Are scanned documents legally admissible?
Many organisations view the legal admissibility of scanned documents as a barrier to adopting truly paperless working practices; despite the fact that for the best part of two decades the law in the UK has given evidential weight to electronically stored information, subject to the appropriate authentication standards being met.
In this whitepaper, we will explore why so many British businesses hold onto this preconception, as well as examining how the more forward-thinking among them can digitise their data without worrying that they are compromising it from a legal perspective.
1. Legal admissibility and the paperless office
The idea of a paperless office has been around for decades, but for many organisations, it still seems like a practical impossibility, regardless of how appealing the concept is in principle. This is often frustrating for advocates of the concept, because while some of the barriers that they report are understandable; such as budgetary constraints, others are imaginary.
The latter include the common preconception that scanned documents will not be admissible, or given the same evidential weight in court as physical copies are.
i. Common obstacles to going paperless
In Winning the Paper Wars, a July 2013 report from the Association of Information and Image Management (AIIM), more than 500 information professionals were polled on the factors holding their organisations back from adopting paperless processes.
Some 44 per cent of respondents said they were not scanning documents because “physical signatures on paper are obligatory”, while 34 per cent worried that “legal admissibility will be compromised”. Respectively, these two concerns were the first and third most frequently cited overall, coming ahead of factors like the readability of scanned documents and whether or not electronic storage can be relied on.
This is problematic, because scanned documents have actually carried evidential weight in the UK since the mid- 1990s. Similar legislation has also existed in other territories for many years.
AIIM president John Mancini summarised: “Our research confirms that companies that adopt paper-free business processes benefit by reducing costs, improving customer service, and raising worker productivity. But we’ve also learned that executives are still not comfortable using electronic signatures and electronic documents, even though they are 100 per cent admissible in a court of law.”
Brian Wall, director of BML Solutions and an AIIM-accredited business process management master, agrees this is the case. “Most organisations assume paper is the only reliable source, so imaged copies are not acceptable,” he comments. “However, it is actually the factual content existing on the paper copy that is important – only in a very few cases are the paper and ink themselves challenged.”
ii. Why is legal admissibility an issue?
It is entirely understandable that organisations should be concerned that the authenticity of their data might be challenged if documents are stored in a particular way.
For example; law firms, financial services providers and property professionals (such as chartered surveyors) regularly hold contracts, leases and deeds that might need to be presented in court, and which bear the manuscript ink signatures of parties or witnesses that unequivocally evidence an agreement.
However, this is not the only way in which an agreement can be upheld in court. Michael-Jon Andrews of law firm Barlow Robbins points out: “The courts have always accommodated evidence from the parties to a dispute as to what was agreed between them without the need to see any physical record. Subject to the facts of a case satisfying the legal test for establishing the existence of a contract, verbal agreements are just as legally binding as those written down. One can also demonstrate what has been agreed by a course of conduct.”
It is also worth pointing out that documents and agreements bearing electronic signatures are admissible as evidence, as per the Electronic Communications Act 2000, the Electronic Signatures Regulations 2002 and the Electronic Commerce Directive 2000. In fact, many people sign documents electronically on a day-to-day basis without realising what they are doing. Logging into a bank account online, for instance, is a one-way authentication process that is legally equivalent to signing a piece of paper.
So, why do so many organisations still chase physical signatures when electronic alternatives are available? According to Doug Miles, head of AIIM’s Market Intelligence Division, it could be down to “a lack of trust on the part of legal counsel despite progressive legislation to the contrary” – meaning that decision-makers do not fully understand what the law requires, and do not, therefore, have the confidence to throw their weight behind an electronic signing solution. There are a number of reasons why organisations are widely confused as to the legal admissibility of their documents; both with regard to signatures, and digital reproductions in general. Perhaps the most significant reason is the absence of clear, consistent guidelines that all sectors could follow.
For example; HMRC, says that electronic tax records are acceptable, so long as the scanning process does not obscure any data – and the results can be presented to VAT auditors in a readable format when required.
The Law Society, conversely, noted in 1999 that it felt there was “a dearth of judicial authority on this topic” and recommended that a scanned document should only be considered admissible if there is evidence that the original has been destroyed. More recent practice notes have suggested that electronic information should be treated in the same way as any other material.
Meanwhile, the Financial Conduct Authority (FCA) Handbook says that any medium used to store records is acceptable, so long as those documents are readily accessible if a regulator should need to examine them, and they cannot be manipulated or altered in some way.
In summary, it is reasonable to suggest that while scanned documents are generally accepted by experts and courts, it can be something of a minefield for an organisation to prove that it complies with every possible set of guidelines.
What, then, are the characteristics that ensure a genuinely watertight electronic document storage solution?