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The Role of the Notary in Secure Electronic Commerce

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The Role of the Notary in Secure Electronic Commerce THE ROLE OF THE NOTARY IN SECURE ELECTRONIC COMMERCE by Leslie G. Smith A thesis submitted in accordance with the regulations for the degree of Master of Information Technology (Research) Information Security Institute Faculty of Information Technology Queensland University of Technology September 2006 Statement of Original Authorship “This work contained in this thesis has not been previously submitted for a degree or diploma at any other education institution. To the best of my knowledge and belief, the thesis contains no material previously published or written by any other person except where due reference is made.” Signed:…………………………………………………………….. Name:……………………………………………………………… Date:………………………………………………………………. i ii ABSTRACT THE ROLE OF THE NOTARY IN SECURE ELECTRONIC COMMERCE By Leslie G. Smith The profession of the notary is at a cross roads. The Notary operates in a world of paper- based transactions where the use of traditional signatures and seals are mandatory. The practices and procedures which have evolved over centuries simply cannot be applied directly in a digital environment. Establishing a framework for the authentication of computer-based information in today's commercial environment requires a familiarity with concepts and professional skills from both the legal and computer security fields. Combining these two disciplines is not an easy task. Concepts from the information security field often correspond only loosely with concepts from the legal field, even in situations where the terminology is similar. This thesis explores the history of the Notary, the fundamental concepts of e-commerce, the importance of the digital or electronic signature and the role of the emerging “Cyber” or “Electronic” Notary (E-Notary) in the world of electronic commerce. The research investigates whether or not the functions of the “Notary Public” can successfully evolve in the world of E-Commerce, and if so what are the ramifications. This thesis comprises a survey and critical analysis of proposed architectures and implementations for “Electronic Notary Services” in an Internet based, electronic commerce environment. It includes an analysis of relevant historical and legal factors relevant to these emerging technologies. Given the highly dynamic nature of this topic, iii this thesis does not propose or recommend a single architecture or implementation but emphasises the need for further research not only into technological factors but also into the real legal and social needs that affect the role of the E-Notary. The approach undertaken was an analytical approach to the available current documentation against input from leading practitioners included practicing Notaries from Australia, the United States and the Court of Faculties – London, iv TABLE OF CONTENTS Statement of Original Authorship i Abstract iii Table of Contents v List of figures ix Acknowledgments xi Glossary xiii CHAPTER 1 1 1. OVERVIEW OF THESIS 1 1.1. Appointment of Notaries 4 1.2. Scope of Research 5 1.3. Definition of the Problem 7 1.4. Summary 8 CHAPTER 2 9 2. THE HISTORY OF THE NOTARY 9 2.1. Pre Roman Civilizations 9 2.2. The Roman Era 11 2.3. The Middle Ages 13 2.4. The Reformation 18 2.5 1801 to Present 19 CHAPTER 3 21 3. THE MODERN NOTARY 21 3.1 Appointment of Notaries 22 3.1.1. Australian Notaries 22 3.1.2. England and Wales 23 3.1.3. United States of America 24 3.1.4. Civil Law Notaries 24 3.2. The Notary Seal 26 3.3 The Role of The Notary Public 27 3.4. The Apostille Convention 29 3.5 Elements of the Notarial Act 31 3.5.1. The Notarial Act – Private Form 32 3.5.2. The Notarial Act – Public Form 33 3.5.3. Foreign Language Documents 35 3.6. The Notarial Protocol 35 3.7. Conclusion 36 v CHAPTER 4 37 4 THE ELECTRONIC NOTARY – A CRITIQUE 37 4.1 Electronic Document Notarization 37 4.1.1. TEDIS Group 37 4.1.2. American Bar Association 38 4.1.3. The UK CyberNotary Association 39 4.1.4. HCCH – International Forum of e-Notarization and e-Apostilles 40 4.2 Conclusion 42 CHAPTER 5 45 5. ELECTRONIC NOTARY – NOTARIAL PRACTICE 45 5.1. Introduction 45 5.2. e – Notarization and e – Apostilles 46 5.3. Technology vs Tradition 47 5.3.1. The Notarial Seal 47 5.3.2. Notarial Protocol or Journal of Notarial Acts 50 5.4. Conclusion 50 CHAPTER 6 53 6. ELECTRONIC NOTARY – TECHNOLOGICAL ISSUES 53 6.1. Introduction 53 6.2. IETF - Long Term Archive and Notary Services (LTANS) Working Group 55 6.3. PKI and Certificate Revocation Lists 58 6.4. Long Term Archiving of Notarized Documents and Evidence Record Syntaxes 59 6.5 The Use of Cryptography in Long Term Archives 63 6.6. The Austrian Chamber of Notaries and Siemens CyberDOC 64 6.7. Conclusion 65 CHAPTER 7 67 7. THE ELECTRONIC NOTARY IN POLICY AND LAW 67 7.1. Introduction 67 7.2. The Legislative Position in Australia and New Zealand 67 7.3. The United States 68 7.4. England and Wales 68 7.5. Legislation 70 7.5.1. Electronic Transaction Act (1999) 70 7.5.2. Uniform Electronic Transaction Act (1999) 70 7.5.3. United States Electronic Signatures and National Commerce Act 72 7.6. Conclusion 72 vi CHAPTER 8 75 8. CONCLUSIONS AND FUTURE RESEARCH 75 8.1. Conclusion 75 APPENDIX A 83 APPENDIX B 105 Books and Readings 127 vii viii List of figures Number Page Figure 1 - Example of a 13th Century Notarized Document . 