Digital contract execution is a requirement for the workflow of legal practices, says Tara Vasdani
As the global pandemic continues to loom over business and our economy, the legal industry is transitioning to remote work longer-term. As a veteran of and advocate for remote working arrangements, the adoption of technology to enable lawyers to “go remote” while preserving client confidentiality and privacy has been particularly appealing.
Privacy concerns have impended the COVID-19 pandemic, as many workers have been placed into remote work situations using their personal computers, unfamiliar platforms and new technologies without the appropriate training, safeguards or vetting.
Along with tools such as uLawPractice for cloud-based document management, MinuteBox for corporate transactions, Diligen for contract automation, Evichat for e-discovery, and Alexsei for legal research, a digital signing platform that generates real-time execution and audit trails every second of every interaction using a user’s IP address and location can alleviate much of the fear and uncertainty associated with a remote practice, and preserve client confidentiality and satisfaction.
With most Canadians now working remotely, obtaining original signatures for documents and commercial agreements has become increasingly difficult. The pandemic has also created challenges for commissioning and notarizing documents, which are typically required to be done in person. A wet-ink digital signature indicates acceptance of an agreement and the authentication of a document, and allows for agility, reliability, efficiency, and security.
Yet digital signatures -- now necessary for executing wills, powers of attorney, contracts, mergers and acquisitions, and just about any other formal document -- are still far behind in being recognized as authentic. An avant garde technology that would allow us to take digital signatures into the future has the potential to reduce COVID-19-related disputes over contracts and the validity of documents in an already overburdened court system.
Recently I had the opportunity to pilot a wet-ink digital signature platform called Syngrafii, which allows for real-time communication between signatories and witnesses using visual and oral platforms in a system which video-records the entire interaction from start to finish. Each party to the transaction is invited to the video-signing “room,” where parties present documents and signatories sign or execute a document using a link sent to their cell phone, in “wet-ink,” for all participants to see. The wet-ink signature is created by the signatory using his or her finger, and allows for a unique original signature to be placed immediately into the document, and witnessed by all.
Throughout the demo my signature uploaded onto the platform, and all parties were able to confirm that, while being recorded, the signature was authentic and valid. Documents may be administered under oath by a notary or a commissioner of oaths, and the documents are then embedded into the video-recording and saved by the host into a computer system, effectively preventing penetration, modification and/or tampering by the parties. Finally, the documents are time-stamped for auditability and distributed to all participants for safekeeping.
As the legal sector continues to operate remotely, the tools necessary for seamless legal practice must be placed at the forefront. The benefits of sophisticated digital signatures are obvious: access to justice is increased on a grand scale; efficiency and cost-reduction are paramount; distance commerce is possible; and remote examinations can easily be conducted.
In November 2019, the Law Society of Alberta teamed up with TreeFort Technologies to provide members with a remote identification and verification platform.
Globally, due to COVID-19, all industries are compelled to rethink their way of work, and sophisticated digital signatures could be an opportunity for all to collaborate and improve processes.
So what are the pitfalls?
Although the use of digital signatures provides efficiency and reliability in litigation, it also raises concern when a signature is made in a jurisdiction other than that in which the contract and/or document is to be binding. In 2018, I addressed the contract law disputes that arise when a digital nomad – i.e., a worker outside the jurisdiction of their employer – executes a contract with an end-user, who is also outside of the employer’s jurisdiction.
In my opinion, the jurisdictional disputes can simply be resolved by paying attention to governing law clauses. Digital signature platforms and their use of IP addresses to determine the location(s) of attending parties also assists with ratifying where the signature took place; however, it is prudent for the parties involved to discuss which law will govern the contract in the event of a dispute.
Scott Nettie, general counsel to Syngrafii, was a registrar in the Bankruptcy Court in Toronto for a number of years. As we discussed consumer insolvencies, it was clear that had Syngrafii existed in his time, many bankrupts who are often left bewildered as to their bankruptcy developments, or who their even trustees are, would have been better able to manage their bankruptcies and discharges.
The tools that allow lawyers to work remotely, on a large-scale and permanent basis, are here. The question is, is the legal sector ready to adopt them?