The Consumer Credit Act 1974 was amended in 2004 to allow for electronic signatures. Those amendments came four years after the passing of the Electronic Communications Act 2000. Slowly but surely more and more lenders are taking to electronic signatures to complete credit agreements and other credit documentation in a fast and efficient manner. So whilst permitted, so it would seem since 2004; the High Court has gone back to the future to provide authority for the use of electronic signatures.

On 26 February 2014, the High Court handed down judgment in Bassano –v- Toft and Others [2014] EWHC 377 (QB). Amongst other things, the Court held that a signature concluded by electronic means was a properly executed credit agreement in light of the requirements laid down by the Consumer Credit Act 1974 (as amended) (“the Act”) and its attendant regulations.

In his judgment, Popplewell J, sitting additionally as a Judge of the Central London County Court, stated at paragraph 43:

[43] Section 61 of the Act requires the agreement to be signed “in the prescribed form”. The form prescribed at the time was that required by The Consumer Credit (Agreements) Regulations 2010 (SI 2010 No 1014). Regulation 4 governs signing. The only relevant prescription is in reg 4(3)(a) which provides that the signature must be in a space indicated in the document for that purpose and dated. Regulation 4(5) recognises that a regulated agreement may be concluded electronically and that the document may contain “information about the process or means of providing, communicating or verifying the signature to be made by the debtor”. There is therefore nothing in the Consumer Credit Act 1974 to suggest that regulated agreements should not be capable of electronic signature; and I can see no reasons of policy why a signature should not be capable of being affixed and communicated electronically to an agreement regulated by the Act, just as it can for other documents which are required to be signed

This provides a good deal of comfort for lenders who have already entered into the world of cyber signatures. Whilst only a High Court decision at this stage, and therefore capable of being overturned in future, it is a decision which, in our view, is unlikely to be overturned given the general direction of e-commerce and similar judgments such as that of the Court of Appeal in Golden Ocean Group Ltd v Salgaocar Mining Industries PVT Ltd and another [2012] EWCA Civ 265, which involved a guarantee.

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