With the increasing digitization of business processes across the globe, demand for trusted e-signatures with its legal validity and legal acceptance is rising quite rapidly, especially in the financial verticals. The reason behind an increasing demand for e-signature is because of the many advantages associated with its deployment in different types of Business Process Management (BPM) models.
Today, e-signature is deployed by many organizations to enable digitization of their entire workflow, although the driving force behind a mass implementation is held back in the legal validity of e-signatures as enforced in different parts of the world. The status of the legal acceptance of e-signatures is imperative to the elimination of the last barrier present in most of the semi-automated paper-to-digital-workflow processes.
Increasing Demand of e-signatures in Business Process Management
In a conventional business process model, only physical signatures made on a piece of paper enjoyed the legal acceptance, but now the business scenario is changing with the onset of IT revolution across the globe. Different countries and different States have passed appropriate legislation to check and validate the authenticity of e-signatures.
Fate as well as the acceptance of e-signatures is entirely dependent on the enforcement of legislation across the globe. In this post, I have tried to express my understanding about the legality of e-signatures in many of these countries.
History of e-signatures Legality and Acceptance
Looking back into the pages of history, I found an evidence where even a telegraphic message was accepted as an electronic legal signature and was enforced by the New Hampshire Supreme Court in the year 1869. Later, in the year 1998, the first true electronically signed agreement was witnessed in a Joint Communiqué between United States and Ireland in an effort to promote e-commerce.
What is an e-signature ?
The definition of e-signature as given under the U.S. Code applicable within the purview of US law states that –
An electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”
Status of e-signature Laws in Countries Across the World
Looking at the related Laws framed by different Countries and States for the recognition and acceptance of e-signatures, I found that most of the Laws have already made some provisions regarding the legality of e-signatures. Some of the laws worth the mention includes
- Uniform Electronic Transactions Act, U.S.
- Electronic Signatures in Global and National Commerce Act, U.S.
- Electronic Communications Act 2000, United Kingdom
- Personal Information Protection and Electronic Documents Act, Canada
- European Directive 1999/93/EC, European Union
- Electronic Transactions Act 1999, Australia
- Information Technology Act 2000, India
- Electronic Transactions Act 2002, New Zealand
- Law of the People’s Republic of China on Electronic Signature 2005, China
- Law Concerning Electronic Signatures and Certification Services 2000, Japan
- E-Commerce Act 2000, Mexico
- Singapore Electronic Transactions Act 1998, Singapore
- The Electronic Communications and Transactions Act 25 2002, South Africa
In many cases, no direct reference is given about the non-acceptance of e-signatures. Simultaneously, it also does not invalidates an electronic signature merely on the ground of the signature being taken using an electronic device.
Physical Handwritten Signature vs e-signature
After going through an in-depth study of some of the laws and clauses regarding the legality of e-signatures, it can be easily concluded that there are certain terms and conditions laid down for validating a signature to be treated as a legal entity to prove the acceptance of the person making such signatures .
If you can validate an e-signature on the same grounds as physical signature, it holds its legal validity in a Court to prove the intention of acceptance in a contract made between the parties involved in executing the contract, even in digital form. The basic hindrance with e-signatures lies in its legal authentication and a way to prove that the e-signature has been rightly made with the correct intention, as required in case of handwritten signatures on paper.
Proving the Legality of e-signatures in Court?
In case of e-signature disputes reaching to Courts for resolution, it may get difficult for the complainant to prove that the e-signature was made in good faith with reference to the related contract. It may also be difficult to prove that the e-signature has not been forged, rather it is an authentic signature made by the signer himself.
In order to enforce the legality of e-signatures, the technology used for taking e-signature must be fully equipped to present a logical enforceable proof in the Court to prove the validity of e-signatures.
Foundational Infrastructure for the Legality and Acceptance of e-signatures
Capacity to prove the legal validity of e-signatures seems to be the foundation behind the legal acceptance of e-signatures in most of the countries and states. It is because of this reason that the implementation and acceptance of e-signatures is highly dependent on its legal acceptance by the government.
Although, most of the governments have also laid down certain clauses related to certain cases, wherein any contract made in electronic form is considered void without any further consideration. You must check the applicability of these clauses in your own country to understand that your case does not falls under the pursuit of cases listed as exceptional to e-signatures acceptability.
Legal and Non-Legal Status of e-signatures in Different Countries
In the light of the legislation and countries of their enforcement, the legality of e-signatures can be categorized into three different groups.
