Guide To Electronic Signatures - Free Download PDF

15d ago
3 Views
0 Downloads
420.13 KB
19 Pages
Transcription

Guide to Electronic Signatures 1Guide toElectronicSignaturesIn association with

Guide to Electronic Signatures 2Contents1. Introduction 32. What is an electronic signature? 33. Validity of electronic signatures 54. Using electronic signature platforms 65. Applying an electronic signature 66. Annexations 77. Self-proving status 88. The signing process 99. Verifying an electronic signature 1310. What is the original document? 1411. Storing documents that havebeen electronically signed 1512. Counterpart signingand electronic documents 1613. Quick links 18

Guide to Electronic Signatures 31. IntroductionThis guide has been prepared toassist the legal profession with theuse of electronic signatures incommercial contracts, and tosuggest best practice in this area.The guide sets out the Scotslaw position. Where relevant,we have contrasted the positionunder English law. The law inother jurisdictions may of coursebe different.There are a number of third-partyproviders of e-signing platforms.Adobe Sign and DocuSigneSignature are two well-knownones and the Working Group is verygrateful to them for their assistancein preparing this guide. Some ofthe practical examples in this guideare based on the capabilities ofthese two providers. Each providerwill, however, do things differentlyand offer different functionality.Nothing in this guide constitutesan endorsement of any third-partyprovider.This guide does not deal withthe Scottish rules of evidence.Please see section 7 of theElectronic CommunicationsAct 2000.The guide is not a completestatement of the law and does notdisplace the legal responsibilitiesand obligations on solicitors toidentify relevant matters of law.For assistance on the use ofSmartcards, please refer to theSmartcard practical advice guide.2. What is an electronic signature?2.1. OverviewAn electronic signature is definedas “data in electronic form which isattached to or logically associatedwith other data in electronic formand which is used by the signatory tosign1”. This simply means that someelectronic data has been used by aperson to sign or otherwise signifyagreement or consent.Electronic signatures can takea number of different forms. Thethree main types of electronicsignature are discussed here.2.2. Simpleelectronic signaturesThe most basic form of electronicsignature is the simple electronicsignature. We encounter theseevery day, for example: Using a finger or stylus to sign12Article 3(10) eIDAS.See Neocleous v Rees [2019] EWHC 2462 (Ch).on a pad when a parcel is delivered; Clicking an onscreen button suchas ’I agree‘, ’Submit‘ or ticking abox saying ’I accept the terms andconditions’; Typing your name into an email2; Electronically pasting a signature(e.g. in the form of an image) into anelectronic version of a contract; or An electronic signature on ane-signing platform with audit trailcapability.At the date of this guide, thestandard functionality providedby most e-signing platforms is asimple electronic signature.signature is detectable. They are: Uniquely linked to the signatory; Capable of identifying the signatory; Created using means that thesignatory can maintain under theirsole control; and Linked to the data to which it relatesin such a manner that any subsequentchange in the data is detectable.AESs are available through somee-signing platforms (see Qualifiedelectronic signatures (2.4)) andother third party providers.2.3. Advancedelectronic signaturesThe highest standard of electronicsignature is a qualified electronicsignature (QES). This is the mostsecure type of signature and involvesthe signatory’s identity being verifiedby a qualified trust service providerbefore the signatory is issued with aAdvanced electronic signatures (AES)are more secure since the signatoryhas a greater level of control overtheir use and any change to the2.4. Qualifiedelectronic signatures

