Call to stop signing on the dotted line
Lockdown could be the time to move to e-signatures
‘Iexecuted a will when I had a pulmonary embolism with two nurses — I think they were nurses — on the end of my hospital bed in Auckland Hospital,” says rich lister Andrew Barnes.
“And I literally dragged two people in off the street.
“Now, they didn’t know me from Adam, yet that is a binding will.
“Two people who didn’t know me, witnessed me sign a document that we currently say is effective for the execution of a will. And I think that’s ridiculous.”
The Perpetual Guardian founder says the Covid-19 lockdown is a chance to make the law around wills less ridiculous, with new rules for electronic signatures.
With the outbreak, “we’re seeing a massive increase in the number of people wanting to get their affairs in order, just in case,” he says.
But with the lockdown, there are obvious practical difficulties in getting a physically signed copy to a lawyer, and organising the required witnesses — each of whom also has to offer a physical signature.
“If you’re in self-isolation, the law as it currently stands doesn’t enable you to execute a valid will,” says Barnes.
The four-day-week champion sees two possible solutions.
One is to extend so-called “battlefield wills” — informal, often oral wills that hold if you die within 12 months of making one.
The other is to change the law to allow a will to be signed by electronic signature.
Barnes has skin in this game. His many ventures include two digital will companies — Footprint here and Arken in the UK.
But Lowndes Jordan’s Rick Shera also hopes the lockdown will prove a chance for e-signatures to take off, and for us to suffer fewer of the “Please print this document, sign it then send it back” requests.
“Absolutely, secure electronic signature should take off in this environment,” he says.
“It is legally valid for almost all situations — wills being the main exception — and, depending on the type of platform, more secure than sending documents by email with better logging, verification and audit trails.”
Electronic signatures have been legal for a couple of decades. The Electronic Transactions Act 2002 gave them the same weight as written signatures, except for wills or handing over power of attorney.
And there’s plenty of e-signature technology out there, from the likes of Adobe’s DocuSign to the homegrown Secured Signing — the NZ company that’s the platform of choice at Shera’s company, and for the Auckland District Law Society.
Methods vary from writing with your finger on a touchscreen, to selecting a scanned image of your written signature.
But many transactions are still stuck in analogue.
Justice Minister Andrew Little indicated he was open to extending e-signatures.
“I am currently awaiting advice on options that enable wills and enduring powers of attorney to be witnessed in a way that complies with Covid-19 public health requirements,” Little told the Herald.
But, he said, “it is important we protect the vulnerable in two respects — their health and that their wishes for their affairs are truly their own.”
And in the meantime, he said, there was already provision for Barnes’ “battlefield will” scenario.
“As it currently stands, the Wills Act 2007 requires a will-maker to sign a will in front of two witnesses, who are present with that will-maker at the same time. It is not possible or desirable to meet these requirements while Covid-19 alert level 4 is in place,” Little said.
“However, an amendment to the Act allows the High Court to make an order declaring a will to be valid even if it doesn’t comply with the formal requirements if it is satisfied that the document expresses the deceased person’s testamentary intentions.”
Beyond the controversy over wills, LawHawk managing director Gene Turner said the use of electronic signatures is very uncommon in New Zealand overall.
“The banks haven’t all got themselves comfortable that digital signatures are fine, and if the banks won’t accept them, lawyers won’t either,” the former Buddle Findlay partner said.
Turner said more businesses should accept electronic signatures as, even in good times, putting ink to paper involved costs and delays.
Given that the banks are expected to give mortgage relief and help businesses through loan extensions and facilities during these times, there will be many new contracts or contract variations.
Several of the major banks have confirmed to BusinessDesk that they are already reviewing their policies on how to facilitate electronic signing.
“ANZ is looking at a policy across all markets in which it has a presence on e-execution, along with interim measures to manage document authorisation while Covid-19 restrictions are in place,” said spokesman Steffan Herrick.
“In New Zealand, a number of ANZ business units already accept scanned copies of signed documents on a case-by-case basis.”
ASB said it accepted electronic signing of loan documents using DocuSign, to a certain value, and was looking at extending its use of the software.
“Some ASB loan and security documentation is required to be signed as a deed, and these often need to be signed in front of a witness,” a spokesperson added.
Kiwibank said the issue was one of many scenarios it was working through. “In unprecedented times we’ll look at individual cases and, if need be, make exceptions on a set of risk-based criteria.”
Former Auckland District Law Society president Joanna Pidgeon is advising lawyers to use online software “sooner rather than later so you know how to use it”.
Pidgeon said property lawyers were familiar with using digital signing as many of them used the organisation’s web forms program, which included contracts.
The chair of the NZ Law Society’s property committee, Duncan Terris, said banks usually allowed people to sign with ink and scan their loan documents if those customers had existing security in place.
He said for more complex transactions, such as new guarantees or new securities, the lockdown might make things difficult.
“We are generally obligated to see clients face to face. Having said that, there are options for signing documents and video witnessing is an acceptable alternative.”
If you’re in self-isolation, the law as it currently stands doesn’t enable you to execute a valid will. Andrew Barnes