK generally adopts a permissive approach to electronic records and signatures. Even something as informal as typing a name at the end of an e-mail is capable of being a signature recognised by the law. The UK Electronic Communication Act became law in the year 2000. DocuSign meets the definition of an electronic signature under the UK Electronic Communication Act.

Three main situations have to be considered:

1. When a document is signed, there is often no legal requirement to use a signature at all: the signatories sign the document so as to indicate that they associate themselves with its contents. For a contract, signing also shows intention to conclude the contract and to be bound by its terms. In this situation, UK law does not stipulate any particular kind of signature. 

2. For some kinds of document, UK law stipulates that the document must be signed in order to be legally valid. Again, in general, any kind of electronic signature is capable of satisfying a bare legal requirement for a signature unaccompanied by any other formality requirements. That could include something as informal as typing a name at the end of an email. Validity is a yes/no question: does the signature comply with any applicable legal requirements? Evidential weight is also important, but is graduated: how strong is the evidence provided by a signature as to the identity of the signatory, when the document was signed, what was signed and (if relevant) where? It is advisable to consider carefully what kind of signature to use for documents and transactions of differing value and significance.

3. Rarely, UK law may require a wet ink or a specific kind of electronic signature.

Choice of signature should also be considered in the context of other formalities that the law may sometimes require. 

Types of Permitted Electronic Signature

The position is summarized by the Law Commission of England and Wales Statement of the Law in its Report on Electronic Execution of Documents (Sept 2019):

“(1) An electronic signature is capable in law of being used to execute a document (including a deed) provided that (i) the person signing the document intends to authenticate the document and (ii) any formalities relating to execution of that document are satisfied.

(2) Such formalities may be required under a statute or statutory instrument, or may be laid down in a contract or other private law instrument under which a document is to be executed. The following are examples of formalities that might be required: (i) that the signature be witnessed; or (ii) that the signature be in a specified form (such as being handwritten).

(3) An electronic signature is admissible in evidence in legal proceedings. 

It is admissible, for example, to prove or disprove the identity of a signatory and/or the signatory’s intention to authenticate the document.

(4) Save where the contrary is provided for in relevant legislation or contractual arrangements, or where case law specific to the document in question leads to a contrary conclusion, the common law adopts a pragmatic approach and does not prescribe any particular form or type of signature. In determining whether the method of signature adopted demonstrates an authenticating intention the courts adopt an objective approach considering all of the surrounding circumstances.”

History of eSignature Law in the European Union

The eSignature Directive (1999/93/EC) established a Community framework for the use of electronic signatures on electronic contracts in Europe. More than 30 countries implemented the Directive. In 2014, the European Parliament repealed the 1999 ESignature Directive with the goal of creating a more uniform, pan-EU market for electronic transactions, replacing it with EU Regulation No 910/2014 on electronic identification and trust services for electronic transactions in the internal market, also known as eIDAS. The mandatory enforcement date of eIDAS for eSignature across all member countries is July of 2016.

The UK eIDAS Regulation

After Brexit, the UK replaced the eIDAS Regulation with a UK version, the UK eIDAS Regulation. As with its predecessor, in parallel with the common law, the UK eIDAS Regulation defines three levels of electronic signature. These have little significance at present, since almost no UK legislation requires use of the two higher levels of signature (advanced and qualified electronic signatures). Nor does English law confer any unique status on them.

[Indeed], UK eSignature law, different from the majority of EU member countries, does not give special status to any particular signature type or defined electronic signature technology standards, including those from ETSI (European Telecommunications Standards Institute) or CEN, the European Committee for Standardization.

Nevertheless, as terms defined in statute they are available for use by, for instance, parties to a contract who wish to specify use of a particular kind of eIDAS-standard signature. It is possible that future legislation may provide for use of an eIDAS-standard higher level signature as a way of executing certain transactions or documents, such as in real estate.

UK eIDAS defines the following three levels of electronic signature:

• Simple: an electronic signature that does not meet the definition requirements for higher levels of electronic signature, i.e., Advanced or Qualified. 

• Advanced: an electronic signature that is (i) uniquely linked to the signatory; (ii) capable of identifying the signatory; (iii) created using electronic signature creation data that the signatory can, with a high level of confidence, use under the signatory’s sole control; and (iv) linked to the data signed in such a way that any subsequent change in the data is detectable. 

• Qualified (“QES”): an advanced electronic signature created by a qualified electronic signature creation device and which is based on a qualified certificate for electronic signatures.