17 Figure 2 – Seal of a Practicing Notary Public 27 Figure 3 - HCCH Apostille Certificate - http://hcch.e-vision.nl/upload/apostille.pdg cited 22 October 2004 30 Figure 4 - HCCH Apostille Certificate http//hcch.e-vision.nl cited 22 October 2004 30 ix x Acknowledgments This research could have not been possible without the assistance I received from many people. I would therefore like to thank the following: Mr Ken Rose – (Deceased) Notary Public, who took time out to introduce me to the world of the Australian notary. Professor Peter Zablud, Director of Notarial Studies, assessor Notarial and Professor Phillip Hamilton, Associate director, Notarial Studies Graduate Diploma in Notarial Practice Practice/Theory, Graduate Diploma in Notarial Practice - Sir Zelman Cowen Centre Victoria University. These gentlemen provided the opportunity to attend a weekend workshop where I gained great insight into what it means to be a notary public in Australia and in particular to Peter who took time out to take my calls. Peter made himself available to take my calls and we spent many hours discussing the technological issues as well as legal issues associated with an “electronic notary service”. Professors Lance Hoffman and Sead Muftic at the Cyber Security Policy and Research Institute, (CSPRI) George Washington University, Mr Randy Sabett Attorney at Law – Vice Chair of American Bar Association Information Security Committee. Prof Gene Spafford and his staff at the Centre for Education and Research in Information Assurance and Security (CERIAS) at Purdue University Lafayette Indiana who all provided valuable input into my research To Mr Richard J. Hansberger, Director of eNotarization National Notary Association of America, and Mr Arshad Noor of StrongAuth, Inc, Members of Ltrans group who xi provided a valuable insight to the working s and the problems faced by Notaries in the United States. To staff members at the office of Master of the Faculties of the Archbishop of Canterbury Westminster, for the assistance and insight into the workings of the office they provided during my visit to London. Finally but not least to the two gentlemen who must have surely been frustrated with the sometimes slow progress of my research , due to my involvement in other projects, but who never the less provided the inspiration to keep going. My special thanks to my two supervisors Professor William Caelli and Dr Adrian McCullagh. xii Glossary “Civil law” has at least three meanings. It may connote an entire legal system, or either of two different bodies of law within a legal system: 1. A legal system derived from Roman law and commonly used in Europe; here the contrast is common law; 2. The set of rules governing relations between persons (either humans or legal personalities such as corporations); here the contrast is public law, especially criminal law; 3. Secular law, as opposed to canon law. “Common-law” - The law of many countries, especially those with a history as English colonies. It is notable for the inclusion of extensive non-statutory law reflecting a consensus of centuries of judgements by working jurists. “Statutory law” is written law (as opposed to oral or customary law) set down by a legislature or other governing authority such as the executive branch of government in response to a perceived need to clarify the functioning of government, improve civil order, answer a public need, to codify existing law, or for an individual or company to obtain special treatment “Notary” a Notary is a “Public” officer whose function it is to: • administer oaths; to attest and certify, by his hand and official seal, certain classes of documents, in order to give them credit and authenticity in foreign jurisdictions; xiii • to take acknowledgments of deeds and other conveyances, and certify the same; and • to perform nominated official acts, chiefly in commercial matters, such as the protesting of notes and bills, the noting of foreign drafts, and marine protests in cases of loss or damage. Black’s Law Dictionary1, “Notarial act” includes any act, matter, or thing, which in Queensland or elsewhere a notary public can attest or verify or otherwise do by or under any Act of Parliament, custom, or otherwise for the purpose of being used in Queensland.
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