Will paperless processes kill off cheques?

With so many processes moving online during the COVID-19 pandemic, could paperwork, cheques and ‘wet-ink’ signatures be on their way out for good?

Paperless probate

Even pre-COVID, the Court and Tribunals Services (HMCTS) were making changes to move into the ‘digital age’ by going paperless.

As of 18 May 2020, the more formal and wordy paper statements used when applying for probate were scrapped. A relatively big shake-up for this area!

The new, downloadable standardised form means the court’s IT systems can work toward eventually reading it all digitally. A computer can, in theory, pick up a discrepancy quicker than an eye.

You can also now apply for probate online. Paper forms still exist, but you’re encouraged to go digital if you can. Simple applications are catered for online currently. More complex or involved arrangements – some trusts, for instance – still need paper.

Probate hasn’t ‘gone paperless’ yet, but it’s certainly on its way there. At the moment, you’ll still need to use paper forms if:

• You want someone to apply on your behalf as attorney
• There are people under 18 entitled to part of the estate
• There is no Will, and more than one person wants to apply for probate

Delays expected in processing probate

Like temporary closures for roadworks, we should anticipate a temporary slowing down of probate application turnaround times to ease in the new system. That’s without taking COVID-19 into account. ‘Lockdown’ has seen probate applications fall by 50% as paperwork has remained stuck in safes and offices whilst lawyers work remotely.

Usual estimated volumes of probate applications are around 170,000 a year. Add to this an anticipated pending influx of probate applications to administer the estates of many of the lives tragically lost to COVID-19, that means there will be a lot of catching up to do.

HMCTS confirms it has drafted in staff (previously on court-hearing duties) and is considering further recruitment. Time will tell what the knock-on the effect will be, but we should be prepared for lengthy delays with little to no opportunity to expedite.

Signatures

During the COVID-10 crisis there has been an increase in the use of electronic signatures, as covered an earlier blog.

All parties are seeing the benefits which this can bring in terms of speed, reducing paperwork and postage costs. It seems likely that many of the special measures which have been brought in during lockdown will continue to be used once restrictions have been lifted.

Cheques

With the rise of online banking, and with banks’ high street branches open less, and each cheque costing a bank circa £1 to process and not immediately clearing funds, surely cheques must be on the way out.

In some areas though, cheques are still widely used. This is especially the case in the probate and succession areas of law where things have stubbornly remained paper-heavy.

There are now signs that this might be changing. HMRC is certainly trying to handle less paper, and no longer accepts inheritance tax payments via cheques (and for refunds that it issues).

In other countries, the question of the virus transmission risks associated with using cheques has been raised during the pandemic.  Some of New Zealand’s banking groups – BNZ, ANZ and Westpac – will be phasing out cheques altogether in 2021, accelerated by COVID-19. Kiwibank went “cheque-free”, as its website informed customers, as early as February 2020. ANZ thought that <1% of its (circa 9 million) customers still used cheques.

It remains to be seen whether the UK will see a widespread acceleration in this model. Undoubtedly, there is a generation that still uses – perhaps relies on – them. And some charities have expressed concerns that donations could decrease in a cheque-free world.

It’s still too soon to say if the increase in paperless processes which has taken place during the coronavirus crisis will kill off cheques, but it has certainly dealt them a serious blow. Time will tell, as the saying goes!