The QES regime is underpinned by Qualified Trust Service Providers (QTSPs) such as DocuSign. At present UK eIDAS recognises both UK and EU QTSPs.

DocuSign’s electronic signature solutions permit a range of methods for identifying and authenticating signers to cover the spectrum of different signature types defined by EU technology standards organizations. DocuSign’s support for these different signature types includes use of email, social network ID, access codes, SMS, phone and face-to-face verification, to uniquely link a signer to his or her electronic signature.

eIDAS, the governing regulation on electronic transactions in the European Union is technology neutral, like the EU Directive on electronic signature before it. Under the eIDAS Regulation, an “electronic signature” is any data in electronic form that are attached to or logically associated with other electronic data that can serve as a method of authentication. An electronic signature meeting this definition is recognized under eIDAS and is admissible as evidence, but other approaches, including Advanced electronic signature (AdES) and Qualified electronic signature (QES) are permitted.

Documents That May be Signed Electronically

The following transaction types are generally eligible for the use of electronic signatures:

• Commercial contracts

• Employment contracts

• Corporate Resolutions (subject to any provisions to the contrary under the company’s constitutional documents)

• NDAs

• Consumer Transactions (subject to any formalities requirements applicable to, for instance, consumer credit transactions)

• Software and Content Licensing

• Procurement (assuming there are not specific requirements to the contrary under the relevant procurement process)

NOTE: The law of electronic signatures in most countries spells out certain types of documents or document categories for which electronic signatures are not appropriate. Each customer should work with legal counsel to identify categories of exclusion in the relevant country, but common categories of exclusion are wills and trusts, powers of attorney, and declarations given under oath.

Further Guidance

Some transaction types in the following areas may not be signed electronically in certain circumstances, or require caution to be exercised and necessitate assessment on a case-by-case basis:

• Wills and testamentary dispositions (wet ink signature always required)

• Real Estate

• Banking

• Lending

• Deeds and Powers of Attorney

• Statutory Assignments

• Government Filings.

As with manuscript signatures, care must be taken to comply with surrounding legal requirements and formalities concerning matters such as authority to sign, whether delegation is permissible, order of signature, whether the document must be a single document, place of execution (if relevant for e.g. tax purposes), contractual or corporate constitutional limitations on kinds of signature, overseas laws in cross-border transactions, enforceability in other jurisdictions, registry filings, notarisation and other legal and commercial requirements. If the law requires a document to be in writing, that generally includes visible electronic form and so does not normally prevent use of an electronic signature.

Where a document is required to be witnessed, remote witnessing via video would not comply with a legal requirement for a document to be signed in the presence of a witness. Electronic witnessing in person using a facility such as DocuSign eWitness is permissible.

Consequences of Non-Compliance

Where the law prescribes a particular method of signing (or, more commonly, prescribes some other formality that must be complied with), the consequence of non-compliance is likely to be that the document or transaction is invalid.

A different but also significant issue is whether the chosen method of signature is evidentially sufficiently robust to stand up to challenge if a party claims that they did not sign the document, that the contents of the document that they signed were not as claimed, or that it was signed at a different time or place. In other contexts such as due diligence it may also be important to be able to demonstrate these matters to a third party. These considerations will influence both choice of signature method and good practice in creating and preserving audit logs and records. 

For more information about eSignature legality in the United Kingdom and additional countries, the DocuSign eSignature Legality Guide provides an in-depth look into each country, in addition to both popular uses for electronic signatures, as well as transaction categories where electronic signatures may not be appropriate for each country.

Case Law

The following cases are examples of where English courts have addressed the use of electronic signatures:

• Golden Ocean Group Ltd v. Salgaocar Mining Industries Pvt Ltd [2012] EWCA Civ 265;

• Bassano v Toft [2014] EWHC 377;

• Neocleous v Rees [2019] EWHC 2462;

• Kassam v Gill (HHJ Worster, Birmingham County Court, 13 August 2018)

Some cases not directly concerning use of electronic signatures but nevertheless of interest include:

• Emmanuel v Avison [2020] EWHC 1696 (Ch) (burden of proof)

• Yuen v. Wong [First Tier Tribunal] (2016/1089) (remote video witnessing of a deed)

Publicly Accessible Hyperlink(s) to Laws/Regulations relating to the matters discussed above 

The Electronic Identification and Trust Services for Electronic Transactions (Amendment etc.) (EU Exit) Regulations 2019

Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC