ANNIVERSARY OF THE FIRST UNCITRAL MODEL LAW
Today, June 12, 2016, marks the 20th anniversary of the introduction of the first major international protocol on the use of electronic signatures in business transactions, namely the UNCITRAL Model Law on Electronic Commerce (1996). Since then, the Model Law was updated in its 2001 version, and the EU has also published rules for application by member countries.
In Australia, where I live and work, the federal government implemented the 1996 UNCITRAL Model Law by enacting the Electronic Transaction Act 1999 (Cth).
According to Wikipedia, apart from the EU, the UNCITRAL Model Law, in its original and updated versions, has been implemented by around 30 countries.
“ELECTRONIC” VERSUS “DIGITAL” SIGNATURES
So, what is an “electronic signature”, and what’s the difference between that and a “digital signature”?
Let’s start with basics. A signature, as we all know, is a way for a person to authenticate a document. By signing a paper with a pen, or sealing it with wax and making an impression in the soft wax with a stamp or embossed ring (an older method used in Europe), or stamping it with a unique name stamp or haibao (an older method used in China), and many other ways in different parts of the world, people have reduced uncertainty that a document was approved by them by applying something that is intended to be a unique identifier.
Of course, someone can steal your seal, or forge your signature, and the legal systems of different countries have developed solutions for these problems. But the basic purpose of a signature has always been the same: to identify the person who applied it, and indicate their agreement or acceptance to the terms of the document signed.
Now, once we started using technology to communicate, which goes back to the telegraph, people started indicating their authorship of messages in a non-physical way. Instead of a wax or ink seal or an ink signature, the authenticating “signature” became a series of electronic signals that could be translated into a physical form: a telegraph signal in Morse code that was written out in readable language, or – now – packets of bytes that transform into an email and can be printed.
An “electronic” signature is therefore a signature communicated by electronic means. That could be a scan of a signed paper document that its emailed. It could even be typing your name “JOE BLOGGS” at the end of an email and sending the email to another person. There have been court cases which have considered whether just the email address on an incoming email counts as a signature.
The law courts in English-speaking countries have taken a pragmatic approach and have decided that the methodology that is used to communicate a “signature” isn’t particularly important. What is important with an electronic signature, just as it has always been important, is the receiver’s capacity to verify the signature’s authenticity.
DIGITAL CERTAINTY
In contrast with this the wide range of things that can be classed as an “electronic signature”, a “digital signature” is a unique digital identifier, kind of like a cookie that belongs to you and not to anyone else in the world, which you can embed into your emails and other forms of electronic messages. This is how encryption works: the sender has a unique “key” which he or she shares with the receiver. The receiver knows that the message is authentic by identifying the key.
The great thing about “digital” signatures is that they can be absolutely unique and therefore are extremely secure. A digitised scan of a person’s iris, which is unique, is an example of something that can be used as a digital signature. Again, someone can hack into your computer or steal your laptop and get hold of your encryption key. But then all you have to do is get yourself a new one.
LAWS RELATING TO ELECTRONIC SIGNATURES
The laws that have been enacted on electronic signatures have a facilitation role: their purpose is to remove objections to a signature being provided electronically (which includes digitally) instead of physically. Like any new development in the law – which is often slow to change – it takes time for these new rules to take shape and become accepted universally. On the 20th anniversary of the 1996 UNCITRAL Model Law, we can look back and see that the world has been transformed by digital commerce, and that the capacity of parties to transactions to rely on electronic signatures have been boosted by the various national laws and the EU rules based on the Model Law.
If you are interested in the specifics about how these laws facilitate digital signatures, you can start with this Wikipedia article for your research.
[Photo credits: (1) Why NIR is needed, by The Economist, and (2) USMC-060406 US Marine using a common area ID card (c) 2006 US Government, both public domain photographs made available by Wikimedia Commons. This article is not intended as legal advice for any person. The Author, James Irving of Irving Law, is a commercial lawyer who practises in Perth, Australia. Please visit the Irving Law website for more information.]