Lawyers say get an ETB manual

Organisations may need a policy manual of sorts to help staff process electronic transactions safely under proposed legislation, say lawyers.

Organisations may need a policy manual of sorts to help staff process electronic transactions safely under proposed legislation, say lawyers.

Lisa Holt, a senior solicitor at Russell McVeagh, told a conference in Auckland last week that organisations will need effective risk management strategies to deal with online transactions under the proposed Electronic Transactions Bill (ETB). Given the security concerns due to authentication of transactions and potentially large liabilities, this may involve going down the path of encryption, she says. There’s also the standardisation of forms, jurisdiction issues with overseas partners and the provision of electronic signatures to deal with, she says.

The ETB is a good first step toward making electronic deals possible for organisations and digital transactions and signatures legally equivalent to those on paper, say Holt and Russell McVeagh partner Mike Cronin, speaking at the IIR e-business law seminar.

No one will be obliged to use electronic means to do business, and the decision to opt for digital or paper transactions will be controlled by the recipient. The freedom of transacting parties to apply extra rules under contract law is preserved, says Cronin.

The ETB — the commerce select committee reported back its recommendations in June 2001 and the bill is still making its way through parliament — is intended to facilitate the growth of e-business, remove legislative barriers to online trade and cut compliance and transaction costs, and make this country’s laws compatible with those of its trading partners, says Cronin.

It will provide default rules for technical issues such as time and place of dispatch and receipt of a transaction, says Cronin. It doesn’t define what a signature is, says Holt, leaving much to common law — and the private sector. The level of evidence required for authentication, for example, differs widely between providers, she says. “Not all digital signatures are created equal.”

Cronin says the ETB is an “enabling” statute rather than one which radically changes things, so is not “vote-catching” legislation. Holt thought part of the reason the ETB has been held up was because it was “twinned” with the Crimes Amendment (No. 6) Bill, whose eavesdropping sections remain controversial.

However, its importance was disputed by the chair of the event, Peter Dengate-Thrush. Dengate-Thrush, an intellectual property barrister who is chair of the international affairs committee of internet body InternetNZ, says because it is “detail” about companies making deals, it is important legislation.

The ETB leaves other issues open, says Holt. These include questions of privacy, electronic crimes and transport law issues such as electronic bills of lading. Holt also notes that record-keeping could also be a concern, given that electronic records are equivalent to paper only if the integrity of the record is maintained, and the record and its receipt information can be readily accessed and retrieved. Many archives can already not be accessed, she says, and even suggests a “museum of technology” that will be able to access all formats of data storage.

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