COVID-19 restrictions have increased the focus on the logistics for the execution of documents and the use of electronic signatures.
Electronic signatures can be validly used in many circumstances, with their use governed in Ireland by the Electronic Commerce Act 2000 and Regulation (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market (the ‘eIDAS Regulation’).
TYPES OF SIGNATURE
The forms of electronic signature recognised are:
Whilst Irish and European legislation confirm the validity of electronic signatures, a number of factors should be considered in advance of their use, including the type of document to be executed, the form of execution required, the constitution of the parties (where the parties are corporate entities), the powers of the individuals concerned, the governing law of the document and the provisions of any applicable legislation.
The appropriateness of simple electronic signatures should be considered with regard to the nature of the document or the transaction involved. There may be a greater risk of repudiation when using a simple electronic signature than would be the case if an advanced or qualified electronic signature were used, in circumstances where they are capable of providing a digital audit trail. Accordingly, an advanced or qualified electronic signature may be more appropriate depending on the value of the document and the potential risk to the parties.
Electronic signatures cannot be used on:
It is recommended that documents are updated to include provision for the use of electronic signatures, or, alternatively, that the consent of the parties to the use of electronic signatures is obtained in advance of execution. Specific requirements exist for public bodies, with advance consent necessary and specific IT requirements of the public body to be met. It is possible that a combination of execution methods can be used whereby one party uses an electronic signature while another party uses a wet-ink signature.
Where a signatory uses an electronic signature the witnessing requirement is met where the witness is physically present when the signatory applies their electronic signature and the witness then applies their electronic signature underneath as witness or witnesses using a wet-ink signature.
Where an electronic version of a document is to be retained as the sole original it is required that this is retained in a permanent form. The parties should agree to the electronic storage of the document, which may involve the saving of the document in a PDF format in an online depository.
While there has been reluctance to use electronic signatures to date, it is increasingly likely that the current crisis will see businesses further embrace the approach. As the use of electronic signatures increases there is likely to be a demand to permit their use in a wider context, including in property transactions and court proceedings.
For further information please contact Andrea de Courcey (Solicitor), Eoin Mackessy (Solicitor), or your usual AMOSS contact.