Guide to Electronic Signatures 4QES. Under Scots law, a QES is theonly type of electronic signaturethat is self-proving (probative)(see Self-proving status (7)).The Law Society Smartcardenables Scottish solicitors to applya QES to documents.The out the box standardfunctionality of e-signing platformsdoes not currently provide AESor QES. However, DocuSigneSignature and Adobe Sign (andpossibly other e-signing platforms)do offer AES and QES functionalityat an additional cost.In some countries (includingsome in continental Europe withcivil law systems) QESs are morewidely available. For example, somecountries have them built intonational identity cards.2.5. Digital signaturesOften the terms digital signatureand electronic signature are usedinterchangeably. However, a digitalsignature is generally intendedto refer to an electronic signaturewhere advanced cryptography isused. A simple electronic signatureis not a digital signature.2.9. Relevant legislationRequirements of Writing (Scotland)Act 1995 - This Act has beenupdated and includes a newPart 3 which deals withelectronic documentsLegal Writings (Counterparts andDelivery) (Scotland) Act 2015eIDAS - EU Regulation No.910/2014 on electronicidentification and trust services3Section 9A, Requirements of Writing Act.2.6. EU regulations eIDASThe use of electronic signaturesis governed by Regulation (EU)No 910/2014 (“eIDAS”), alongwith the UK legislation set out atRelevant legislation (2.9). Theeffect of eIDAS is that: A qualified electronic signaturehas the same legal effect as ahandwritten signature; and Electronic signatures cannotbe denied legal effect andadmissibility solely on the groundsthat they are in electronic form.However, while eIDAS gives legalrecognition to electronic signaturesof all types, it does not provide whatevidential weight might be attachedto a particular type of signature (seeEvidential weight (9.3)).Certain provisions of eIDAS havebeen reflected in UK legislationsuch as the Requirements ofWriting (Scotland) Act 1995 andthe Electronic Documents(Scotland) Regulations 2014.Upon the expiry of the postBrexit transition period, eIDASwill become part of UK domesticlaw under the European Union(Withdrawal) Act 2018.for electronic transactions in theinternal marketElectronic CommunicationsAct 2000The Electronic Documents(Scotland) Regulations 2014The Land Register of Scotland(Automated Registration) etc.Regulations 2014 - These addRegulations 5-7 to the Electronic2.7. What is anelectronic document?Electronic signatures can only beapplied to electronic documents.The Requirements of Writing Acttells us that electronic documentsare documents which, rather thanbeing written on paper, are createdin electronic form. These aredocuments which are never printedin hardcopy but rather exist solelyas, for example, Word documents,PDFs and/or emails.Documents printed on paperare referred to as traditionaldocuments.2.8. What is not anelectronic signatureIf you print out a document, signit in wet ink, then scan it in, thatis not an electronic signature. Thatis a signed traditional documentof which an electronic copy hasbeen made.By contrast, if the document isnot printed out, but some form ofmark is applied electronically (e.g.a scanned version of a signature),that is a type of electronic signature.Documents (Scotland) Regulations2014, in particular stipulating whois able to sign on behalf of differententities (mirroring the provisionsof Schedule 2 to the 1995 Act)The Electronic Identificationand Trust Services for ElectronicTransactions Regulations 2016 –These Regulations made certainconsequential amendments to UKlaw as a consequence of eIDAScoming into force

Guide to Electronic Signatures 53. Validity of electronic signatures3.1. Electronic signaturesand the Requirementsof Writing ActSection 1(2) of the Requirementsof Writing Act sets out certaindocuments which must be madein writing. The requirements forvalid execution in section 2 of theRequirements of Writing Act onlyapply to section 1(2) documents.Section 1(2) documentsinclude certain documentsrelating to land (such as missives,dispositions and leases),gratuitous unilateral obligationsexcept those undertaken in thecourse of business, and ’trusteras trustee‘ trusts.Section 1(2) documents must besigned with an AES to be valid anda QES to be self-proving4. However,wills and testamentary writings, andcertain documents which are to beregistered, must be created andsigned in traditional form using wetink signatures.Unless there is a specific statutecovering the particular type ofdocument, there is no statutoryrequirement as to how documentsthat are not covered by section1(2) should be executed. A simpleelectronic signature is a valid formof execution for those types ofdocument.See also Self-proving status(7) and Verifying an electronicsignature (9).Generally, the precise form ofelectronic signature used is notcritical: being able to prove whosigned and that they intendedto be bound is more important.3.2. Requirements for‘in writing’ outsidethe Requirementsof Writing Act3.3. Non-Scottish entitiessigning a documentgoverned by Scots law(Rome 1 considerations)Where there is a requirementby legislation outside of theRequirements of Writing Act fora contract to be made in writing,an electronic signature is a legallyeffective means of signifyingagreement in writing. An exampleof this is a jurisdiction clause underthe Recast Brussels Regulation5.There may however be a specificstatutory requirement for a wetink signature. An example (theremay be others) is section 31(6) ofthe Patents Act 1977. This requiresassignations of, or grants of securityover, patents to be in writing and’subscribed‘. However, subscribedis a term used only in the provisionsof the Requirements of Writing Actdealing with documents that arein paper, parchment or anothertangible medium. It is not clearwhether the failure to update thewording in section 31(6) to reflectRequirements of Writing Actamendments was an oversight.Where a non-Scottish entity executesa document governed by Scots law,an electronic signature by that entitywould be valid under Scots law. Inthese situations, advice from the localjurisdiction (e.g. an opinion from localcounsel) should be obtained in casethere are any local law requirementsthat would prevent, restrict orotherwise impact the ability of theentity to sign using an electronicsignature.Regulations 2 and 3 of the Electronic Documents (Scotland) Regulations 2014.Regulation (EU) 1215/2012 of the European Parliament and of the Council of 12 December 2012on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.45

