PART 8  ELECTRONIC CONVEYANCING

72. The most important single function of the Bill is to create the necessary legal framework for the introduction of electronic conveyancing. It may assist the committee to have some more detailed background on the approach, and that is set out in the Annex. As the Annex makes clear, many of the detailed arrangements for the operation of electronic conveyancing will need to be developed in extensive consultation with customers and conveyancers. The various elements of the system will probably be implemented most effectively in stages over a period of years, starting with the simplest matters and progressing gradually throught the more complex transactions. The various stages will almost certainly needed to be tested by pilot schemes, and it is quite likely that procedures will need to be revised after initial implementation. The Law Commission therefore recommends that the Bill should seek only to provide a structure within which electronic conveyancing can operate, leaving the exact manner of its operation to be laid down from time to time and in rules. It is the considered view of both H. M. Land Registry and the Law Commission that it would be impossible to introduce electronic conveyancing in any other manner than that which the Bill adopts. That is the only way which enables the legislative framework to be in place in time, and at the same time to offer sufficient flexibility for future developments.

73. Not all of the rules applicable to electronic conveyancing are land registration rules. The Bill requires the Lord Chancellor to consult such persons as he considers appropriate before making certain electronic conveyancing rules, which once made are subject to annulment in pursuance of a resolution of either House of Parliament.

CLAUSE 91   ELECTRONIC DISPOSITIONS: FORMALITIES

74. Clause 91 paves the way for electronic conveyancing. It enables dispositions to be effected electronically when they would otherwise have to be made in writing or by deed. By meeting the requirements that it specifies, the parties to an electronic document will be taken to have complied with the requirements for a written document or a deed. It lays down a uniform requirement for making any electronic document, whether that document does the work of a deed or of signed writing. When properly authenticated by an electronic signature, such documents will take effect at the time and date that they specify.

75. The Lord Chancellor is given power to specify by rule the kind of dispositions that may benefit from these provisions. Under the scheme, when a particular kind of disposition is specified, there will also be prescribed by rules what form an electronic document must take when used to make such a disposition. It is expected that electronic forms will be prescribed in stages, until they are available for all dispositions that could be made in electronic form under the clause. Power is also given to prescribe other conditions which electronic documents must meet to be validly executed. This will provide flexibility in relation to the creation of dispositions in electronic form.

76. Under the Bill it will become possible to assign electronically legal and equitable interests in registered land that are not registered estates and charges, but are currently merely protected by the entry of a notice, completing that assignment by a change in the terms of the notice. Rules will prescribe the form of an electronic notice which will be deemed to comply with the requirements for writing contained in the Law of Property Act 1925.

CLAUSE 93   POWER TO REQUIRE SIMULTANEOUS REGISTRATION

77. In the current system of conveyancing, there is an inevitable gap between the execution of a disposition and its registration. One of the benefits of electronic conveyancing will be to remove this gap by permitting simultaneous execution and registration. This would eliminate any risk of the creation of third party interests in the interim. The register will also become conclusive as to the priority of many interests in registered land. Clause 93 includes a power to require dispositions to be in electronic form by providing that a transaction would only take effect if the electronic disposition is electronically communicated to the registrar, and the relevant registration requirements are met. By making its use compulsory, more of the advantages of an electronic conveyancing system, such as swiftness and cheapness will be achieved.

78. The clause will apply only to dispositions which have been specified by rules. This will enable the Lord Chancellor to make rules in relation to different dispositions as the use of electronic conveyancing to make them becomes sufficiently the norm, and as satisfactory arrangements are put in place for assisting those who are unable or unwilling to use electronic means. The registration requirements for registrable dispositions are set out in Schedule 2. Requirements for other dispositions, or a contract, will be set out in rules. This will enable the development of a flexible, and perhaps a staged, approach.

79. Rules under clause 93 are not land registration rules (see clause 129(1)) and are subject to annulment by resolution by either House of Parliament (see clause 125(4) (a)). In addition, clause 93(5) requires the Lord Chancellor to consult such persons as he considers appropriate before making rules under this clause.

CLAUSE 94   SUPPLEMENTARY

80. Clause 94 completes the framework for the development of procedures for electronic conveyancing by delegating to the Lord Chancellor power to make rules relating to the communication of electronic documents to the registrar and provision for their storage in electronic form.