Covid-19: Execution of documents by trustees


In the first two posts of this series, we looked at the practical considerations for trustees during this global health crisis, and how trustees may make decisions during this time.  In this third and final piece, we look at how trustees may sign and execute documents, which put into place the decisions they have made.

With the growth of electronic and homeworking, both before and during the Covid-19 pandemic, questions have been increasingly asked of lawyers whether electronic signatures are valid when signing documents.

Generally, electronic signatures are valid under English law.  The Law Commission published a report in 2019 called "Electronic execution of documents", in which it confirmed that an electronic signature is capable of being used to execute a document, including a deed, provided there is an intention to authenticate and any execution formalities are satisfied.  This is in line with the position in common law.  For example, a named typed at the bottom of a document, and clicking the "I accept" box on a website, have both been recognised as valid signatures. 

This means that trustees will be able to enter into documents such as contracts without any requirements for putting pen to paper.  It is very likely that many trustees will have done so regardless. 

However, a crucial point in the Law Commission's report is that where there is a requirement for a deed to be signed "in the presence of a witness", the witness must be physically present.  This means that the signing of deeds by trustees, (for example used when appointing property to beneficiaries or otherwise dealing with trust assets), cannot be carried out electronically.  Some electronic signature platforms do offer functionality for document witnessing.  However, it is clear from the use of the words "in the presence of a witness" that this requires the document to be witnessed by an individual who is physically present at the time of signing by the signatory. 

When considering what is meant by signing "in the presence of a witness", a review of the case law shows that the witness does not need to see the signature itself; they merely need to see the pen move across the paper. It may therefore be possible for trustees executing documents to have them validly witnessed and to still comply with social distancing requirements. 

If signatories to documents are in different parts of the world, deeds can be executed in counterpart, with the effective date confirmed once all parties have signed.  In this way, each party can sign their own copy of the deed and prove the same to their advisors, who can then confirm the date to be entered onto each copy.

When considering execution formalities, it is also important for parties to be mindful of the jurisdiction of their trust and the relevant document.  For example, Jersey has recently passed into law a series of regulations which allows documents to be signed and witnessed by audio visual link, so long as the witnessing is recorded and then filed with the appropriate authority. 

Each trust and its trustees will have their requirements and considerations. If you would like further information on any of the elements raised in this series, please get in touch with us using the contact information on this page.

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