Guide to Electronic Signatures 64. Using electronicsignature platformsMost e-signing platforms work byselling a licence or subscriptionto use the platform (e.g. to a legaladvisor). The licensee can then usethe platform to initiate the signingprocess without the signatoriesthemselves having to have anaccount. The e-signing platform isbrowser based and will not requireinstallation of software.The considerations outlined in thesigning process (8) will be relevantwhen solicitors (or their clients)intend to use an e-signing platform.Solicitors will have to advise onwhether that is appropriate in thecontext of the transaction.When working withcounterparties, it is simpler to useone platform and the parties shouldagree in advance which one thatshould be (if different parties usedifferent platforms).Whichever e-signing platformis used, all participants to asigning process should receivethe final signed document(s).Participants should also makesure that they receive fromthe originator of the signatureprocess the accompanyingaudit trail (metadata and anycertificates provided) if this isnot provided to themautomatically. See Storing theelectronic signature data (11.2).5. Applying an electronic signature5.1. Applying an electronicsignature without ane-signing platformElectronic signatures may be appliedwithout the use of an e-signingplatform, for example, using one ofthe methods set out in paragraph 2.2.5.2. Applying anelectronic signature usingan e-signing platformAlthough each e-signing platformis different and platform servicesare continually being updated, ingeneral each signatory receives anemail request to sign the relevantdocument. They then access thatdocument through a link provided inthe email and apply their electronicsignature to the document.For how to apply a QES usingthe Law Society of Scotland’sSmartcard, please see the LawSociety of Scotland guidance.5.3. Where to place thesignature block whenusing an e-signingplatformIt is not necessary for the signatureblock to be placed at the end of thebody of an electronic document. Thesignature block can appear anywherein that electronic document. Ratherthan subscription, section 9B of theRequirements of Writing Act talksabout the electronic document being“authenticated by the granter” if thatperson’s signature is “incorporatedinto, or logically associated with,the electronic document”. It is notnecessary to include any particularform of wording in the testing clauseor signature blocks.In practice we expect thatelectronic documents will be setup in the same way as traditionaldocuments, with the signatureblock at the end of the body ofthe document.Where an electronic signatureis being applied under Scots law,solicitors should remove anyreferences to witnesses. Witnessingan electronic signature does notcreate a self-proving signature.It may be confusing for anyonelooking at the document furtherdown the line if parts of a signatureblock appear to be incompleteeven though they did not need tobe completed. See Witnessing anelectronic signature (7.1).

