Law Commission consultation on electronic trade documents – Law Society response
The Law Commission has announced a consultation on proposals to allow for the legal recognition of electronic versions of documents (such as bills of lading and bills of exchange).
The consultation is accompanied by a draft bill that would implement the proposals.
The proposals highlight three criteria that electronic trade documents would need to meet so that they can be possessed in the eyes of the law and therefore used for global trade as an alternative to paper versions:
- the document is a trade document of the kind listed in our draft legislation
- the electronic document is capable of exclusive control
- the electronic document must be fully divested on transfer
We commend the simplicity of the draft bill in seeking to allow for electronic trade documents to have the same effect as paper form trade documents.
We suggest that the following key benefits of electronic trade documents are actively detailed, in addition to the specific changes to the legal framework through the bill:
Electronic trade documents will reduce the lead time for hard copy documents to be sent to the respective parties. It will overcome delays from difficulty in obtaining wet ink signatures through the physical unavailability of signatories.
With the information on trade documentation becoming electronic, there is less need for manual and error prone review and extraction of key information from paper documents, which would now be in a native data-friendly form.
Reduced risk of fraud and forgery
Technology will enable greater controls to prevent forgery (which is always a risk on paper-based documents).
Easier storage and retrieval
Digital documents can be stored and located more easily than their paper counterparts.
The consultation closed on 30 July 2021.