As a result of social distancing measures necessary to fight the spread of COVID-19, individuals and companies are becoming increasingly reliant upon technology to carry out the day-to-day aspects of business.
The inability to attend in person to sign documents raises questions about when electronic signatures are effective to create valid and binding legal documents. In this article, we review the relevant provisions of British Columbia’s Electronic Transactions Act (the “ETA”), the provincial law that governs the use and enforceability of electronic signatures. We also canvass recent COVID-19 related developments that provide additional guidance regarding the use of electronic signatures during the COVID-19 pandemic.
The ETA defines an “electronic signature” as information in electronic form that a person has created or adopted in order to sign a record and that is in, attached to or associated with the record. This definition is quite broad. Case law, such as Johal v. Nordio, 2017 BCSC 1129, indicates that an electronic signature can include, for example, something as seemingly informal as attaching a name and contact information to an email.
Section 11 of the ETA provides generally that a requirement by law for the signature of a person is satisfied by an electronic signature. The ETA explicitly sets out at section 2(2) that the use of the words “in writing”, “signature” or other similar words do not by themselves prohibit the use of electronic signatures. However, those who intend to use electronic signatures should be aware that there are several exceptions to this general rule.
The ETA operates within the context of other laws and regulations. Pursuant to section 2(1), the ETA does not limit the operation of a law that expressly prohibits or regulates the use of information or records in electronic form. The ETA also does not limit the operation of a law that requires electronic signatures in certain contexts to conform to particular criteria in order to be valid.
Section 2(4) of the ETA sets out exceptions to the general rule that an electronic signature satisfies the requirement at law for the signature of an individual. Original signatures are required for the following:
- trusts created by wills;
- powers of attorney, to the extent that they concern the financial affairs or personal care of an individual;
- documents that create or transfer interests in land and that require registration to be enforced against third parties;
- other provisions, requirements, information or records prescribed in the regulations; and
- negotiable instruments, such as cheques, bills of exchange and promissory notes.
Thus far, neither the legislature nor the Law Society of British Columbia has made any indication that the requirement for original signatures on estate planning documents, such as wills, trusts created by wills, or powers of attorney, will be relaxed due to the COVID-19 crisis. In British Columbia, such estate planning documents continue to require original signatures – witnessed in person where applicable – in order to be valid. Similarly, there has been no indication that the requirement for original signatures on negotiable instruments has changed due to COVID-19.
Documents creating or transferring an interest in land must contain original signatures. While affidavits used in land title applications continue to require original signatures, the Land Title and Survey Authority has made provision for such affidavits to be witnessed virtually. For more information, see EKB’s article COVID-19 Update: The BC LTSA Enables Remote Witnessing of Affidavits for Use in Land Title Applications.
As of March 28, 2020, the Canada Revenue Agency will recognize electronic signatures as having met the signature requirements of the Income Tax Act for forms T183 and T183CORP, which provide authorization from taxpayers for a third party to prepare their taxes. This is a temporary measure to reduce the need for taxpayers and tax preparers to meet in person.
The legal landscape is changing rapidly as government and administrative bodies work to assist businesses and individuals to conduct their business remotely. EKB continues to monitor the situation and will provide updates as they become available.
Read more EKB Updates about the legal implications of COVID-19 and the impact on B.C. business.