Do you really need all that paper?
Sometimes you do
The way we live our lives and operate our businesses is always changing. Amongst the biggest changes is the move to electronic communication and information. Despite its potential for quick, efficient communication and the reduction in the need for paper and storage, ironically, many people find themselves surrounded by more paper than ever!
Historically, good practice has been to record agreements in some sort of tangible document, a letter, fax or a written agreement and for information to be stored in physical files. Today, emails and other electronic communications are taking the place of letters and faxes.
Electronic files such as PDFs, TIFs and Word files are taking the place of hard copies, and information is being stored electronically rather than on paper.
The natural tendency is to do things the way they have always been done and to rely on existing systems for storing information. Relying on electronic communications and information can, however, make people feel uneasy. How many times have you:
- Scanned and sent a document or a letter electronically and then put the original in the post?
- Emailed but thought – this is important, should I do it by letter?
- Received or sent an email and printed off a hard copy for a physical file?
- Generated a report from your electronic systems, printed it and then filed it?
Do we really need all that paper?
The Electronic Transactions Act 2002 (ETA) was introduced for the express purposes of:
- Reducing uncertainty about the legal effect of information which is in electronic form or is communicated electronically (and the time and place that those communications are sent and received), and
- Providing that certain paper based legal requirements can be met by using electronic technology.
Electronic format now as valid as paper
With a few exceptions, electronic information is now equally as valid as its paper-based equivalent. The Act provides that information can’t be denied legal effect just because it’s in electronic form or is an electronic communication. So, if you sign a paper-based contract and then agree to a variation by e-mail don’t expect that the variation won’t be legally binding just because you haven’t signed a paper copy.
Requirement for things to be in writing
A legal requirement that information be in writing, recorded in writing or given in writing is satisfied by information that is in electronic form if the information is readily accessible so it can be used for subsequent reference.
Some documents are still required to be on paper – notices required to be given to the public; information required to be given in writing either in person or by registered post; notices required to be attached to anything or left or displayed in any place; affidavits, statutory declarations and similar documents; powers of attorney or enduring powers of attorney; wills, codicils or other testamentary instruments; negotiable instruments; warrants or other documents authorising entry onto premises, search or seizure; court documents; some specific statutory requirements, etc.
Legal requirements to store information
The main requirements for keeping records in electronic form under the ETA, whether the records were originally in paper form or in electronic form, are that:
- The integrity of the information contained in the records is maintained (so make sure it is properly backed up), and
- The information is readily accessible so it can be used for subsequent reference.
The ETA enables people to retain information that’s in paper or other non-electronic form by retaining an electronic copy.
If the information is in an e-mail or other electronic communication, you must also keep information that identifies where it was sent from, where it was sent to, when it was sent and when it was received.
Inland Revenue accepts that records can be stored electronically; guidelines on the retention of business records in electronic format are set out in its standard practice statement SPS 13/01