Preventing claims – Witnessing signatures

The following summarizes Witnessing a signature? Stop. Read this first. Insurance Issues: Risk Management, Winter, 2013.

There are some legal services that seem very simple and straightforward – after all, how hard can it be to witness a signature (or two)? Unfortunately, these are potential minefields. Why? Because people signing legal documents often need legal advice. So if you are about to witness a signature on a real property transfer form, mortgage or discharge, power of attorney, co-ownership agreement, release of judgment or CPL, or any other document with legal consequences, read on.

For information on independent legal advice, see Giving independent legal advice? Stop. Read this first.

The most frequent reports of claims and potential claims in this area arise from real property transactions involving family members. However, lawyers also report claims in relation to other transactions. The common thread is that the lawyer believes that the person understands the document and wants to sign. Unfortunately – and as the examples given from Lawyers Insurance Fund (LIF) claim files show – when matters later unravel, the lawyer may be targeted. Keep safe. Read and adopt the risk management tips that follow.

To help manage the risk, follow these tips (read more for details and real-life scenarios from our claim files):  

1. Ask questions to satisfy yourself that your client understands the document and its legal effect.

2. Ask more questions to determine if the document actually achieves what your client wants.

3. Caution your client about possible unintended consequences, and confirm it in writing.

4. Fraudsters are out there. Know and meet your identification obligations.

5. If you are dealing with more than one party, be very, very careful.

6. If a party is elderly or vulnerable, be careful about capacity and undue influence.

8. If you simply witness a signature and give no legal advice, protect yourself.

9. Know and meet your officer certification obligations.

See also: Independent legal advice