All about electronic signature. When to use it and its legal value

In the midst of the transition to a new digital age, the current pandemic is accelerating change and paving the way for more efficient social relations in terms of time management, in an environment that ensures both the speed of information transmission and data security and confidentiality. We are witnessing the stages of the dematerialization process started even before the establishment of the state of emergency, which brings major benefits and significantly simplifies the daily activities of not just individuals and legal entities, but also of public authorities and institutions.

More and more often, within organizations, the question arises: "Can I sign document X with an electronic signature?" or "Does an electronic signature have the same legal effect as a handwritten one?" The answers are nuanced depending on the type of electronic signature, as we will detail below.

Since 2014, European Union has taken a series of measures to facilitate the development of a data-based economy, including EU Regulation no. 910/2014 on electronic identification and trust services for electronic transactions in the Internal Market and repealing Directive 1999/93/EC (“eIDAS Regulation”).

In Romania, the use of electronic signatures is regulated by:

• eIDAS Regulation, directly applicable;
• Law no. 455/2001 on electronic signature (“Law no. 455/2001”);
• Government Emergency Ordinance no. 38/2020 on the use of electronic documents in relation to public authorities and institutions (“GEO no. 38/2020”);
• Law no. 208/2021 for the approval of the Government Emergency Ordinance no. 36/2021 on the use of the advanced electronic signature or qualified electronic signature, accompanied by the electronic time stamp or qualified electronic time stamp and the qualified electronic seal of the employer in the field of labor relations, and for amending and supplementing other normative acts (“GEO no. 36/2021”).

It is gratifying that more and more public institutions have begun to adopt digital solutions for remote transmission and signing of documents, including in the field of labor relations, but we still have a long way to go towards digitalization.

You will find below what is, but also what is not, an electronic signature, the types of electronic signature, the legal effects depending on each type and how we can obtain such a signature.

What is an electronic signature?

Electronic signature is defined as a collection of data in electronic form, attached or logically associated with other data in electronic form, which serve as a method of identification and which are used by the signatory to sign. In other words, the electronic signature gives the person reading a certain document the confidence that it was made or at least assumed by a certain person, signed at a certain date and time and the certainty that the document has not changed.

What is not an electronic signature?

It is very important to understand that not all so-called electronic signatures (this term being misused and misunderstood) give legal effects to the document signed through it. Therefore, the electronic signature should not be confused with the application of a digital file containing our handwritten signature on a document, the signing of a document by means of graphic tablets (for example, with the digital signature), nor with the "moving" of the electronic signature applied to a document on to another or the application of the image / picture of the handwritten signature on a document. All these examples are not qualified electronic signatures.

Types of electronic signature

There are 3 types of electronic signature:

1. Simple electronic signature - has a low level of trust. Examples are the contact details entered in the signature in an e-mail, the biometric signature (made on a tablet). With this type of signature, you can sign electronic documents with a low level of risk.

2. Advanced electronic signature - has a medium level of trust. According to the eIDAS Regulation, it is an electronic signature that: (i) refers exclusively to the signatory; (ii) allows the identification of the signatory; (iii) is created using electronic signature creation data that the signatory can use, with a high degree of trust, exclusively under his control; and (iv) relates to the data used for signing so that any subsequent changes to the data can be detected. It can be used to sign electronic documents with a medium level of risk (for example, used internally for signing leave requests, statements or forms [DocuSign, PandaDoc, etc.]).

3. Qualified electronic signature - provides the highest level of trust. It is an advanced signature, created using a qualified electronic signature hardware or software device (usually a token), based on a qualified certificate issued by a qualified trusted service provider. It can be used to sign documents with a high level of risk, such as: credit agreements, commercial or service contracts, employment contracts and their addenda, representation mandates, mediation contracts, tax invoices, medical documents or documents circulated between individuals and companies with the public authorities.

In Romania, the qualified providers of trusted services are listed in the register prepared and constantly updated by the public authority specialized in the field. According to the information published by the Romanian Digitalization Authority at https://www.adr.gov.ro/semnatura-electronica-trusted-list/, the qualified electronic signature services are currently offered by the following 5 providers: AlfaTrust Certification SA, Centrul de Calcul SA, Certsign SA, DigiSign SA, Trans Sped SRL. Also, the full list of trusted service providers in the Member States can be found HERE.

Very important to note that, according to art. 25 para. (3) of the eIDAS Regulation, only a qualified electronic signature (not advanced or simple) based on a qualified certificate issued by an EU Member State is recognized as a qualified electronic signature in all other Member States.

Therefore, the essential difference between an advanced electronic signature and a qualified one is that the latter is created by a qualified electronic signature creation device, based on a qualified certificate for electronic signatures. These additional security features of the qualified signature establish the presumption that the identity of the signatory is the real one, which is why this type of electronic signature is considered the most "secure".

