COVID-19: Law Society's Guidance On The Use Of Virtual Execution And E-signatures

• Published date: 06 August 2020
• Subject Matter: Strategy, Privacy, Coronavirus (COVID-19), Privacy Protection, Technology, Operational Impacts and Strategy
• Law Firm: Beale & Co
• Author: James Hutchinson and Emily Hunt

Background

The Law Society has recognised the current pandemic and social distancing rules has increased the need for solicitors and clients to be able to close deals without being face to face. This has led to an increase in the use of virtual executions and the use of e-signatures as a practical means for completing transactions in a timely manner.

For a number of years, the Law Society has promoted the use of virtual execution and e-signatures in order to facilitate legal transactions in an increasingly digital world.

To this end, it had issued the following practice notes:

. Practice note, issued on 16 February 2010, on the execution of documents by virtual means following the decision of the High Court in Mercury Tax Group (and another) v HMRC [2008]; and;

. Practice note on the execution of a document using an electronic signature, issued on 21 July 2016.

The Law Society has confirmed these practice notes continue to apply during the pandemic and the law in these areas remains unchanged. However, the Law Society has issued a recent note which aims to bring the previous notes to the attention of all solicitors and to provide an update on recent relevant advances in the use and acceptability of electronic execution.

Updated guidance published on 18 June 2020

The update includes tips on how to operate in practice during the pandemic, with the aim being to support solicitors and their clients to complete a transaction by virtual execution with confidence.

The key tips are as follows:

1. Best Practice

. The Law Society's practice notes, as noted above, should be followed.

2. Agree

. Speak to the lawyers on the other side of any transaction to ensure there is clear agreement on how to manage the transaction.

3. Verify

. Consider what steps (if any) you wish to take to verify the identity and authority of each person signing beyond that which is required by law, including the anti-money laundering regime.

. How best to do this may depend on common practice in the relevant area or specific regulatory requirements. For example, on certain transactions solicitors may be involved in checking the identity of a signatory, the authenticity of a signature and/or whether a document has been properly approved. On other transactions the identity, authenticity and approval can be assumed. The use of electronic signatures will not change this.

. If authenticity cannot be assumed, practitioners may wish to use additional and objective sources of verification. This could...