Electronic signatures: Where are we now, and where are we going?Print publication
Electronic signatures in conveyancing: current practice and imminent changes
New ways of working necessitated by the Coronavirus pandemic have accelerated digitisation – in particular the use of electronic signatures – in the conveyancing process. So, what is the current position with electronic signatures, and what changes are on the horizon?
What do conveyancers and retail banking clients need to know now?
In September 2019, Walker Morris specialist explained the Law Commission’s report on the legal and practical issues associated with the electronic execution of documents and discussed whether the law was fit for modern commercial practice.
In July 2020, HM Land Registry announced that it now accepts dispositionary deeds (such as those transferring or creating leases and securing mortgages) that have been signed with a witnessed electronic signature. (Previously, HM Land Registry had required wet ink signed documents, meaning conveyancers had to circulate hard copy documents for registrable dispositions.)
For the deeds to be accepted by HM Land Registry, all parties must agree to use electronic signatures and have a conveyancer acting for them who will be responsible for setting up and controlling the signing process through the platform (such as DocuSign). Currently, the physical presence of a witness is required.
Once the customer receives an email from the platform to confirm the deed is ready to be signed, the following practical steps are required :
- Input the one-time password (OTP) issued by the platform, having completed a two factor authentication.
- Electronically sign the deed in the physical presence of a witness, with the date and time being automatically recorded within the platform’s audit trail.
- Having physically observed the signatory sign the deed, the witness will then receive an email from the platform inviting them to sign and add their details in the attestation clause. The witness then inputs the OTP sent to it by text message. The date and time will be automatically recorded.
- A conveyancer will then complete the deed by dating it.
Important, imminent changes
In a blog published in October 2020, HM Land Registry confirmed that it is now moving towards the use of what are known as qualified electronic signatures. These potentially provide a more secure and convenient option, as witnesses are not required. Instead, qualified electronic signatures have an embedded identity check, which means that the signature is encrypted and adheres to a regulated standard.
Qualified electronic signatures therefore represent potentially significant and sweeping changes to the way conveyancers and retail banks do business.
Further information from HM Land Registry on the implementation of qualified electronic signatures is expected in the coming weeks. Walker Morris will monitor and report on developments.
Walker Morris’ Senior Associate specialises in retail banking litigation and is an expert on electronic execution of documents. Please do not hesitate to contact us for any further advice or assistance.