Are e-signatures legal in Australia?

Next month at a European Union forum, the EU will sign to accept electronic signatures. This will standardise the process across the EU called Electronic Identification and Trust Services (eIDAS) across the EU.

It is already approved by the EU Parliament and this move will replace any national laws on electronic signatures which are currently in place in some of the EU countries. The aim of this initiative is to help individuals, consumers and entrepreneurs develop their online activities.

So where are we at in Australia?

Currently, Australia ‘acknowledges’ electronic signatures and digital signatures both on a federal as well as state level. However, there is not direct law to actually ‘accept’ e-signatures but rather the law says the document is ‘not invalidated’ just because it is authenticated by an electronic means. This means, by default, e-signatures are recognised as evidence, provided you can show the below requirements.

What’s the difference between an electronic and digital signature?

An electronic signature can be a sound, a symbol or process attached to a document as a means and with the intent of the person to sign the document. It’s often in the form of a digitized image of a handwritten signature. It’s not viewed as secure as digital or physical signatures due to the ability of an individual to type or copy the image of another person’s signature and use it to sign. It is also seen as a less ideal method for signing documents as it’s more difficult to prove the intent of the person to sign.

Digital signatures, on the other hand, are seen as a more advanced method of signing and have a higher level of integrity. They are seen essentially as an electronic ‘fingerprint’, which is a coded message that is unique to the document and the signer. Digital signatures ensure the authenticity of the signer. They are more universally accepted and a signer cannot later deny they signed after their digital signature is affixed.

Also, if the document is changed or altered in any way after the ‘signature’ is affixed, this invalidates the signature. This means and ensures a digital signature has a higher level of authenticity, accountability and data integrity.

Can I rely on electronic signatures in my business?

Many businesses are using electronic signatures these days. If you are using electronic signatures, you need to have a reliable method to prove the intent of the signatory and that they did, in fact, mean to ‘sign’ the document.

Requirements for e-signatures

If you are going to rely on electronic signatures, make sure you can do the following:

1. show you can identify the person signing and be able to indicate that they knew and agreed to the document or the information they were signing; and
2. be able to show that the method used to attach/affix signature was reliable. In other words, you need to be able to establish the method of electronic signature was reliable, kept secure and was appropriate to be used for that type of document.

Digital signatures are a higher level of authenticity, so if you use electronic signatures as a regular means of signing in your business, you should consider putting in place digital signature processes for more important documents.

Final important consideration: Australia recognises both forms of signing, but any digital signature will have a greater level of evidential strength in any litigation or legal situation over an electronic signature.