Back in 2016, the Law Commission launched the 13th Programme of Law Reform and sought the opinion of the general public on key issues they believe require urgent reform.
The consultation received over 1,300 submissions, covering 220 different areas of focus. Those 220 topics have been narrowed down to just 14 with the Government announcing an intention to reform the chosen areas.
Although each of the 14 topics is significant in its own right, the ones we focus on in this blog are the most important in the financial sector. They are:
- electronic signatures;
- smart contracts; and
- intermediated securities.
Reform in these areas is intended to boost ‘Global Britain’ and help to maintain, and even enhance, the UK’s competitiveness as the country leaves the European Union.
Electronic signatures
There are only a few cases which consider electronic signatures and we are yet to see a case which explicitly confirms that documents executed by an electronic signature satisfy the statutory requirements for signing. As a result, there is still nervousness that the validity of electronic signatures remains open to challenge.
Respondents to the consultation expressed particular concerns around how an electronic signature should be witnessed – look out for our upcoming Talking Finance blog ‘Witnessing well’, for more on the importance of witnessing a signature.
Seemingly, the Law Commission appreciates that we are living in an increasingly digital age and that the large extent of business is conducted online. By reforming this area of law, it will allow UK businesses to move towards a fully electronic system which will allow transactions to be completed faster and more efficiently, a change which is, arguably, long overdue. The Law Commission would look to address the uncertainty surrounding the validity of electronic signatures in all types of contracts.
