New EU framework for electronic signatures

Electronic or e-signatures are a way to sign ‘virtual’ documents, much like a pen is used to sign a hard-copy document. The traditional practice of signing a hard-copy document in ink, scanning it and sending it by email is being overtaken by the use of e-signatures as these become increasingly common in a range of commercial transactions.

Regulations establishing a new EU-wide framework for e-signatures came into force on 22nd July 2016 - the Electronic Identification and Trust Services for Electronic Transactions in the Internal Market Regulations 2016 (“Regulations”). Previously all countries in the EU had their own individual e-signature laws but now standards across the EU will be the same. The Regulations have updated the Electronic Signatures Regulations 2002 and parts of the Electronic Communications Act 2000. However, so far as English law is concerned, there has been relatively little change to the legal regime.

What are e-signatures and what legal effect do they have?

E-signatures can be divided into three groups:

Use of e-signatures

E-signatures can be used for virtually all business contracts including those that need to be in writing and/or signed and also for documents which are required to be signed as a deed, provided certain requirements regarding the witnessing of the original signature are met.

It is also possible for one of the parties to a document to sign using an e-signature, while the other uses the traditional wet-ink signature.

Overseas companies/foreign law

The Law Society’s practice note on using e-signatures expresses the view that:

Further information

Further information can be found in the Government's Guide to Electronic Signatures and Trust Services.

The reality is that e-signature services are increasingly being used as a matter of routine by businesses and this momentum is only likely to increase. This is an example of the law continuing the process of trying to catch up with the technology and modern business practices, effectively confirming that electronic and traditional physical signatures are treated very much on the same basis and is therefore to be welcomed.

28th September 2016

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