Do electronic signatures work?

In 1952, a solicitor, Charles Goodman, carried out legal services for a company called J Eban Ltd. He sent that company a bill for around £50, under cover of a typewritten letter, which ended “Yours faithfully, Goodman, Monroe & Company”. Below that, a facsimile of the business name in Goodman’s handwriting was affixed with a rubber stamp. When the company objected to the bill, Goodman sued it. The company raised various unsuccessful defences to the claim. One of these was that the letter had not been “signed”, contrary to the requirement of section 65(2)(i) of the Solicitors Act 1932 (“the bill must be signed by a solicitor…”). The company appealed to the Court of Appeal, and lost again, albeit having achieved the considerable feat of persuading Lord Justice Denning that it was right (Goodman v J Eban Ltd [1954] 1 QB 550). In his dissent, Lord Justice Denning said that when a document is required to be “signed by” someone, that means that they must write their name with their own hand on it. He added: “Suppose that he were to type his name; or suppose that he were to use a rubber stamp with his name printed on it in block letters? No one would then suggest that he had signed the document. Then how does the facsimile help it? Only by making it look as if he had signed it, when in fact he has not done so. It is the verisimilitude of his signature, but it is not his signature in fact.” The other two justices disagreed, but with a considerable degree of caution, the Master of the Rolls stating that he had “found the questions raised matters of some difficulty”, and that if he were deciding the matter free from authority, he would probably have agreed that signing could only be carried out by writing the name in one’s own hand. He added that the practice of signing with a rubber stamp seemed to him generally “undesirable”. We have come a long way since then (although the dissent found later support in the decision of the Court of Appeal in Firstpost Homes v Johnson [1996] 1 EGLR 175), with a series of cases illustrating the incremental movement of the law. The following have since been held to amount to valid signatures: signing with an X; signing with initials only; printing a name; and signing with a mark, even where the party executing the mark can write. What is an electronic signature? Are electronic communications different in kind from the examples considered? No, it would appear, although we have probably all entertained some doubt from time to time when considering: whether a signature should be a facsimile; whether the writing made up by the various available PDF tools suffices; or whether a simple typed name will do. The answer to such doubts is that, increasingly, it is being held that anything goes, provided that the “signature” in question was affixed with the authority of the person intending to be bound. Thus, the courts have held that the following electronic indications are valid in cases where there is a statutory requirement to sign (as is the case, for example, with regard to contracts for the sale of land under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989): a name typed at the bottom of an email (Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd [2012] EWCA Civ 265); an email chain containing an electronic signature (Green (liquidator of Stealth Construction Ltd) v Ireland [2011] EWHC 1305 (Ch); [2011] PLSCS 143); and clicking an “I accept” tick box on a website (Bassano v Toft [2014] EWHC 37 (QB)). More recently, we have the guidance given by Judge Pearce in Neocleous and another v Rees [2019] EWHC 2462 (Ch); [2019] EGLR 49 (approved by the Court of Appeal in Hudson v Hathaway [2022] EWCA Civ 1648; [2022] EGLR 10) that an email exchange qualifies as “electronic signatures” and a sufficient act of signing, where there is “a clear intention to associate oneself with the email – to authenticate it or to sign it”, as demonstrated by footers containing names and contact details in the conventional style of a signature, and insertion of such salutations as “Kind regards” or “Many thanks”, each of which showed an intention to connect the name with the contents of the emails. See also Little v Olympian Homes Ltd [2024] EWHC 1766 (Ch), in which the judge thought that simply “BR” would suffice. We have not merely the support provided by those authorities to reassure us, but also the force of statute, in two powerful respects. First, section 7 of the Electronic Communications Act 2000 confirms the admissibility of electronic signatures as evidence in legal proceedings. In the second reading of the Bill in the House of Lords in February 2000, the minister for science and innovation indicated that section 7 was intended to put an end to “lawyers argu[ing] about whether or not electronic signatures would be recognised as valid by the courts”. The minister added: “We cannot afford to wait while lawyers argue and courts decide. Instead, Clause 7 will allow business and consumers to have confidence in electronic signatures.” Commenting on the same provision in Bassano, the late and great Popplewell J said that section 7 “recognises the validity of such an electronic signature by providing that an electronic signature is admissible as evidence of authenticity”. Second, Article 25 of Regulation (EU) 910/2014 on electronic identification and trust services for electronic transactions in the internal market, which remains incorporated in our domestic law notwithstanding Brexit, provides that electronic signatures cannot be denied legal effect (in terms of legal validity or admissibility as evidence) solely because of their electronic nature, and that a qualified electronic signature “shall have the equivalent legal effect of a handwritten signature”. For these purposes, “qualified” means that the way in which the signature is created meets requirements as to confidentiality, security and reliability. Lingering doubts So, can we now be completely confident in using electronic signatures? Not quite. First, none of this applies where statute imposes additional requirements (as is the case, for example, with land registration, deeds and wills). Second, in some contexts it remains unclear as a matter of authority whether particular forms of electronic “signature” will suffice (particularly where there is a default footer, without any obvious connection to the sender). Third, as the learned authors of the 2019 Law Commission report Electronic execution of documents (Law Com 386) (from which we have gained considerable assistance in writing this article) noted, the mere affixation of an electronic signature says nothing about the likelihood that it was actually affixed by the person purportedly signing (in contrast to a wet ink signature, in respect of which the recipient may repose greater confidence). The Law Commission therefore recommended the setting up of an industry working group to carry out research into technology that may provide greater assurance on these matters – a suggestion that we wholeheartedly endorse. Guy Fetherstonhaugh KC and Toby Boncey are barristers at Falcon Chambers Photo © Carrie Allen/Unsplash