Net leaves the law behind

House buying still has to be done the old-fashioned way

By BBC News Online internet reporter
Mark Ward

Antiquated British laws are threatening to hold back the racing pace of electronic commerce.

Although digital signatures are now a legal means of signing a contract, many British laws have yet to be changed to reflect this development.

Some laws state that a contract is binding only if it is on paper and signed with ink.

Business groups are now drawing up a list of the offending laws, and are calling for new legislation to bring them up to date.

Sign online

In July, the Electronic Communications Act received Royal Assent and gave digital signatures the same legal standing as those written with a pen.

There are 40 to 50 Acts that need to be changed so the traditional written signature can be done electronically

Will Roebuck,
E-Centre UK

Despite the name, a digital signature doesn't resemble anything you write. Instead, it is an electronic system for checking identities and time-stamping any agreements made or signed online.

But the change in the law does not mean that digital signatures can be used to buy, sell and sign online.

Some British laws demand the physical signing of a document or exchanging of papers.

The Electronic Communications Act suggests that it is possible to sign and exchange the contract to buy a house over the internet. However, under current property laws, the sale would be illegal.

House hunting

"Electronic conveyancing requires primary legislation because there are some property sales that have to be done by deeds," said a spokeswoman for the Land Registry.

"Some of the laws are quite prescriptive and paper-based."

Now the industry group, Alliance for Electronic Business (AEB), is pushing the Government to update other laws that the internet is rendering outdated.

"The Electronic Communications Act has completely overturned the traditional legal structures," said Will Roebuck, legal advisor to AEB member E-Centre UK.

"There are 40 to 50 Acts that need to be changed so the traditional written signature can be done electronically."

House-buying laws, legislation covering employment contracts and consumer-credit laws all need to be changed to cope with the internet age, said Mr Roebuck.

Government departments are already examining which Acts need changing and are expected to report on their findings later this year.