E-signatures: a sign of the times?

Could e-signing be used for wills or lasting powers of attorney? Daniel Watson considers the risks.

The Law Commission’s recent consultation paper on the validity of e-signatures provisionally concludes that a typed name, or clicking an ‘I accept’ button, is capable of satisfying a statutory requirement for a document to be signed or executed under hand in the context of many legal documents (see the Commission’s consultation on ‘The electronic execution of documents [1]’). This is so provided that there is an authenticating intention on the part of the signatory. The paper’s conclusion is based on a combination of case law, statute, and the eIDAS Regulation (eIDAS), which has had direct effect since 1 July 2016.

Giving equal force to e-signatures is sensible from a business perspective, allowing contracts to be signed and circulated quickly. However, the use of electronic signatures is not always secure and it is not always possible to identify an authentic e-signature. This could be particularly problematic in the context of individuals making a will or lasting power of attorney (LPA).

Commercial context

The current legal framework for the validity of e-signatures in a commercial context within the EU is dealt with by the eIDAS, which distinguishes between ‘simple’, ‘advanced’ and ‘qualified’ e-signatures.

Simple e-signatures include someone’s typed name on a contract or a scanned manuscript signature. Simple e-signatures do not provide a great deal of certainty that the signature is made by the purported signatory. The circumstances of the creation of simple e-signatures may therefore have to be examined to assess their probative value, which could be more evidentially challenging than with a manuscript signature.

Advanced e-signatures (AES) use a web-based platform to apply a signature to a document. An AES is uniquely linked to the signatory; capable of identifying the signatory; created using signature-creation data which the signatory can solely control with a high level of confidence (eg encryption by means of a private key which only the signatory can access); and linked to the document being signed, so that any subsequent change to the document can be detected. Authentication is provided through a digital certification by a trusted certificate authority. AES go some way to managing the risk of fraud when compared to simple e-signatures.

A qualified electronic signature (QES) possesses the highest level of security and probative value. A QES is an AES created by a qualified electronic signature creation device, which uses a digital certificate authenticated by a qualified trust service provider (TSP) whose credentials are published by a member state. TSPs enable the creation, verification and validation of e-signatures. A QES has the same legal value and admissibility as a handwritten signature.

E-signatures and wills

The conclusions of the Law Commission paper do not apply to wills. Another Law Commission consultation paper, ‘Making a will’, confirms that wills cannot currently be signed by way of e-signatures, as doing so would likely not comply with the formalities of the Wills Act 1837 (eg the requirements to be in writing and for the witnesses to be physically present and in the same room as the testator).

It is conceivable, however, that a future change in the law could allow wills to be signed and witnessed electronically. ‘Making a will’ proposed giving the courts a ‘dispensing power’ to allow a court to recognise a will as valid, even where it does not comply with the requisite formalities (such as the requirement for the testator’s signature to be witnessed). In the Australian case of Re Nichol [2017] QSC 220, an unsent text message was accepted as a valid will. In Payne v Payne [2018] EWCA Civ 985, it was held that a witness need only write their name on a will (and need not sign) with the intention of witnessing it for the witnessing to be effective. Given this current trajectory, there may be growing momentum for the use of e-signatures to be expanded to allow wills to be signed electronically. Given the evidential issues surrounding simple electronic signatures, electronic wills would need to be authenticated by a signing process at least as robust and secure as QES, which are less susceptible to fraud and raise fewer questions over an authenticating intent.

The relative complexity of QES, however, may be unsuitable for elderly or vulnerable individuals, who would most need to be able to access such technology securely and easily. It should not be presumed that users should be capable or willing to use e-signing platforms. Further, it may not be possible for those without a digital footprint or the appropriate technology to sign up to e-signature platforms. These issues are most likely to arise where elderly or vulnerable individuals are involved, where rigorous security is most necessary.

If users of e-signature platforms have to enlist outside help from friends or family to assist in their use, this could create issues of alleged undue influence and / or lack of testamentary capacity, and could increase future evidential burdens where a will is challenged. This is the case even if something akin to a QES were to be used, as use of a QES would arguably not obviate allegations of undue influence or lack of testamentary capacity.

E-signatures and LPAs

Where there is a statutory requirement for a deed to be signed in the presence of a witness who attests the signature (such as with LPAs), this necessitates the physical presence of a witness (precluding, therefore, the idea of witnessing by video link—at least under the current law). The Commission’s view is that witnessing fulfils an important evidential function and therefore goes some way to protect against fraud.

Nevertheless, the Commission proposes that witnessing a signature by video link or an e-signing platform ought to be possible in future. This could lead to difficulties in relation to LPAs, which must be signed and witnessed in a specific order to be registered by the Office of the Public Guardian. Evidential difficulties could arise in attempting to demonstrate that this order was followed were e-signatures to be used (unless the e-signing platform noted the precise time of signing and witnessing).

A further, major, difficulty (and one which is common to both wills and LPAs) is that an individual who is frail or whose mental capacity is borderline could be led to sign an LPA by an unscrupulous relative or companion. This could be all the easier if e-signatures were used, particularly if the signatory’s e-signing platform login details are known to others. Again, the use of a QES would not necessarily prevent abuse in such circumstances. Mere identification of the signatory—even if done through a QES—is not necessarily sufficient to prevent fraud or abuse. Nor is identification sufficient to demonstrate mental capacity. In both cases, external factors must be taken into account to rebut allegations of fraud or to demonstrate mental capacity. These would be no less difficult to establish where LPAs have been made through using e-signatures.

The future

It is reassuring that the Law Commission has proposed setting up a government-backed industry working group to consider practical and technical issues which may arise in using e-signatures. The obvious benefits of e-signatures should be balanced against the possible evidential burdens and safeguarding requirements. If the use of e-signatures is rigorously scrutinised and controlled to safeguard against fraud, abuse and undue influence in the context of wills and LPAs, the problems highlighted are not insurmountable, and their future use may be workable.

This article was originally published in New Law Journal and can be accessed here.