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Electronic signatures – who needs them?

1 February 02

Electronic signatures are coming and nearly every practitioner will need one

by Motion, Paul; Brewster, Gordon

If you undertake Legal Aid work, Small Claims, Conveyancing, Corporate work or have a practising certificate – the answer is you, probably.

In the last article, Gordon Brewster and I attempted to rationalise the case for electronic signatures in comparative terms. We looked at the visual and other cues that persuade people to ‘trust’ a paper document. We suggested that concerns over the trustworthiness of electronic signatures could be overcome. In this article we will look at the emerging statute law and regulation.

Where as a matter of Scots law do I still require a probative written document?

The following list is illustrative:

  • Requirements of Writing (Scotland) Act 1995
  • Assignations of Copyright (CDPA 1988 s  90(3)
  • Regulated Consumer Credit Agreements (Consumer Credit Act 1974 s 61)
  • Marine Insurance Contracts (Marine Insurance Act 1906 s.22)
However, it is understood that for the forseeable future the requirement for paper in relation to contracts for the sale and purchase of heritage will remain. Electronic signatures will first of all therefore become relevant to dispositions, standard securities, floating charges and the like.

How can digital information be a “writing”?

Interpretation Act 1978 Sch.1 is very wide. It defines writing as  –

“Typing, printing, lithography, photography, and other modes of representing or recording or reproducing words in visible form”

But surely a ‘document’ at least has to be printed off on paper?

See Rollo v HMA 1997 JC 23. Held on appeal that essence of a document is the information recorded on it. Here material found by police on a Memomaster electronic notepad constituted a ‘document’ even though the information required to be processed by decoding retrieval or electronic translation. A ‘document’ meant the information the electronic notepad contained, notwithstanding that the common usage of the word referred to the means of storage, or the surface upon which it is written.

What can a digital signature do that a holograph signature can’t?

All of the following. It proves who signed the document, who sent it, when they sent it, and that what you receive is exactly what you were sent, with no hacking in transit.

Why should I care about digital signatures?

  • Law Society policy is to progress the use by the Scottish legal profession of electronic signatures supported by a qualified certificate.
  • Legal Aid forms may soon be available, and able to be completed, on-line.
  • Small Claims cases may be on-line by the end of 2002.
  • Automated Registration of Title and Electronic Conveyancing is already being piloted.
  • To stay competitive; and to keep up with the expectations of clients whether individuals or corporations, banks or insurers.
  • Finance Act 1999 section 132 – sweeping powers to permit electronic tax returns etc
  • Companies House and Data Protection Notifications can already be filed on line.
Are electronic signatures already law in Europe?

Yes. The EU has issued two Directives. First, the E Commerce Directive [2000/31/EC OJ L178 17 July 2000]. This applies to ‘Information Society Services’ – provided for remuneration at a distance by electronic means at the individual request of a recipient. National Laws must not prevent effective use of e-contracts deprive such contracts of legal effect or validity. The UK was supposed to implement the Directive by January 2002, but the DTI acknowledges it will be summer before this happens. There are problems with this Directive, not least because on issues of legal liability it starts from the premise that the laws of the country of origin apply to a dispute, whereas other recent EU regulations – such as the controversial ‘Brussels Regulation’ that comes into force in March 2002 – say that the laws of the country of destination prevail.

The second Directive is the Electronic Signatures Directive  [OJ L 013 19/01/200 p0012-0020 Adopted by Euro Parliament 13 Dec 1999]. This creates two categories of electronic signature. Article. 5.1 defines “Advanced Electronic Signatures”. These have to be backed up by certificate [‘Qualified Certificate’] issued by a trusted third party. Electronic signatures supported in this way will be probative. Article 5.2 refers to Other Electronic Signatures. These are not to be denied legal effect just because they are not backed up by Qualified Certificate, though they are not probative.

Are Electronic Signatures also law in the UK?

Only partial implementation of the Electronic Signatures Directive has been achieved so far.  The Electronic Communications Act 2000 states that  “7(1) – In any legal proceedings:

(a) an electronic signature incorporated into or logically associated with a particular electronic communication or particular electronic data, and

(b) the certification by any person of such a signature,

shall each (our emphasis) be admissible in evidence in relation to any question as to the authenticity of the communication or data or as to the integrity of the communication or data.”

This is a controversial wording, since it seems quite clear from the Directive that evidence of one or other limb by itself is insufficient evidence of such fundamental matters.

The DTI is consulting from now until the end of March on its draft ‘Electronic Signatures Regulations 2002’. These will implement the remainder of the Electronic Signatures Directive. The main definition of interest is “Advanced Electronic Signature”. This means a probative e-signature. To attain this status the relevant technology will need to:

  • Uniquely link the  signature to the signatory
  • Identify the signatory
  • Create the signature using means the signatory can keep under his/her sole control
  • Link the signature to the data to which it relates so that any subsequent change is detectable.
Whatever electronic data is used to verify that an e-signature is yours must also be electronically linked to an electronic certificate that identifies you. The certificate the Society has in mind will  achieve points (a) to (d) above,  and more in that the certificate will comply fully with both Schedule 1 and Schedule 2 of the Directive. Certainly the Society is ideally placed to be able to certify who is and is not a Scottish solicitor. There is an indemnity issue attending such a role, since Regulation 4 of the draft Regulations seeks to impose certain liabilities on certificate providers as regards persons relying on the certificate. The Society is in discussion with Marsh on this and related matters.


Electronic signatures (or digital signatures, call them what you will) are just around the corner. Many of the Scottish legal institutions that you all know and love  are taking a hard look at this area. Naturally many of your clients and competitors are doing the same. If there is just one IT area to watch in 2002 it is ‘security’ but in the practical sense. So find out more  - did you appreciate for example that an electronic ‘signature’ is something applied to the entire transmission, not just the end? If not, find out about  PKI basics, and also ISO 17799. If you can’t face that, get a trainee or IT manager to do so and explain it in plain English. Or contact any member of the Society’s Electronic Commerce Committee.

Paul Motion is the Convener of the Society’s Electronic Commerce Committee, chairperson of the Scottish Legal group of E Centre, and a partner with Ledingham Chalmers.

Gordon Brewster is Director of IT at the Law Society of Scotland.