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Lord Razzall: On these grammatical amendments, I wonder whether this is an opportunity for me to raise two slightly more fundamental points on Clause 7, on which he indicated he would make a statement in Committee today.

First, there is what I would describe as the Microsoft point, which is, as I said at Second Reading, not necessarily a reason for rejecting it. The approach of Clause 7, as the Minister has indicated, is clearly one under which the 40,000 estimated references to writing in various statutes will be left to the appropriate Ministers--dare I say, civil servants--to deal with. That is the approach of Clause 7. It is the Microsoft argument and the argument of other computer companies that it would have been better to approach it the other way round, so that there is a general recognition that electronic signatures are substituted for writing wherever they appear in legislation, subject to a general carve-out. I believe the Minister has a very clear argument as to why the Government have taken this particular view and it would be helpful to the Committee if he were to explain it.

The second point is to ask for confirmation, also in relation to Clause 7. There has been a suggestion that Clause 7 does not comply with our obligations under the European directive with regard to electronic signatures. I know that the Minister disagrees with that view but it would be helpful if he could set out the Government's position on it.

Lord Sainsbury of Turville: We have made our position clear and the point which the noble Lord is really addressing relates to Clauses 7 and 8 together. In light of Parliament having laid down certain things in legislation there are some 40,000 references to documents written signed or delivered and so on. We should proceed by looking at these in detail rather than on a basis of saying that we shall automatically allow all those to be done electronically. That point was

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raised at Second Reading and is fundamental to the Bill. Indeed, we have thoroughly rehearsed the arguments for doing that.

I am also asked how Clause 7 implements Article 5 of the EU Electronic Signature Directive and perhaps I can cover that point. Article 5(1) of the directive concerns advanced electronic signatures being given the same legal effect as hand-written signatures. Clause 7 makes all electronic signatures admissible in UK courts and we do not, therefore, need to make explicit provision for advanced electronic signatures. We will, of course, in the context of orders made under Clause 8, need to ensure that the requirements of Article 5(1) are adhered to.

Article 5(2) of the Electronic Signature Directive is intended to ensure that any electronic signature, in other words even those that do not meet the standards of those considered advanced electronic signatures are not denied legal effect. Clearly, the approach taken in Clause 7 also implements this. In discussions with the Commission it has been noted that the proposed language in Clause 7 encompasses, and in some ways is broader than, the requirement for legal admissibility in Article 5(2) of the directive.

To complete the picture, Article 1 provides that the directive does not interfere with national or Community requirements of form regarding the use of documents; in other words, the directive is concerned with the admissibility of signatures, as in Clause 7, and does not deal with other barriers to the use of electronic means which this Bill deals with in Clause 8.

In summary, I am confident that we are implementing the requirements of the directive relating to the admissibility of signatures; indeed, we are going further.

On Question, amendment agreed to.

4.15 p.m.

Lord Sainsbury of Turville moved Amendment No. 19:
Page 6, line 18, leave out ("with").

On Question, amendment agreed to.

[Amendment No. 20 not moved.]

Lord Sainsbury of Turville moved Amendment No. 21:
Page 6, line 32, leave out second ("with").

On Question, amendment agreed to.

[Amendment No. 22 not moved.]

On Question, Whether Clause 7, as amended, shall stand part of the Bill?

Lord Lucas: This may be a convenient moment to raise some points upon which I touched at Second Reading; namely, proof of delivery and believability of signatures. I seek elucidation from the Minister as to how these matters are to be dealt with. One of the important things to know about a document is that it has been delivered. There are conventions as to when a letter has been delivered. What kinds of conventions does the Minister intend shall come into force as to the

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delivery of an electronic document? Is it delivered when it has left someone's PC, or does it have to be certified at a later stage in the network?

As to the believability of signatures, for example in the purchase or sale of a house there is a chain of people, each of whom is identifiable and believable. That makes the signature that is written believable to the person who must place reliance upon it. There is myself and a couple of solicitors at the end of the chain. At each point in the chain there is person-to-person recognition. That transmits the believability of the signature from one end of the chain to the other. How does the Minister envisage this will happen if it is merely an electronic process without any people evidently being involved in it? How can one place that kind of personal reliance on an electronic signature as representing real money and real people with whom one can deal at the end of the day?

Lord Sainsbury of Turville: There are two different issues here. I am grateful to the noble Lord for raising the question of delivery of documents. This is the kind of issue that is raised in a whole series of legislative measures. It makes the point exactly as to why one has to go through individual parts of the legislation and establish these facts rather than try simply to cut through the whole of this legislation by saying that electronic signatures are acceptable. We have to work through these matters and say that in certain cases some kind of proof of delivery must be given and in others not. That makes the case entirely for the way that we approach this Bill. I am grateful to the noble Lord for making that point.

As to authenticity and integrity, they are absolutely fundamental to the whole subject that we are debating here. On the one hand one has registration; on the other one has the certification by the cryptographic services. The one who certifies an individual is the relevant person in this case. The other is about whether that person, having put the signature into some kind of electronic communication, knows at the other end that there is integrity to it. These are exactly the sort of issues that certification and cryptographic service providers are there to address.

The Earl of Erroll: There is a big difference between sending out a document and receiving a document. If you have received a document which may have contractual materials in it, and it has an acceptable electronic signature from an approved and certified service provider who may also be providing cryptography services, you know you have a contract.

Sending out a document is a completely different matter, that of trying to prove that someone has received something. However, the two are totally different. It does not deny the blanket approach, saying that if you have received something that should be legally admissible, and it should be possible to use that in court in a blanket sense.

The other problem is sending something out and not knowing whether it has arrived. You may well not know. Recently a document took three days to reach

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me from America, having been held up on various servers. Proof of receipt from the point of view of the person sending is a different problem, but the other approach should be there. There should be blanket recognition that if you have received a document, the electronic signature should be acceptable for all documents that are otherwise acceptable in court, as an alternative to a written signature.

Lord Lucas: The question goes beyond what the noble Lord said. The noble Lord said that we agree with one another, that these are problems to be faced. However, I was hoping for some guidance from the Minister as to the way the Government are thinking these problems might be solved. Then we can understand in the course of considering this Bill that it makes proper provision for this to be done in an acceptable way. I would, therefore, be very grateful if the noble Lord could at least give a couple of examples of the sort of proof of delivery that the Government would consider acceptable in particular circumstances, and to refer again to the question of believability of signatures. If I receive a signature, and presumably it checks out, it is the signature of what? Of an electronic name and address. How do I make the connection to the person, so that I know the signature is that of a real person, rather than just an electronic identity which goes with a cryptographic signature?

We have been looking at this in Clause 8 in some detail. It is very important that there is a real person at the other end who can be sued if things go wrong. If you are transferring real property you only have the right to sue. In many circumstances you do not have the right to get your property back. It is therefore important that you know what is at the other end rather than simply that a signature is valid.

Taking that particular example, how do the Government imagine that chain of knowledge of the identity of people will be maintained? Do they think we will need a chain of solicitors to do it, which means that it will be impossible to run a totally electronic system to transfer property? Will we have to change the law of property in some way to make the position of the seller rather better than it is at the moment under a system which presumes there is this exchange of knowledge underlying the signature?

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