Another significant aspect that makes the difference between an advanced electronic signature and a qualified one is that the latter offers the highest legal value. Thus, only the qualified electronic signature has the value of a handwritten signature per se, whilst for the other types of signatures technical expertise is required whenever is intended to demonstrate their legal value.

What are the legal effects of electronic signatures?

Simple and advanced electronic signatures can create the legal effects of a document under private signature when someone signs:

• a legal act for which the written form is not required by law for the validity or proof of the respective act (ad validitatem and ad probationem), when the parties agree on the use of such a signature in their relations (for example, various types of contracts, orders, invoices);
• any legal act, provided that the party to whom such a signature is opposed recognizes the signature (the recognition will also be made in the form provided by law for the validity of the act, or before the court);
• any legal act with an advanced electronic signature, in the absence of recognition of the adverse party, when the interested party demonstrates the fulfillment of the four cumulative legal conditions: (i) refers exclusively to the signatory; (ii) allows the identification of the signatory; (iii) is created using electronic signature creation data that the signatory can use, with a high degree of trust, exclusively under his control; and (iv) relates to the data used for signing so that any subsequent changes to the data can be detected.

In the case of a qualified electronic signature, these conditions are presumed to be met, unless proven otherwise.

According to the provisions of GEO no. 38/2020, the advanced electronic signature has the legal value of a handwritten signature in the relationship of individuals / legal entities with public authorities and institutions. Also, according to the provisions of GEO no. 36/2021, the parties to an individual employment contract may opt for the use of the advanced or qualified electronic signature accompanied by the time stamp, provided that the parties use the same type of signature.

Qualified electronic signatures have the legal effect of a document under private signature, more precisely it has the legal value of a handwritten signature. Any legal act can be signed with this type of signature, including:

• legal acts for which the written form is required by law ad validitatem (lawsuit, constitutive act of a company [when the notarized form is not mandatory], individual employment contract, surety, vote expressed in the meeting of associates / shareholders of a company, when the partner/shareholder is not physically present, handwritten will, tax returns, etc.);
• legal documents for which the written form is required by law ad probationem (commission contract, consignment contract, agency contract, legal aid contract, transaction contract, insurance contract, company contract, deposit contract, etc.).

What are the legal effects of electronic signatures from a third country?

According to art. 25 para. (3) of the eIDAS Regulation, a qualified electronic signature based on a qualified certificate issued by a trusted service provider in an EU Member State is recognized as a qualified electronic signature in all other Member States.

But what happens to an electronic signature that comes from a non-EU state (for example, DocuSign - USA)?

In the case of trusted service providers established in a third country, the trust services provided by them will be recognized as legally equivalent to those provided by qualified trust service providers established in the Union, if their services are recognized under an agreement concluded between the Union and the third country concerned or an international organization in accordance with Article 218 TFEU (Article 14 eIDAS Regulation).

On the other hand, the provisions of art. 40 of Law no. 455/2001 stipulates that the qualified certificate issued by a certification service provider established in a third country is recognized as legally equivalent to the qualified certificate issued by a certification service provider based in Romania, if : (a) that provider has been accredited according to local rules, (b) an accredited provider based in Romania guarantees the certificate, or (c) the certificate or provider is recognized by applying a bilateral or multilateral agreement, on the basis of reciprocity.

Therefore, an electronic signature that originates from a third country and does not meet the conditions to be considered a qualified electronic signature may produce legal effects as an advanced or simple electronic signature, as the case may be, in the situations mentioned above in the section What are the legal effects of electronic signatures? regarding the legal effects produced by the advanced and simple electronic signature.

How can I get an electronic signature?

The process of obtaining an electronic signature is relatively simple. In general, a form is filled in, which can often be done online, the necessary documents are sent, including proof of payment of the certificate (prices vary depending on the period of validity, from 5 Euro to 110 Euro), and as a final step the provider will issue the requested certificate. It should be mentioned that the electronic signature obtained is not permanent, this being valid for a specific period of time depending on the chosen package (24h, 1 year, 2 years, 3 years), and for its maintenance a renewal is necessary.

Lately, more and more companies are choosing to use electronic signatures to ensure a flow of documents, to the detriment of the classic method of consuming resources and time, and to abandon paper-signed documents, which are carried by couriers between signatories.

However, there are still many conservative companies that are reluctant to adopt new technologies and digitalize certain processes, motivating their skepticism in terms of data security concerns, legality of signatures or perhaps misperception of high implementation costs.

Let’s see how things evolve and to what extent the appetite for digitalization of organizations and individuals will increase.

For more details on the use of the electronic signature, please contact Ramona Chitu, Associate within the TMT department of the law firm Stratulat Albulescu, at the email address RChitu@saa.ro.