Peter Johnson highlights the complexities that arise from historical issues in SMSF trust deeds and provides practical strategies to address these challenges. […]
Who Bears The Risk With Electronic Signatures?
Acis, current as of: 17 March 2016.
We made comment around this time last year about the gaps in the law regarding the execution of documents by way of electronic signature.
There still seems to be doubt about the validity of some documents (particularly trust deeds) executed using an electronic signature. The services that have developed the electronic signature capability, and those automated document providers that produce trust deeds, won’t confirm that these deeds are legally binding. Even so, some automated document providers persist in offering an electronic signature service.
If they are not accepting responsibility for the validity of the deeds they produce, all of the risk shifts to practitioners who are using this option for their clients’ trusts and SMSFs. We encourage Acis clients to contact their insurers on this issue, to ensure they are covered under their PI insurance.
We read comments in an article, only this week, by a noted SMSF lawyer to the effect that SMSF trust deeds may not be binding, according to their terms, if signed using an electronic signature (at least in Eastern states). The lawyer is one of a growing number of people dealing with trust deeds, who take the view that the use of electronic signatures is putting practitioners, and their clients, at significant risk.
We’ve made no secret of the fact that Acis will be among the first to embrace electronic signatures on trust deeds – once the system is working. Until we are convinced of the effectiveness of electronic signatures in relation to trust deeds, our recommendation is to avoid the risk until the legal environment is clear.
If you have any queries relating to the risk of implementing electronic signatures, please contact Legal Services on 1800 773 477.