Written by: Stephen Mason

CHEQUE TIME IS UP

The rise of the electronic signature

Stephen Mason, in the second edition of his work 'Electronic Signatures in Law', sums up the balance between his work and the long established and companion of renowned, 'Byles on Bills of Exchange and Cheques' (twenty-eighth edition), when he writes that a colleague once referred to electronic signatures as the 'burning branch of obscurity'

Mason's friend was "indicating, indirectly, that although electronic signatures in their many forms are used daily by millions of people millions of times", the understanding surrounding the topic (like bills of exchange) was negligible! This work by Mason is a particular relevance to those who study the formation of contracts in an electronic age where the old rules tend to be changing by reason of modern necessity.

Mason succeeds here with his aim to bring the topic of electronic signatures into focus with students, lawyers and non lawyers in an age where the common law notion that it 'never had much truck with technological objections' could not be more unfortunate as the global market place dominates.

Mason's book, itself, is an excellent exposition of practices across the world with 16 detailed chapters, five appendices and a glossary.

He provides an in-depth analysis of:

• what constitutes an electronic signature;
• the form an electronic signature can take;
• issues relating to evidence, formation of contract and negligence; and
• guest authors writing chapters to cover Canada, Germany and the USA.

THE INTERNATIONAL PERSPECTIVE

As the global economy takes full control this century, 'Mason on Electronic Signatures' reviews these 'electronic signature acts' throughout the world and investigates how they have been amended by examining a number of important cases which have been reported in the following jurisdictions which may be of interest to your firm: Argentina, Australia, Brazil, Canada, China, Colombia, Czech Republic, Denmark, Dominican Republic, England & Wales, Estonia, Finland, France, Germany, Greece, Hungary, Israel, Italy, Lithuania, Netherlands, Papua New Guinea, Poland, Portugal, Singapore, South Africa, Spain, Switzerland and the United States of America.

This second edition is very timely giving a practical and whilst comprehensive guide to the understanding of what an electronic signature is. The book starts with a clear overview of the concept and history of all forms of signature and provides a fantastic insight into the way the world now views this method of asset exchange since Victorian times and is very much a book for the twenty-first century.

Phillip Taylor MBE Barrister-at-Law
Abbey & Richmond Chambers

Malet Street Gazette

Stephen Mason’s second edition of Electronic Signatures in Law is a very valuable addition to the body of work on this subject. Whether or not intended to be read from end to end or dipped into for particular issues, this book has something for most readers interested in this subject, covering issues relevant to the commercial lawyer, the technologist, the litigator and the international organisation (with a need to understand and perhaps implement a PKI solution across a number of jurisdictions)—indeed the style and structure of the book shows that it is clearly intended for different audiences. As the author jokes in his preface, this subject has been referred to as the “burning branch of obscurity” and yet “electronic signatures in their many forms are used daily by millions of people millions of times”. Anything so commonly used is going to raise a huge number of legal issues for those providing the services and the book addresses this.

This book is comprehensive in its treatment of the case law relating to the subject, as perhaps one might expect from an author who is both a barrister and research fellow. From the outset “Electronic Signatures in Law” is clear as to its aims: namely that it is not intending to reproduce Lorna Brazell’s exhaustive country-by-country analysis; instead it uses a small but key number of jurisdictions (mainly England and Wales, Northern Ireland and Scotland, Canada, Germany and the United States) to offer a critical and comparative approach to the ways in which differing legislatures have tackled the legal and technical problems. That said, the table of international legislation makes a terribly useful checklist of applicable laws in over 90 countries.

For those with an interest in the subject (or with clients seeking advice regarding electronic payment systems) but without a grounding in the technology or legal questions, the starting point should be Ch. 10, “The form of an electronic signature”. This chapter addresses one of the key causes of confusion in this debate, the seemingly interchangeable use of the terms “digital signature” and “electronic signature”. The author clears this up by stating that “electronic signature” means the generic concept of a signature, and includes a digital signature as one form of electronic signature. However, that view is not universally shared (as the author details) and cases from varying jurisdictions have helped to confuse the issue.

Chapter 10 should be followed by Ch.12, “Contractual liability”, for a useful back-to-basics reminder of how this new technology fits with traditional contract law principles (noting that it is not intending to cover the normal laws of contract which apply to the formation of contracts with certification authorities, but instead is intending to explore the issues that affect the parties to a digital signature). This chapter contains consideration of third-party rights and distance-selling principles as they apply to electronic signatures which are now fundamental to contract law in this area, together with the interplay between UCTA and the Unfair Terms in Consumer Contracts Regulations in relation to online contracting. IT lawyers will recognise the “Is software goods or a service?” debate referred to in this chapter and the discussion of St Albans v KL and Beta Computers.

Logically Ch.15, “Digital signatures”, should follow Ch.12. It sets out the technical detail of how the various technologies work, including the core elements of PKI, certification, the background principles of security and developments such as PGP.

Standing back from how the book might otherwise be ordered, “Electronic Signatures in Law” begins with an outline of the significance of signatures themselves. It explains the need for legal and technical certainty when a message is passed, contract formed (etc) electronically: namely that the message has not changed since the signature was made. This chapter illuminates the essential concepts of “signature”, “document”, the meaning of “writing” and so forth.

From this, the author moves on to an in-depth look at the history and development of relevant case law. This chapter is particularly interesting for those conducting research as it contains a fascinating look at the development of the concept of validly applying one’s mark to a document so as to give it legitimacy and to show that it carries one’s intent. This provides context to the underlying spectre of fraud, as present in the 11th century as it is today. From merely making a mark, to the issues of conflict arising where a hand has been guided to make a mark, through unsigned documents and to mistakes or variations of a name, this chapter is particularly comprehensive and interesting.

Chapters 3 to 8 describe different international approaches and the similarities and differences are reviewed in Ch.9. Anyone considering cryptography issues, applications such as smartcards and e-payments and PKI needs to be familiar with the UNCITRAL Model Laws, and the UNCITRAL rules regarding electronic commerce and electronic signatures are both covered in depth. Domestic technology lawyers should be familiar with the relevant EU Directives set out in Ch.4 (and the legislation set out in Ch.6, particularly the Electronic Communications Act 2000). The author makes interesting observations towards the end of Ch.4 regarding the take-up of advanced electronic signatures. Specifically, he refers to the 2006 press release issued by the Information Society and Media Commissioner which noted the general reluctance to obtain advanced electronic signatures, thereby slowing down the growth in goods and services. Mr Mason points out that no evidence was offered to substantiate this assertion and others in the industry would probably agree.

The final chapters deal with rules of evidence and data protection issues as they apply to electronic signatures.

Perhaps the third edition will talk more about the United States, such as the furore around the “clipper chip” idea for state controlled key escrow in the mid-1990’s. Equally, the reviewer thinks that the reader could withstand an even more technical glossary and further detail as to the way in which the various international standards listed apply in practice.

Mark O’Connor

Partner & Location Head, Technology, Media and Commercial

DLA Piper UK LLP

CTLR 2008