The accelerated adoption of electronic signatures and embracing of technological document solutions has not removed the need for a witness to be physically present... yet.
When we look back at 2020, in among all the chaos and worry, we will recognise it as a year of tremendous progress in terms of how we deal with documents. The significant logistical challenges of circulating, executing and completing traditional documents during a pandemic forced us to question centuries old practices. The acceptance by the Land Registry of so-called 'Mercury deeds' (May 2020) and electronic signatures (July 2020) represented a seismic shift, facilitating the adoption of technology-led solutions that would previously have been unthinkable in property transactions. Life will never be quite the same again.
But one thing has remained constant, even in COVID times. Whether using new fangled electronic signature platforms or traditional paper engrossments, the requirement for a witness to attest and sign the document remains unchanged. And, if a witness is required, they must be physically present when the signatory signs the document. It seems the world is still not ready for documents to be witnessed by videolink.
When is a witness required?
Witnesses are not required for:
Witnesses are required for deeds executed by:
The Law Commission's 2019 report on Electronic execution of documents is widely credited as paving the way for the widespread adoption of electronic signatures during 2020. However, despite concluding that electronic execution is acceptable (even for deeds) within the current legislative framework, the Law Commission concluded that, as the law currently stands, the statutory requirement for deeds to be signed 'in the presence of' a witness requires the witness to be physically present. Remote or virtual witnessing is not enough.
The Law Commission's view was quoted by the First-tier Tribunal in Yuen -v- Wong. That case, heard in November 2019, concerned a document signed in Hong Kong that had purportedly been witnessed by a solicitor in London during a meeting conducted over Skype. The Tribunal concluded that there was a 'reasonable prospect' of a court ruling that the document had not been properly witnessed and therefore failed as a deed.
For transfers, leases and other documents that require registration, the requirement for witnessing to take place face-to-face is put beyond doubt by Land Registry Practice Guide 8 - execution of deeds:
'HM Land Registry continues to require that the witness be actually present when the deed is signed, the witness then adding their signature.'
Even though the same principles apply whether the document is signed in wet ink or electronically, the Land Registry suggests that electronic documents should contain an additional confirmation by the witness to reinforce the point:
"I confirm that I was physically present when [name of signatory] signed this deed."
Notwithstanding this insistence on the witness being physically present, if electronic signatures are being used the Land Registry requires the witness to receive its own one-time password by text message in order to access the document. This requirement is causing difficulties for users of certain signature platforms, which do not currently offer this functionality.
Interestingly, even though the witness is required to be present when the signatory signs the document, the reverse is not true. In another 2019 case, Wood -v- Commercial First Business Limited (in liquidation), the High Court held that so long as the witness was present when the signatory signed, it did not matter that they were no longer together by the time the witness signed. However, there is authority to the effect that the deed may not be validly executed if the gap between the signatory and the witness signing the document is too long.
The requirement for the witness to be physically present does of course have the potential to create difficulties (and dilute the benefit of using electronic documents) in COVID times, if it requires people from different households to get together. There are however several ways to ease the pain.
Physical presence does not necessarily require the signatory and witness to be huddled together over a desk. Witnessing can take place outdoors, respecting social distancing guidelines. Land Registry Practice Guide 8 goes further:
'... there is no reason why the witness and signatory cannot be separated by glass, so a signature could be witnessed by someone looking through a car or house window – if, of course, they were then able to see clearly the signatory signing.'
Furthermore, there is no legal prohibition on members of the same household acting as witness. In fact, there are surprisingly few strict rules on who can and who cannot act as a witness. One party to a deed cannot witness another party's signature, but there is no requirement for independence. A spouse, civil partner or co-habitee can therefore be a valid witness. So can a minor.
In normal circumstances, best practice would dictate that such persons should not act as witnesses, but these are not normal times and do we not always have that luxury. What is practicable and acceptable will need to be ascertained and agreed on each transaction. However, many lenders' standard instructions still prohibit members of the same family or household from witnessing security documents.
Some companies and limited liability partnerships are finding it easier to sidestep the witnessing issue altogether by reverting to execution by two authorised signatories, rather than single director or member with witness.
The Law Commission recommended that the government should consider legislating to specifically permit video witnessing, but there is an even more extreme possibility. Having opened the Pandora's box of electronic signatures, the Land Registry is already exploring the possible adoption of qualified electronic signatures (QES). QES is a more sophisticated form of electronic signature, where the signatory uses biometric ID to verify their identity when signing a document. When this is implemented (and it is a question of when, not if), the Land Registry will remove the requirement for a witness altogether.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.