Covid-19, technology and law: to evolve or to die

Back to Young Lawyers' Committee publications

Francisco Algorta
Montevideo, Uruguay
falgorta@pvci.com.uy

Covid-19 has been, without a doubt, the greatest challenge of the decade, pushing all of us to implement new tools in order to adapt to this new reality. It has caused tremendous damage, but also required us to search for new ways to interact and communicate. In this respect, technology has played a major role, allowing society to create new ways to network and enabling working people to create alternative workplace environments.

Platforms such as Zoom are benefitting, given that individuals are using them to connect with each other and renew their ways of doing business, proving that it is not essential to travel from one place to another in order to undertake negotiations.

Moreover, Covid-19 has also revealed how far behind we are in applying technology to the legal world. Countries including the United Kingdom and many in Latin America now represent hotspots for the disease. Countries such as Argentina, Chile and Panama are still in lockdown, forcing people to stay at home and stopping them from travelling to their places of work. Although, as already mentioned, it has been proven that being present in the office is not essential, there are still situations that require physical attendance. For instance, Uruguay’s Business Companies Act No 16,060 clearly shows how advanced we are in terms of the implementation of technology in corporate law. This Act states that a meeting of shareholders must be conducted in the company’s siège social or another location within the same town and that the shareholders must be present in order to vote and decide, or otherwise vote by proxy.[1] It goes without saying that shareholders' meetings via videoconference are not seen to be a viable solution, although this does occur in other civil law countries such as Spain.[2] During times like these where mandatory confinement is imposed by government, no company will be able to, for example, approve its financial statements or appoint a new board of directors: such actions must be decided by a shareholders’ meeting and cannot be voted on remotely. In essence, companies face a situation where resolutions at shareholder level cannot be adopted.

Notwithstanding this, a new Act has allowed a specific type of company to hold shareholder meetings via videoconference, proving that such videoconference meetings are possible and are also, in fact, a viable solution. It is therefore only a matter of time before videoconferencing becomes a legitimate mode for this kind of activity.

In addition to this, estate planning, wills and testaments have encountered some difficulties too. It is true that the preparation of a will itself can be done remotely, as testators can advise their lawyers as to the content of the will by electronic means such as Zoom and FaceTime. However, problems appear where the execution of the will is concerned. This is due to the fact that the testator must sign the will in presence of at least two witnesses, each of whom must also sign the will in the presence of the testator, which is a clear challenge during social distancing. One might think that this problem may be easily resolved by having a son or spouse witness the signing of the will. However, beneficiaries and close relatives cannot act as witnesses. This is therefore not a viable solution. Perhaps a mechanism could be implemented that covers the possibility of signing these documents in a remote manner and at the same time protects veracity. Nonetheless, there are those who understand that in this type of case, electronic means could facilitate instances of document falsification, as little control could be exercised.

Finally, this pandemic has also brought to our attention that there are other means for signing documents, such as the electronic signature. Although electronic signatures have already been accepted in some cases, they are still being explored because of the fact that not all documents can be signed electronically. For example, any agreement that needs to be signed in the presence of a notary public cannot be executed by an electronic signature. The same applies to wills and testaments or corporate resolutions, such as the resolution of the board of directors and shareholders, which must be signed in manuscript form.[3] It must also be stressed that, for example, prior to the lockdown in the UK, HM Revenue and Customs required share transfer documents to bear ‘wet ink’ signatures. However, due to Covid-19, this requirement has been temporarily lifted, allowing these documents to bear e-signatures ‘while coronavirus measures are in place’[4], showing that drastic times call for drastic measures; that alternatives can expedite these processes, and that ‘wet ink’ is no longer essential.

In conclusion, it seems that, in a time where social distancing and self-isolation are essential for combatting this pandemic, the requirement of physical presence for conducting business represents a great challenge. Uruguay has been a focus of world media thanks to its effective response to the pandemic. Even recently, its new app, launched to fight the virus, was recognised by the CEOs of Apple and Google. This is proof enough that technology can allow us to implement more agile and less expensive processes, even in the field of law.

Back to Young Lawyers' Committee publications