Minerva: Digital signatures and identity – where is it going?
In September 2019, the Law Commission confirmed that electronic signatures could be used to execute documents, including where there is a statutory requirement for a signature. As a result, the Commission hoped to “end uncertainty and increase confidence in the use of this technology”. Nevertheless, two years later, many legal providers are still unsure about using electronic signatures.
Three types of digital signatures
Three different types of digital signatures are applicable under UK law.
- Basic or Simple Electronic Signature (SES)
The electronic equivalent of a handwritten signature, SES uses technology (e.g. a tablet and stylus) to generate a signature. You don’t have to be present to supply a basic electronic signature; a name typed in an online form or document could also apply. SESs are easy to provide, but they are not suitable for high-value processes as they are relatively easy to forge and do not allow for easy and robust identity checks.
- Advanced Electronic Signature (AES)
AES is more secure than SES as it must be:
- uniquely linked to the signatory
- capable of identifying the signatory
- created using electronic signature creation data that the signatory can, with a high level of confidence, use under their sole control.
- linked to the data signed in such a way that any subsequent change in the data is detectable.
- Qualified Electronic Signature (QES)
QES is the most secure digital signature method. It is created by a Qualified Trust Service Provider (QTSP) and supported by a qualified certificate (also supplied by the QTSP). Ensuring confidence that the signer is who they say they are, QES is compulsory for certain high-value transactions in some countries. QES tends to be more costly, but when you consider the need to protect your clients and your business against fraud, the benefits do outweigh the additional spend.
Law commission report in 2019
In its 2019 report, the Law Commission explained that the validity of electronic signatures was supported by the common law in England and Wales which “has always been flexible in recognising a range of types of signature, including signing with an ‘X’, initials only, a printed name, or even a description of the signatory such as “Your loving mother”. “
It also highlighted the EU eIDAS regulation, which states that “an electronic signature cannot be denied legal validity simply because it is electronic.” Nevertheless, the Commission was clear that the relevant formalities – such as the signature being witnessed and authenticated – are still necessary.
The Commission’s findings do not create a new law, or affirm current law, but they do mean that a court would likely find an electronic signature to be valid.
Does the digital signature go far enough?
In today’s online world, we all use technology to make our lives hassle-free, and we are used to speedy service. We expect the same efficiency when it comes to the law. The Law Commission’s confirmation that electronic signatures are valid is one way to improve the legal process for clients. Still, firms must adopt a holistic digital approach to keep up with the pace of change. Digital signatures are just one small part of the puzzle.
To deliver the service modern clients want, firms must ensure that all their processes are digitalised. This includes:
- Instant quotation tools which let clients review and accept quotes online
- Convenient digital ID and AML checks to reduce client frustration levels
- The ability to share documentation electronically
- Form filling and contract creation
- Accessible communication tools which deliver a consistent and responsive customer experience
- Regular digital updates
- Real-time access to case information in an easy-to-read format, from anywhere on any device (e.g. cloud-based customer dashboards and trackers)
- Payments
By empowering clients to complete and submit digital forms, share information electronically, and pay online, firms will benefit from a smoother process, a reduced admin burden, a more transparent audit trail, and happier clients.
A new self-service age for the client?
Today’s clients often don’t want to speak to anyone on the phone or in person when purchasing a product or service. Instead, they want to send a quick message or log in to get all the information they need. This is as true for those buying legal services as it is for other types of businesses. As such, self-service has become a hot topic, with more and more firms looking at how they can empower clients to conduct as much of the legal process as possible on their own.
The onboarding process is a great place to start for firms keen to see quick and easy improvements in this area. With the right technology, clients can check out a firm’s services online, sign up using a digital form, enter details specific to their needs and circumstances, and complete the electronic identification verification (also known as eIDV) process quickly. For example, with Minerva, the whole onboarding process can be done in just 24hrs, compared to a two-week manual process.
What are the risks and challenges?
Regardless of the benefits, there are risks and challenges that need to be addressed before the adoption of digital signatures, and other identity technology, become widespread.
Proving intent
For a document to be valid, you must prove that the signatories intended to enter a contract should someone later decide to challenge its authenticity. So how do firms demonstrate intent when a document is signed digitally?
Today, any business that provides firms with the technology to digitalise must include and record the necessary contextual data to verify intent. One simple tool is to ensure that an intent check box (“I accept”) is included in the process. Language that indicates to the signatories that they will be providing their consent when signing is also vital.
Proving validity
A signatory could argue that there is no contract because an electronic signature does not meet the necessary formalities. As we have already discussed, the validity of electronic signatures is supported by the common law in England and Wales. So, it is unlikely that such an argument would be successful.
Verifying identity
Another issue when deciding to adopt digital signatures is ensuring the signatory is who they claim to be. Likewise, measures must be established to protect both parties should a signatory argue that someone else fraudulently signed the contract without their authority. Technology requiring users to verify their identity before signing any documents will help to remove the risk.
Avoiding fraud
There are concerns that electronic signatures are more prone to fraud than traditional handwritten signatures. However, this is a practical issue that can be addressed when the right technology, with all the necessary security measures, is deployed.
Where an electronic signature might not work
All bodies might not currently accept electronic signatures for all documents, but this will likely change as the technology to securely verify becomes mainstream.
In July 2020, HM Land Registry began to accept witnessed electronic signatures. Although, at present, not all transactions currently lend themselves to electronic signatures. Crucially, a witness is still required to be physically present who can also ‘sign’ electronically. However, with the Covid pandemic altering the way we all live and work, this could be about to change. Indeed, in a sign of things to come, legislation now allows wills to be witnessed electronically via platforms such as Zoom and Skype.
In February 2021, HMRC also began accepting electronic signatures on some – but not all – documents. Other documents may also come with a specific set of risks, circumstances, and legal requirements, making them unsuitable or inappropriate for digital signatures (for now at least).
What happens now?
In its report, the Law Commission made several recommendations to address the practicalities of electronic execution, including the creation of an industry working group to consider issues around electronic signatures and video witnessing.
And, despite the challenges, over the last two years we have seen three key drivers progressing the case for digital signatures:
- The pandemic and the need to find new and remote ways of doing things
- Evolving customer expectations
- Improvements in technology and security.
The bottom line is that legal processes must catch up to technological advancements. And for those firms that want to stay ahead of the competition, it pays to take a more holistic view of the digitalisation of forms, contacts, and other documents – starting with the onboarding process.
Minerva brings firms in line with technology-led service industries with faster file opening, secure real-time ID verification, and paperless end-to-end onboarding. With a 97% accuracy rate, with Minerva you can safely and securely verify in minutes. Indeed, the whole onboarding process can be done in just 24hrs, compared to a two-week manual process. Importantly, when it comes to signing documents electronically, the use of such identity verification technology is a gamechanger.
Enjoy a different and intelligent experience with Minerva – get in touch today.
