Qualified Electronic Signature for HM Land Registry: Hugh James & the first property deal completed with a QES
QES - Qualified Signatures for HM Land Registry: Hugh James & the first property deal completed with a Digital Qualified Electronic Signature.
Qualified Electronic Signatures (QES) offers the highest level of trust of all electronic signatures. While electronic signatures are broadly accepted around the world as equivalent to a written "wet” signature, some heavily regulated industries (such as conveyancing) require or prefer digital signatures, which offer a heightened level of identity assurance compared to electronic signatures.
In 2020, HM Land Registry began accepting registration of a transfer deed or other form of dispositionary deed that is electronically signed. In the last two years, electronic signatures have become more widely accepted. There are many types of digital signature available including Qualified Electronic Signatures. Here’s more on the different types of digital signature. A recent Electronic Execution documents industry working group report concluded that Qualified Electronic Signatures, particularly if underpinned by a regulated digital identities trust framework, are capable of fulfilling the same objectives as physical witnessing and attestation.
Qualified Electronic Signatures offer many benefits for the conveyancing and property sector, which is moving away from traditional, paper-based processes. Industry leaders have an opportunity to push the sector in a direction towards digital transformation, and recently law firm Hugh James took part in a pilot to complete the first properly deal with a Digital Qualified Electronic Signature for HM Land Registry. The use of a QES is the first major step towards an enormous shift across the UK, particularly as wet ink signatures have become a bottleneck for a booming property sector with a record number of transactions. DocuSign supports both Witnessed Electronic Signatures and Qualified Electronic Signatures for Conveyancing. In February 2022, a group of experts chaired by a High Court judge and a law commissioner has concluded that Qualified Electronic Signatures is at least as secure as physically witnessed signatures.
Hugh James Qualified Electronic Signature Pilot with HMLR
When HMLR announced they were considering electronic signatures for property conveyancing with a pilot programme, Hugh James, a top 100 UK law firm across London, Cardiff, Southampton and Plymouth, took its first major step and joined the the programme, completing the first-ever UK property deal utilising the DocuSign Qualified Electronic Signature (QES) solution. In the UK and Europe, a Qualified Electronic Signature is deemed legally identical to a wet signature. The digital signature securely associates a signer with a document in a recorded transaction, using a standard accepted format called Public Key Infrastructure (PKI) to provide the highest levels of security and universal acceptance. In this article, we’re sharing our interview with Nicola Evered, Specialist Digital Transformation Manager at Hugh James, to discuss signing the first QES documents under the HMLR pilot with DocuSign.
Can you tell us more about the first time you used QES and why?
Hugh James are keen to be at the forefront of digital changes in the property world, and the QES pilot really allowed us to demonstrate that. We’re passionate about innovation, customer choice and removing blockers from processes. We constantly look at the processes we can transform digitally because it's good for customers, as well as internal teams. We try to make sure that we’re doing the right things for the right reason, and the HMLR pilot provides an opportunity to look at current processes and innovate. Buying a property can be one of the most substantial financial decisions a person can make, and signatures are still an important aspect of the contractual and transactional processes - most agreements need a signature to be legally binding. QES offers the highest level of trust through a face-to-face ID verification process by a QES provider, which may be from either the UK or EU, with the resulting digital certificate created with an electronic signature device. Other available options include Witnessed Electronic Signatures. At Hugh James, we thrive on positive change, and Peter Hurn, a Partner and Head of Property at Hugh James, was prepared to support our decision to use QES. It was the right choice for the firm, for customers and digital transformation. The DocuSign pilot provides buyers with quick and easy access to their documents, ready to access and sign through a link when they are ready.
We think that QES should be available to our customers for increased speed. We think QES helps minimise risk and speed up the process, and we’re very transparent about wanting to provide benefits to our clients. One of our clients could see the advantage of being involved, and we were in the right place at the right time to do the first pilot.
Property transactions don’t happen overnight and are quite complex. We can create files, create a signing process, and perform legal checks on a transaction. Where there is risk involved in the signature process, we can now deal with this quickly. We can set up agreements- we can go online and get that part done with speed. We don’t need to involve paper in the transaction process, so that’s good for the environment, and we don’t have to post documents and experience postage delays.
These benefits speed up the whole process of the transaction. Pilots are always difficult as they will never be perfect, but you need to start to make a change and learn. Of course, as with any innovative technology, there are learning curves. Yet, for Hugh James, the pilot project was a significant step forward.
A key benefit is that when people sign using QES, we know HM Land Registry will accept the signatures. Previously, HMLR may have had to raise a query on the execution of either the buyer's or seller's signatures or the witnesses. So QES gives the Land Registry a higher level of reassurance on the authenticity of signatures at this point. The sort of queries HMLR might have on wet signatures include if, for instance, you haven’t got a full address for a witness or something similar. It can be a tiny thing but can add risk to a property transaction. Those types of errors can increase costs for a firm and increase the workload for the solicitors involved in the transaction. Having this registration being secured is like a golden ticket.
What’s the biggest advantage of QES?
For me, it’s the convenience of completing signatures whenever and wherever the client wants to. Signers can be in multiple locations and be comfortable doing the right thing. Flexibility is crucial and a huge advantage. The fact that a witness is not required is also a huge benefit, as it’s more convenient. QES also ensures we are not reliant on postal services, and we are guaranteed that the execution is acceptable to HMLR.
What are the benefits of QES compared to witnessed electronic signatures?
Aside from the fact that you don’t need to have a witness, the additional benefit is that the transaction remains completely private - the reality is people might want to keep a transaction confidential. There are currently precise criteria around who can be a witness, and you need to find an independent person, which can sometimes be tricky.
Many factors can affect a property timeline that relies on third parties such as local authorities and other solicitors, but using QES does provide speed over a wet-signature document. When using DocuSign eSignature with QES, the actual signing of the contract could happen on the same day. The process of manually posting paper documents to get wet signatures one after the other is not required. It also has speed benefits over witnessed electronic signatures, which requires having a witness on standby. QES allows parties to sign at their convenience.
Are you planning to use QES within your organisation after the pilot?
Yes. We want to offer it to clients so they can complete transactions in ways that best suit them, and we can see the benefits that this brings. Discover more about Hugh James use of QES with DocuSign.
How do you see the future of QES with HMLR?
I’m hoping it will be an option for all conveyancing transactions. We’re hoping it will become an option for charges and digital mortgages. If you remortgage with the same lender, the requirements you have to execute are different than if you remortgage with a different lender. With the same lender, you have already secured registration. You have to remove the historical mortgagee with a new lender and put a new one on. Land Registry compliance has to be on the new deed.
For Hugh James, Qualified Electronic Signatures are an unqualified success. The company will continue to use them and support their adoption in the hope that they will be an option for all conveyancing processes in future. Discover more about the benefits of qualified electronic signatures with HMLR.