Although in draft form, the Bill is likely to come into force early next year and will deal with legal recognition of digital signatures and the establishment of a voluntary approvals regime for providers of cryptography support services.
The inclusion of the Bill follows an extensive consultation process between industry and the DTI. Originally promoted as the Electronic Commerce Bill, the Bill has been diluted since its inception, not least by the announcement that the government has dropped the new police powers to require disclosure of keys necessary to make encrypted messages readable.
Following concern from several groups, these powers are now likely to be contained in future Home Office legislation. The Bill will result in relatively light regulation of the e-commerce industry.
Its digital signature provisions, which confirm that electronic signatures will be legally admissible in court, have been applied in practice for some time. Similarly, the approvals regime under which providers of cryptography services can obtain a badge of approval from a government appointed organisation will be entirely voluntary. The government hopes the regime will influence people to trust cryptography providers and encourage them to get more involved in e-commerce.
Although the Bill fails to deal with some areas which were raised during the consultation process the Bill has generally been welcomed as it illustrates the government's commitment to e-commerce. If the government really wishes to turn the UK into 'a dynamic, knowledge-based economy' as indicated in the Queen's speech, the Bill is a good start. However, industry is not likely to be satisfied until the government addresses 'real money' issues, such as tax and customs breaks, which could make the UK more attractive for electronic business.
Tim Simmonds is a solicitor in the Information, Technology & Communications Group at City law firm Berwin Leighton.
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