Katrina Wood
Faced with yet another request to certify that a document had been signed in accordance with the Contract and Commercial Law Act 2017 (CCLA), I had to put pen to paper.
Why should this be?
Electronic signing should make transactions faster, cheaper and easier. But in practice, electronic signatures are often subjected to more scrutiny and process than wet-ink signatures, even where the commercial risk is the same or lower.
The problem is not validity. Electronic signatures can be valid, and often are. Rather, the problem is that no one seems quite comfortable enough to apply ordinary judgment to them. As a result, parties still spend time debating signing methods, reviewing platform certificates and seeking certifications, even where the transaction risk does not justify that level of process.
This is not simply a drafting problem in the CCLA. The legislation is flexible and, in any event, ss 226–228 apply only to documents that legally require a signature (a point the market seems at pains to ignore).
Rather, the difficulty is that flexibility, limited practical guidance and conservatism have pushed execution risk towards professional caution rather than a sensible assessment of the actual risk.
The contrast with wet-ink signing is revealing. A handwritten signature often does little work; many are illegible and unwitnessed. But they are usually accepted because of the surrounding context: the document, signature block, email trail, solicitor involvement, commercial relationship and wider transaction record.
Electronic signatures are treated differently, with the mechanics of signing being heavily scrutinised: the platform used, certificate generated, authentication method and solicitor certification steps.
The presumption of reliability in s 228 of the CCLA is intended to help. It attempts to create a safe harbour and asks whether the means of creating an electronic signature was linked solely to the signatory, was under the signatory’s sole control and allowed later changes to be detected.
The problem is that even when a recognised secure signing platform is used, unless a solicitor was in the room with the signatory, it is impossible for the solicitor to know whether the presumption is definitively engaged. Despite that, solicitors are routinely asked to confirm compliance with ss 226–228 of the CCLA and to effectively underwrite electronic execution risk in a way rarely required for wet-ink signatures.
Cost and productivity implications
The practical objection is economic. Every additional signing requirement adds a small cost: another email, certificate, client call, review point or settlement query. Across thousands of transactions, that becomes a real drag on productivity.
The philosophical objection is my sanity. Every additional signing requirement makes me pause and ask: is this why I became a lawyer?
Electronic signing is not the problem. The problem is the disproportionate processes that have grown up around it. If electronic execution is to deliver on its promise, then the market needs to focus less on ritualised certification and instead start from a simple proposition: if a wet-ink signature would be accepted in the circumstances, then an electronic signature should generally be accepted too.
The professional difficulty of course is that no individual practitioner wants to be the one who pushes the boat out and tries to set a new market normal.
This is because market practice inevitably becomes one measure of proper solicitor behaviour and if something later goes wrong, it is unlikely to be much comfort that the approach was legally available if it is said not to have been professionally prudent.
So where to from here? Short of law change, I suspect we wait for electronic signatures to become so routine that market practice, helped along by a little innate laziness, finally relaxes.
Katrina Wood is a principal at Saunders Robinson Brown Ltd and a member of The Law Association’s Documents & Precedents Committee
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