Unfortunately, a recent report by an expert working group has created more uncertainty in this area by expressly stating that deeds in Northern Ireland cannot be signed electronically. This view appears to have been adopted on the basis of case law dating back almost 450 years. This is a point of view with which we do not agree.
However, with no immediate prospect of the courts of Northern Ireland stepping in to clarify the law, there is a real risk that businesses’ desire to conduct end-to-end digital transactions – which has never been greater given of the growing adoption of technology and telecomputing working during the pandemic – will be defeated.
There is an opportunity for the panel, and for others like the Law Society of Northern Ireland, to make important interventions that can avert a situation where a 1584 judgment is seen as an impediment to doing business in Northern Ireland in the same way that businesses in England have become accustomed to.
Uncertainty about the law on electronic signatures and deeds
Digital technology offers businesses the ability to enter into binding transactions with other parties remotely, but the law often imposes strict requirements on the validation of contracts, including with regard to their signature and, in particular in the case acts, let the signatures be witness.
In England and Wales, there is no unequivocal legislation or case law confirming that electronic signatures can be used to execute documents. However, the issue has been reviewed by the Law Commission for England and Wales, which advises the UK government on matters of legal reform.
In early 2018, the Law Commission launched a project to explore the formalities surrounding the electronic execution of documents with the aim of addressing the underlying uncertainties. It looked in particular at the use of electronic signatures to sign documents where there is a legal requirement that a document must be “signed”; and electronic enforcement of deeds, including witness, attestation and delivery requirements.
In its September 2019 final report, the Law Commission confirmed that electronic signatures can be used to execute many documents, including deeds, in England and Wales. The opinion that this is feasible was endorsed by the UK government in its response to the report and it is also transmitted in the land registry practical guide in specific relation to the acts. As we explained in our guide to electronic signatures, we also agree with the Law Commission.
The Law Commission also held that although an electronic signature can be evidenced, the requirement in current law in England and Wales that a document be signed “in the presence of a witness” requires the physical presence of this witness.
The view of the working group
In an effort to further clarify the issues surrounding the electronic execution of documents and in response to a recommendation from the Law Commission, the government has set up an industry task force.
The group includes representatives from the legal and commercial sectors and is responsible for producing, among other things, advice on best practices for the use of electronic signatures in different commercial transactions, focusing on the procedural steps to be followed, evidence, security and reliability when documents are executed electronically, as well as potential solutions to practical and technical barriers to video testimony of electronic signatures on deeds and attestations.
In his recent interim reportthe group explored the different forms of electronic signatures and the various mechanisms and platforms through which electronic signatures can be enforced.
A Simple Electronic Signature (SES) is one of three levels of signature recognized in UK law through the Electronic Identification and Trust Services (eIDAS) Regulations. The group described SES as “the most basic form” of electronic signature widely used in the UK. They “take many forms, such as ‘writing’ using a finger or stylus, attaching digital text or image, typing a name or symbol, or using a recognized signature software platform “, he specifies.
The group also looked at the concepts of advanced electronic signatures and qualified electronic signatures – the other two levels of signature – of the eIDAS regulation. These forms of electronic signature must meet higher standards to be valid. While the identity of signatories must be verified in the case of advanced electronic signatures and qualified electronic signatures, this is not the case with SES.
The group said the use of SES for deeds in England and Wales is “valid if attested correctly”, pointing out that there are “some challenges practically” in this regard. However, he said the SES for deeds should not be used in Northern Ireland. We do not agree with this assessment.
The position in Northern Ireland
Although the reasons given by the working group for their view are sketchy, the group stated that “Northern Ireland has uncertainties” and cited a case from 1584, known as the Goddard case, as the source of this uncertainty.
The Goddard case established that deeds must be in writing and cannot be done orally and that to create a valid deed the deed must be written on paper or parchment, sealed and delivered.
While the requirement that a deed be in writing on paper or parchment has been expressly abolished in England and Wales by section 1(1)(a) of the Property Law Act 1989 ( Miscellaneous Provisions) Act 1989, it has not been expressly excluded from Northern legislation. Ireland. Nor has Goddard’s case been substantially considered by the courts of Northern Ireland.
Our point of view
Our reading of the Goddard case is that the case decided a point on the delivery of the acts, and not on the medium on which they are written. In any event, we consider that the higher courts of Northern Ireland would at least interpret the case purposively – that the deeds must be readable and the medium in which they are written must be reasonably well suited to the reading – and accept that the acts can be executed in electronic form.
We believe that our view is supported by UK legislation, including the eIDAS Regulations and the Electronic Communications Act 2000, both of which govern the use of electronic signatures, and in the provisions concerning the formalities of execution described in the Companies Act.
We also believe that the law of England and Wales on the matter, according to which documents can be performed electronically, is likely to convince the courts of Northern Ireland.
The execution of an act by electronic means will not be possible in all circumstances. This includes where registries such as the Land Registry of Northern Ireland and the Intellectual Property Office require certain filed documents to be delivered as wet ink originals. However, the Land Registration (Electronic Communication) Order (Northern Ireland) 2011 sets out limited circumstances in which the Land Registry of Northern Ireland will accept an “electronic document” – that is, a document created as an electronic communication in the Land Registry computer system. – with a digital signature for the creation, transfer, modification or extinction of an estate or an interest in land.
Given the uncertainty and before the matter goes to court, it would be welcome if the Law Society of Northern Ireland could provide guidance on this important matter to help facilitate doing business in Northern Ireland. The hope is that this would act as a catalyst to change the systems of the Land Registry of Northern Ireland to modernize their approach to electronic signature, as has been the case in England.