1. Countries enjoying the same Legal Status for both e-signatures as well as Physical Signatures
United States, Australia, United Kingdom, Canada, Spain, Finland, Singapore, Hong Kong, Chile, Switzerland, United Arab Emirates, South Africa, New Zealand, Colombia, Portugal, Ireland, the Netherlands, South Korea, Peru and Philippines treat e-signatures at par with physical signatures (handwritten signatures done on paper by pen).
No differentiation between e-signatures and physical signatures is made subject to the condition that the signatures are free from the practice of any fraudulent impression.
2. Countries where e-signature Enforcement Laws are present, but Physical Signatures are considered Superior
Russia, Japan, China, Czech Republic, France, Belgium and India have framed e-signature Enforcement Laws, but even today physical signatures in these countries are considered above par as compared to e-signatures.
It means you can use e-signatures for digitizing business processes in these countries but you may face some hardships, in case, the convict refuses to acknowledge his/her electronic signature. The electronic signature technology may have to stand a test to prove the validity of e-signatures in such cases.
3. Countries Missing Clear Directives on the Implications and Legality of e-signatures
As mentioned earlier, most of the countries have passed legislation in some or the other form. Although, some countries are still missing on explicitly laying down clear directives on the implications, acceptance and legality of e-signatures.
Legality of e-signatures in Brazil, Malaysia, Sweden, Mexico, Thailand, Indonesia, Austria, Germany, Macao, Taiwan, Uruguay, Argentina, Denmark, Italy, Poland, Turkey, Hungary, Israel, Romania and Norway is still doubtful and thus, electronic contracts supported by electronic signatures is not preferred in these countries.
Business Opportunity for e-signature Provider Companies
Considering the legality of e-signatures in different countries of the world, there seems to be a huge business opportunity waiting for e-signature provider companies such as Kofax SoftPro, DocuSign, Adobe EchoSign and many more.
These e-signature companies need to come up with innovative e-signature validation and fraud protection technologies to ensure that the validity of e-signatures can be enforced in Court so that any occurrence of forged e-signatures can be easily nailed down.
It is true that all the e-signatures are not created equally, so the role of e-signature validation technologies in enforcing the legality of e-signatures becomes quite important.
Kofax SoftPro Uses Automatic Dynamic Signature Verification Engine
Latest acquisition of SoftPro by Kofax has added a new dimension to the deployment of e-signatures in Kofax TotalAgility and across the Kofax Smart Process Application Platform. Softpro has even registered a patent on its e-signature technology and relies on Biometric Standardization to capture e-signatures. Softpro e-signature products are based on ADSV (Automatic Dynamic Signature Verification) engine.
I believe we can expect a new trend developing for e-signatures within Business Process Management as well as Case Management scenarios, and Kofax have placed themselves in a prime position to lead the way. The e-signature technology at SoftPro has incorporated some of the most prominent e-signature attributes such as pressure, flow, direction, co-ordinates, variation etc. to record the uniqueness of e-signatures.
The e-signatures recorded with biometric profile is as unique as a physical handwritten signature made by the signer using a pen on a piece of paper. A person trying to imitate or forge an e-signature would not be able to generate the same dynamics as the original signer.
Role of e-signature in Global Business Environment
Moreover, the global Government Laws and International Treaties have an important role to play in the promotion of e-signatures in order to create and exercise digital contracts with a quick turnaround time. The use of e-signatures has the power to grease the entire business process management as well as case management solution, to deliver a higher level of customer satisfaction.
The world is rapidly transforming to a dynamic state and businesses are carried out at an International level. A global unanimity about allotting legal status to e-signatures across the globe will help online businesses scale to a higher level. The widespread adaptability of e-signatures will also catalyze the growth of a pure digital workflow environment, including e-commerce and m-commerce.
Driving Force Behind the Legal Acceptance of e-signatures
It becomes the responsibility of e-signature companies to innovate e-signature technologies which can comply with the e-signature regulations as laid down in the legislation passed by different countries.
E-signature technology must be able to track all the important attributes related to e-signature and record it to create a unique entity in the form of e-signatures, not prone to any kind of duplication and even if some fraudulent practices are deployed then it must be nailed down effectively . In cases where an effort to forge an e-signature is attempted, the e-signature validation and fraud detection technologies must be well powered to detect the attempt of signature forgery.
The better the companies are equipped to provide secure e-signature technologies, the quicker and stronger will be the adoption e-signatures by legal and government entities across the world.