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Are digital documents and electronic signatures legally valid in a court of law?

Electronic documents and records are quickly making their paper counterparts obsolete. While this technology has been making life easier for so many different industries, the legal industry has been slower to adapt. Evidentiary and authentication requirements, digital signatures, compatibility with the E-Sign and UETA acts as well as HIPAA are key points when considering a transition to a court-admissible digital documentation system.

Since this technology is proving so successful in the corporate world, it really begs the following question: Are there even any valid reasons for delaying this digital transition in the judiciary sphere? We can only speculate how much more efficient our legal system would be if a shift from paper to electronic documents took place. Let’s find out if it’s possible to completely debunk the old myth of digital documents being legally negligible.

 

What fears cause businesses to delay paperless transitions?

In 2013, only 18% of American companies considered themselves paperless. Today, 47% of American companies have moved their offices to the cloud. Although this rate of change is moving in the right direction, there are always going to be a number of obstacles along the way. Restrictions on digital workflows within the legal sphere are always changing based on the security standards that new technologies must adhere to.

The document-management company Fuji Xerox sampled 100 Australian law firms with less than 300 employees to better understand their preferences in using hard versus soft documents. According to this survey, 80% of the firms printed most of their received documents electronically. 79% preferred to use paperwork to exchange documents with other companies. Surprisingly, the primary reason for their continued use of hard copies was due to habit. The second most common reason was legal requirements and the third was the fear of an electronic copy being tampered with.

The security of digital documents is still a big concern for companies that handle sensitive data such as financial and legal information. However, according to Forrester Research, 25% of corporate data breaches occur, on average, because of a ‘malicious insider’, and 36% are caused by employee error. In total, it turns out that 61% of corporate data breaches are caused, in part, by human error from within the company.

Nowadays digital document platforms can easily cope with these breaches. PDFfiller guards against them with paperless transformations that allow users to protect every document with customizable user permissions, an audit trail and high-level encryption.

To ensure data protection, PDFfiller data is stored in Amazon S3 data centers which have multiple backup locations, instant and uninterrupted data access and military-level physical security barriers. Amazon Web Services (AWS) has been assessed and approved by independent auditors as a cloud service provider with security impact levels 1-5 of the Department of Defense’s Cloud Security Model. A few additional features were developed to keep your information safe. For example, the ‘My Forms’ page features an Encrypted Folder. This folder requires a unique password in order to access its stored content.


Digital signature concerns

When a document is presented in court, it must be recognized as authentic in order to be accepted as court-admissible evidence. Signed documents have to prove that they were signed by the party in question and not someone else. When an individual signs in the presence of a notary or witness, the authenticity of the document’s signature is legally sound and can be used as direct evidence that the signature is genuine.

But when a document is signed digitally, there is always the possibility that the party on the other end of the internet is not actually the one on whose behalf they are signing.

In 2016, California bankruptcy lawyer Paul Bains’ documents were refused in court because of the method he used to sign them.

Paul Bains used the DocuSign platform for bankruptcy petitions and other documents. But judge Robert Bardwil of the US Bankruptcy court of California ruled that DocuSign is not appropriate for replacing original signatures on legal documents. He said that the platform could be used for other business settings but not for legal ones.

Local Bankruptcy Rules state that an e-signed document can only be used when there is a copy of the document with a wet signature. According to local data retention policies, originally signed papers must be retained for three years. Bains didn’t obtain original signatures. But the issue was whether he really had to.

Primary concerns remain the same – some people still think there is an ever-present lack of assurance that a signature is added on behalf of the right person. The pivotal moment arrived when Bains was asked to prove that the electronic signature belonged to the legitimate party. But it was not possible, as the DocuSign e-signature was generated using a ‘click to sign’ button and the declared name itself was just a placeholder that could actually be filled by anybody.

The curious case of Paul Bains’ digital signature could have ended differently if a few important points had been considered.

 

Common rules for digitally signed documents

E-signatures may have gotten a bad reputation because people think that typing their name at the bottom of a document counts as an e-signature. In reality, this is not enough.

In order to meet court-admissible requirements, e-signed documents must include a verified audit trail, signer ID and comply with the ESIGN Act as well as the UETA.

Every U.S. state has at least one law pertaining to electronic signatures, but in most cases, the federal e-sign act takes precedent. However, if you find yourself in a particularly rare or complicated e-signature situation, be safe and double-check your state’s laws to ensure you’re within compliance.

To be one hundred percent sure that your e-signature technology will hold up in court, you’ll need to admit the signature as evidence and then verify its integrity. Admitting a digital signature as evidence requires expert testimony that describes the record creation process with information that supports its accuracy.

A digitally signed audit log has to be provided along with each completed signature throughout the document signing process. The audit log displays the time, date, transaction ID and user associated with each of the following actions.

Some platforms offer additional security standards. For example, PDFfiller provides a ‘Verified by PDFfiller’ stamp next to every signature. This stamp appears both in the editor and on the final version of the document. It serves as a ‘proof of notarization’ showing that PDFfiller, as a neutral third party, has verified the time and date when a user signed the document. The ‘Verified by PDFfiller’ stamp and the ‘Audit Trail’ feature let users keep track of all activity such as document changes, exports and imports. The ‘privacy feature’, unique to PDFfiller, is the Audit Trail’s ability to display a record of anyone who has logged into a user’s account and every document that has been changed.
SignNow is another e-signature vendor that provides users with a digital certificate as an additional level of security. This is an authentication method that allows individuals to verify if a document has been altered in any way. The digital certificate ensures that a document is free of any tampering after the signer has added their signature. If a change is made to a document after it was signed, the digital certification created by SignNow is broken, and the tampering is identified.

Both PDFfiller and SignNow comply with the eSign act as well as HIPAA regulations for data privacy and security provisions for safeguarding medical information.

A growing number of digital firms provide high quality and reliable legal documentation services. Keep in mind the main points listed above and you’ll never have to worry about a disputed e-signature.

 


 

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