Electronic Signing Of Documents In Scotland

• Published date: 29 May 2020
• Author: Ms Ann Stewart, Christina Sinclair and Neil Campbell
• Subject Matter: Corporate/Commercial Law, Family and Matrimonial, Corporate and Company Law, Contracts and Commercial Law, Trusts, Wills/ Intestacy/ Estate Planning
• Law Firm: Shepherd and Wedderburn LLP

The enforced lockdown brought about by COVID-19 has meant a drastic change in the way business is carried out. One practical impact of isolation is that it has become less convenient to have contracts and agreements printed and signed in the traditional "wet ink" way. Parties are therefore increasingly looking to alternatives; particularly electronic signature of transactional documents. In this article, we take a look at what is meant by electronic signature under Scots law, some of the risks involved and points to bear in mind when considering electronic signing.

What is an electronic signature?

An electronic signature simply means that some data in electronic form has been 'used' by a person to sign, or otherwise signify agreement or consent as an equivalent to a signature. When you check the 'I agree' or 'Submit' box in an online form, or when you paste a copy of your handwritten signature into a PDF document, you are signing a contract electronically.

That type of electronic signature is known colloquially, if not legally, as a 'simple' electronic signature, but it is an electronic signature nonetheless, and so is governed by the EU Directive on electronic identification and trust services for electronic transactions (eIDAS), and the Electronic Communications Act 2000. But not all electronic signatures are equal, and in commerce and business dealings, if you want to use an electronic signature, it needs to be understood that different types of signature have different effects.

eIDAS recognises three types of electronic signature: 'simple', 'advanced' and 'qualified'.

In Scots law, the majority of documents can be validly signed using a simple electronic signature. However, there are issues around the security and reliability of a simple electronic signature, which are considered in this note.

Some documents cannot be signed using a simple electronic signature. First, any document that must be 'in writing' in accordance with the Requirements of Writing (Scotland) Act 1995 (for example, documents dealing with interests in land, and some trusts and guarantees). Second, documents that must be signed on paper - for example wills and other testamentary documents, or documents which are to be registered in the Books of Council and Session.

Simple electronic signatures

In basic terms, an electronic signature is data in electronic form that is attached to or 'logically associated' (i.e. electronically connected) with other data in electronic form, and which is used by the signatory to sign. Simple electronic signatures are the ones most commonly encountered, such as scanned manuscript signatures; using a finger or stylus to sign on a screen; clicking on an onscreen button such as 'I agree' or 'Submit'; and using a PIN with your bank card.

There are other types of simple electronic signature that are more sophisticated and therefore of greater reliability, but due to the inability to be able to link them with the actual signatory, they are still in the category of simple electronic signatures. Typical examples are the type of electronic signature that uses a signing platform such as Adobe Sign' or DocuSign'. The use of these is becoming more prevalent in commercial contracts, for example, where the need to be self-proving is not strictly necessary.

A practical disadvantage of most commercially...