In its final report on electronic signatures, a government-sponsored industry working group was unable to reach a consensus on whether or how to regulate e-signature platforms.
The panel, which was led by Mr. Justice Fraser and Law Commissioner Professor Sarah Green, reached a consensus on all other points and urged the Law Commission to take e-signatures into consideration when revising the legislation on deeds and statutory declarations.
A multidisciplinary team of legal, business, and technological specialists should be established to analyze practical and technical difficulties and come up with solutions, according to the Law Commission’s 2019 study on e-signatures.
The most advanced e-signatures might be “more trustworthy” than signatures witnessed the conventional manner in an “unsupervised environment,” the organization claimed in its initial report around this time last year.
The panel said that “essential to greater acceptance and usage” of e-signatures was public and commercial trust in e-signature platforms in its final report, Electronic Execution of Documents.
The group, however, was divided on the subject of regulation, with proponents of the “free market” and those of “pro-regulation” positions.
Most participants were “pro-regulation,” believing that “some form of permission or monitoring process is essential so that some order can be imposed on what is, at the moment, the technological Wild West.
There is currently no method for customers or other users (including corporate users) to know the extent to which security and audit demands are met by an e-signature platform that offers its services. Naturally, choosing to use a platform or e-service provided by an established brand in the industry will minimize or even eliminate such concerns, but that may just indicate that there are invisible barriers preventing other, smaller platform providers from gaining a foothold in what is likely to become a significant market.
A “transparent and industry-agreed set of criteria or benchmarks” against which platforms might self-certify was supported by the majority of members.
A minority, however, supported the “free market” viewpoint, claiming that regulation was “undesirable and impractical in practice” and that “only the best (or the adequate) will survive”. It may prevent outside investment, global trade, and innovation.
The cost of a regulatory system is an additional burden, and government decision-making over which body and how it would do so is necessary.
While the government was considering certification/self-certification of platforms for “important transactions” exclusively, the industry association suggested introducing a set of baseline requirements to increase consumer confidence.
Achieving “uniformity of approach to e-signing and online identity by way of an international standard or mutual recognition” is another goal that the government should pursue.
The panel advised “wholesale use of e-signatures by UK government for all government or official purposes,” much like in the interim report.
The legislation governing deeds, in particular the procedures associated with their execution, should be reviewed by the Law Commission.
It should also explore eliminating the necessity for a third party to be engaged in making a statutory statement “and allow declarations to be made fully electronically in a clear way and without danger of invalidity”.
The working group stated that the government should consider setting up a “permanent body” like itself, which should be “fully supported rather than operating on a pro gratis basis”.
E-commerce in general and the usage of e-signatures were deemed to be “so critical for the development of society in the 21st century” that a more “formalized and concentrated” approach was required.
The Future of E-Signatures and Verify 365
The future of e-signatures is bright, and we believe that Verify 365 is well-positioned to take advantage of the opportunities presented by this rapidly growing market. As more businesses and individuals turn to electronic signatures as a faster, more secure, and more efficient way to sign documents, the demand for reliable and trustworthy e-signature platforms will only continue to grow.
We believe that Verify 365 can play a leading role in this transformation, by providing a secure, user-friendly, and cost-effective e-signature platform that meets the highest standards of reliability and security. By working closely with our users, industry stakeholders, and regulatory bodies.
Contact us for more information.