What was once an enterprise luxury in the United States, electronic signature, is today nearly ubiquitous, as a basic business need. This rise in e-signature can be attributed, in part, to the passage of the E-SIGN act but also to the rising numbers of mobile workers; nearly 30 percent of employees are “anytime, anywhere” workers, according to Forrester Research. This spike in the mobile workforce puts pressure on businesses to provide options for executing agreements and sales while on the go.
In addition to the mobility factor, electronic signature has also seen greater adoption in the U.S. and other common-law countries thanks to the broad definitions outlining electronic signature in the ESIGN act. The act provides a vendor-neutral framework for electronic signing stating that “a contract or signature may not be denied legal effect, validity or enforceability solely because it is in electronic form.” It’s this definition in the legislation that makes electronic documents and records just as viable as their paper equivalents in the United States, allowing U.S. companies and individuals to speed up their business processes and save tremendous amounts of time, money and paper.
Common-law interpretations in the U.S., based on previous legislation enacted and case histories, allows for the ESIGN act to be interpreted and enacted liberally here. This relative legislative ease allows businesses and singers in the U.S. and other common-law countries (in Canada, the UK and Australia, for example) to adopt electronic signature more readily. This is, in part, why in the last three years, U.S. electronic transactions have grown by 53 percent and is slated to top 700 million in 2017.
We’re E-Sign Friendly: Canada, Australia and the UK
Similar to the U.S., Canada, Australia and the United Kingdom have adopted broadly defined, technology-neutral electronic signatures laws. In 1999, Canadian lawmakers passed the Uniform Electronic Commerce Act which states that electronic documents can’t be denied legal effect simply because they are electronic. The Canadian e-sign laws are strikingly similar to those in the U.S., making it simple, convenient and effective for the two countries to do business virtually.
Similarly, Australia’s legislators passed the Electronic Transactions Act, also in 1999, to enable electronic signing and documentation. In the United Kingdom, the Electronic Communications Act came into force one year later, in 2000, allowing contracts to be executed electronically. All three of these frameworks offer broad interpretations of electronic signature, enabling businesses in these countries to go paperless with greater confidence.
Facing E-Signing Obstacles: The European Union
According to a 2015 report released by Forrester Research, Europe still lags behind the United States in e-signature adoption. Analysts attribute this lag to inconsistent regulations in the primary economies, plus cultural headwinds; although, the recent EU regulation (eIDAS) promises to solidify and promote e-signature adoption across Europe.
While electronic signatures save both European businesses and consumer’s significant amounts of time and money, the diverse legal and institutional frameworks of the EU member states have limited e-signature adoption in the region. In an effort to curb issues and facilitate commerce, the European Union adopted the European Directive 1999/93/EC in 1999 establishing a framework for the use of electronic signatures – thirty European countries implemented the Directive. However, the regulations around the Directive were murky, and the disparate laws among member states kept it from truly moving the needle for electronic signature adoption.
In a more recent attempt to make things easier, however, the EU has begun to roll out eIDAS regulations to replace the Directive. The regulations under eIDAS are more clearly defined. Under these new rules, member states must agree to recognize means of electronic identification of persons falling under another member state’s electronic identification scheme – this recognition, as its intended, should make cross-border electronic signing within the EU valid and effective – great news for EU-based businesses, but unfortunately irrelevant to U.S. – EU transactions. In spite of the ongoing challenges for e-sign adoption in Europe, analysts predict, including those at Forrester Research, that Europe will follow the United States in adopting electronic signatures in 2016 and beyond.
Get Active with E-Sign Initiatives
It’s the hope of businesses involved in the Electronic Signature and Records Association, like AssureSign, that regulators across the globe will continue working to make electronic signature an option – its just one more way we can enable global commerce and make doing business more expedient than ever before.
Follow what’s happening with electronic signature laws and get involved at ESignRecords.org.