Identity Verifications in Electronic Conveyancing

In the current paper- based process of conveyancing, legal practitioners, licensed conveyancers and financial institution officers prepare instruments and in most cases have their clients sign the documents in front of a witness who also signs. While practitioners, conveyancers and banks have a duty to ensure that the person they are dealing with is who they say they are, they also rely on the person to certify the correctness of the information in the dealing by signing it in front of a witness.

Replacing Traditional Signatures

In electronic conveyancing, electronic instruments and dealings will be digitally signed by legal practitioners, licensed conveyancers and authorised officers of banks and other lenders. They will certify the correctness of the information as well as having carried out and documented a prescribed process to verify the identity of the proprietor or other transacting party they are representing. In the absence of a personal signature of the proprietor or other transacting party on the instrument, the Land Registry will entirely rely on the practitioner’s certification in changing the details recorded on its Torrens Register.


No Need for Signature Witnessing

In electronic conveyancing it will not be necessary for the digital signatures of practitioners and authorised officers of financial institutions to have their signatures on instruments witnessed. This is because practitioners and authorised officers have their identity independently verified as part of the process of being issued with a digital signature.

Identity Verification Procedure

The identity verification process that practitioners will be required to follow is expected to be prescribed in regulations. The process will be consistent with the obligations placed on financial institutions by the Commonwealth’s Financial Transaction Reports Act 1988. This Act prescribes the 100-point identity verification procedure currently widely used by banks and other lenders. If and when this legislation is replaced under the Commonwealth’s anti-money laundering and counter terrorism financing proposals, the new procedure replacing the 100-point check will become the basis for identity verification in electronic conveyancing.

Special Arrangements for Long-Standing and Remote Clients

To supplement the procedures used by financial institutions in verifying the identity of their clients, special arrangements are intended for practitioners to vouch for the identity of long-standing clients and to rely on the certifications of other practitioners when representing clients from remote areas. These arrangements will balance the need for closer attention to identity verification with the practicalities of representing clients in certain circumstances.

Certifying Compliance with a Prescribed Procedure

Practitioners certifying having properly carried out and documented a prescribed procedure to verify the identity of a client are certifying compliance with the procedure only. They are not certifying the client’s identity or in any other way “guaranteeing” that the person is who they say they are. Practitioners able to adequately demonstrate having complied with the prescribed procedure, will be able to confidently defend against their negligence having contributed to a loss from their client’s identity fraud.

Identity Document Verification

The Commonwealth Government is currently testing a new service that will enable practitioners to verify the authenticity of documents presented to them as proofs of their client’s identity. The service, to be available over the Internet, will allow practitioners to be confident that a birth certificate, passport or driver’s license, for example, has been issued by the relevant State or Commonwealth agency in the same name and with the same particulars as a document presented to them by their client as a proof of identity. While this new service when it becomes generally available will not prove that any document is genuine, it will allow greater confidence to be placed in the document because its details match those on record with the relevant government agency.

National Consistency

It will be of assistance to practitioners dealing with clients in more than one jurisdiction for the required identity verification procedure in each State and Territory to be the same. This issue is expected to arise in the national consultation on electronic conveyancing issues due to commence shortly.

Source: Electronic Conveyancing in NSW - Newsletter No. 17