Everything changes at some point in time. Take the signature, for example. It's been nearly 350 years since our Parliament decided your personalised scribble was required for contracts to be seen as valid in the eyes of the law (Statute of Frauds, 1677).
It's not really changed a great deal since then. Legal amendments with the advancement of new technologies have accounted for telephonic signatures, audio recordings, documents sent via fax (RIP fax machines), chip and PIN systems in banking and more. Now, that legally binding scribble is beginning to enter a new phase, with the widespread adoption of the eSignature or Digital Wet Signature.
Many of the documents that mark some of life's most important milestones can now be signed with an electronic signature - from marriage certificates to employment contracts, mortgage agreements to business contracts. This is only going to grow in the future.
So, with this in mind, what do we need to know about UK eSignature law? What makes an electronic signature legally binding?
To get a better understanding of UK eSignature laws, it's important to know the different types you might encounter, how they differ and where you might be asked to provide them.
Firstly, it’s worth noting on the most fundamental level, there are two main types: Electronic and Digital. You might hear them used synonymously, but they are different.
Electronic: In general terms is a signature that is transmitted electronically. Usually just a digitised version of your handwritten signature, but can be a symbol, process, or sound connected to the document or contract that needs to be signed.
Digital: A form of electronic signature considered to be far more secure than a digitised pen squiggle – as it relies on public-key cryptography to support identity authentication and protect data integrity.
Then, additionally, we have the following types of eSignature:
Simple: It’s typically attached to or works in conjunction with other pieces of data contained within a form. So, 'signing' could be as easy as ticking a box or providing a PIN number.
Advanced: It’s always linked to the signatory and can be used to identify them exclusively – like a traditional signature. It's created with electronic signature creation data that are under their control. And it's also linked directly to the data they’re signing against.
Why does this matter? Well, it acts as an additional layer of security - automatically detecting any modifications to the original data that was signed against.
Examples include a one-time password – an alphanumeric string of characters typically automatically sent in an email or SMS – or a digitised version of a signature.
Qualified: Created by a qualified signature creation device (QSCD), you can be 100% sure it has been created by the signatory alone. This is because there’s always a qualified certificate that confirms its authenticity.
The QSCD helps to ensure that the signatory is the only person with access to the key used to create their eSignature, any signature creation data generated is overseen by a qualified provider and remains confidential and safeguarded from potential forgery.
Providing one often involves the use of a card reader, security token or electronic ID (eID) card.
UK eSignature law is well established. Believe it or not, Tony Blair had been Prime Minister of the United Kingdom for just two and a half years when electronic signatures first became legal – with the Electronic Communications Act 2000.
However, since 1st July 2016, the UK has adhered to the EU’s (European Union) eIDAS (the Electronic Identification Authentication and Trust Services).
Prior to the introduction of eIDAS legislation, the rules were far more complex. Each country in the EU had its own individual rules and regulations.
For example, a UK-based business, sending a document electronically with an electronic signature to a business in Italy, would have needed to make sure it was compliant with Italian laws.
Now, even in a post-Brexit world, with the rules having been standardised, it’s far simpler. Organisations in the UK and EU countries can freely send documents, safe in the knowledge they’re legally compliant.
Thankfully, it’s made the whole process a lot quicker.
Despite the largely simplified process, there has still been some continued uncertainty around UK eSignature regulations. In 2020, the Law Commission completed an analysis project, the recommendations of which it served to the Government.
The Law Commission also confirmed that eSignatures were a valid alternative where there’s a statutory requirement for a signature.
Following on from this piece of work, on 1st February 2022, the Industry Work Group on the Electronic Execution of Documents completed further work, outlining best practice in England and Wales, as well as providing recommendations for analysis and reform of the UK eSignature Law in the future.
Electronic signatures are valid in a court of law.
Why? Like a traditional signature, they have an intent behind them to agree to a document’s conditions and contents.
Determining this intent can be easier than with a regular signature too. If you were to provide an electronic signature, there’s a whole host of information associated with it - such as your IP address, the exact date and time the terms and conditions were agreed to, the location.
Comparing traditional handwritten signatures would require the involvement of experts in handwriting or witnesses at the document signing, which can take time and cost lots of money.
Traditionally, there has always been some restrictions around statutory bodies and the use of electronic signatures – particularly with HM Revenue and Customs. However, in a post-COVID world, there has been a relaxation around the regulations.
If a witness is required, they might not be suitable – that is something that has yet to be fully ironed out. So, it’s always important to check with the recipient of the document what they will and won’t accept.
Virtual Cabinet allows users to electronically sign documents via one-click e-sign (simple) or wet e-sign (advanced). This gives both senders and recipients flexibility around how they sign documents – whether it’s with a mouse or trackpad, a keyboard or a simple click.
Want to learn more? Visit our Signature page and get a demo to see just how much it could transform your business!