Guide to Electronic Signatures 76. AnnexationsFor an annexation to an electronicdocument to be regarded asincorporated in that document itmust be (a) Referred to in the document;(b) Identified on its face as beingthe annexation referred to in thedocument; and(c) Annexed to the documentbefore the electronic signatureunder Regulation 2 is incorporatedinto or logically associated with thedocument and the annexation.It applies to all electronicdocuments but Regulation 4(c) isproblematic because it envisagesan electronic signature underRegulation 2 (Regulation 2 requiresan advanced electronic signaturefor documents listed in section 1(2)of the Requirements of WritingAct to be valid). It is also not clearfrom Regulation 4 what is meantby “annexing” in the context ofelectronic documents. What is thepractical effect of this?It is unclear what is meant inRegulation 4 by an annexation andhow in practice an annexation isto be annexed to the electronicdocument before the electronicsignature is incorporated intoor logically associated with thedocument and the annexation. Ifyou are authenticating a documentlisted in section 1(2) with an AES or(to make it self-proving) a QES then,whether you are using a Law SocietySmartcard (or similar signaturecreation device) or an e-signingplatform, the prudent approach isto incorporate all the annexationsinto the same electronic file (i.e.into the same Word documentor PDF) prior to attaching theelectronic signature.By complying with Regulation4, the effect is that the wholedocument, including theannexations, will be regardedas having been signed by eachsignatory.6.1 Electronic documentslisted in section 1(2)6.2 Electronic documentsnot listed in section 1(2)Annexations (e.g. schedules orplans) to electronic documentslisted in section 1(2) of theRequirements of Writing Act (seeElectronic signatures and theRequirements of Writing Act (3.1))will be regarded as incorporatedprovided that Regulations 4(a), (b)and (c) are complied with.For electronic documents not listedin section 1(2) of the Requirementsof Writing Act (see Electronicsignatures and the Requirementsof Writing Act (3.1)), the position isless clear, stemming from the factthat Regulation 4(c) cross refers toRegulation 2 which only applies todocuments listed in section 1(2).One reading of Regulation 4is that annexations can only beincorporated into documents notlisted in section 1(2) if Regulations4(a), (b) and (c) are complied with,meaning that these documentswould require to be signed with anadvanced (or qualified) electronicsignature. However, it is difficult toenvisage that this was an intendedeffect of Regulation 4 given themany different types of documentthat can be signed using a simpleelectronic signature.Where parties wish to annex/incorporate something to/intoan electronic document that is notlisted in section 1(2) and will besigned using a simple electronicsignature, compliance withRegulation 4 (c) will not be possible.However, that may not matter inpractice. Where section 1(2) doesnot apply, there is no requirementfor formal writingand so, for such documents, theparties might choose to rely insteadon the usual contractual principlesfor incorporation by reference.Exactly how they incorporate byreference will be up to the parties.For example, the parties maychoose to incorporate a separatedocument (B) into an electronicdocument (A) before documentA is signed (in which case documentB forms part of document A). In themain body of document A they may

Guide to Electronic Signatures 8refer to (the newly incorporated)document B as being ’annexedto‘ document A even if, on a strictinterpretation, all the requirementsof Regulation 4(c) may not havebeen met, and they may identify(the newly incorporated) documentB on its face as being the documentwhich is referred to in the mainbody of document A.Alternatively, if that is not feasible(e.g. size or file format issues),the parties could keep documentB separate from document Abut incorporate it by documentA referring to document B byname/date/version number etc.Ideally, document B would also beidentified on its face as being thedocument referred to in documentA. Incorporation could also beachieved by including document Bin the same envelope as documentA, or a separate envelope, as long asdocument B is clearly referred to indocument A. Ideally, documentB would also be identified on itsface as being the documentreferred to in document A. Furtherevidence of incorporation maybe provided by applying electronicinitials to document B (a featureavailable on some e-signingplatforms).In practice, for electronicdocuments not listed in section1(2), the crucial question willbe what did the parties agree andare they able to evidence that?7. Self-proving status7.1 Witnessing anelectronic signatureIt is misleading under Scots law torefer to ‘witnessing’ an electronicsignature. Scots law does notrecognise the concept of witnessingan electronic signature in thesame way that special status isattributed to witnessing a traditionaldocument.No type of electronic signaturecan be witnessed within themeaning of section 3 of theRequirements of Writing Act.Section 3 is only relevant to wetink execution of traditionaldocuments. Therefore, a purported‘witnessing’ of any form ofelectronic signature does notcreate a self-proving signature.For the purposes of theRequirements of Writing Act, a selfproving electronic signature canonly be created by use of a QES.No witnessing is required. TheQES, by itself, is self-proving6.An AES or simple electronicsignature cannot be self-proving.Example 1 – John is a party toan agreement. He uploads a scanof his handwritten signature to thesignature block. Jane stands beside6him and watches him to do this.Jane then uploads a scan of herhandwritten signature and appliesit to the witness signature block.Although Jane’s signature may be ofevidential value, it is not self-provingin terms of the Requirements ofWriting Act.Example 2 – Ahmed receives arequest from an e-signing platformasking him to execute an electronicdocument. He calls Alina over towitness his signing of the documentvia the platform. Alina watches himsign, and then applies her electronicsignature to the witness block inthe e-signing platform. This doesnot make Ahmed’s signature selfproving under the Requirementsof Writing Act.7.2 Comparisonwith EnglandIn order for a document t

eIDAS - EU Regulation No. 910/2014 on electronic identification and trust services for electronic transactions in the internal market Electronic Communications Act 2000 The Electronic Documents (Scotland) Regulations 2014 The Land Register of Scotland (Automated Registration) etc. Regulations 20