Legal Update: Autonomous Vehicles: Motor evolution is imminent
Nick Rogers explores the coming changes to insurance that driverless cars will bring
Global analytics provider IHS forecasts that 230,000 autonomous vehicles will be on the road worldwide by 2025, and more than 11 million by 2035, with 20% in Western Europe.
Some time away, but the prospective arrival of even a small number of test vehicles will compel changes to domestic, European Union and international law, and to motor insurance policies.
In July, the UK government announced that trials of driverless vehicles will start on UK roads in January 2015 and that it would begin reviewing the legislative changes required to allow it. Views were sought in August and the Secretary of State for Transport will report on 31 December.
The trials will last 18 to 36 months and the government is simultaneously further researching the concept of ‘platooning’ partially automated heavy goods vehicles on trunk roads.
The ability to obtain insurance will be a decisive factor in general uptake and market penetration, placing the insurance industry in a central role. Obvious risks include technical reliability and cyber security, as well as residual human error, given that ordinary vehicles will continue on the roads too.
A key distinction will exist between vehicles having ‘high automation’ and those with ‘full automation’. Although both will operate without human intervention, the former will have full controls and require a driver to be able to assume control when needed. The latter will be truly ‘driverless’ – if there is an occupant, they will be just a passenger.
Accidents will significantly reduce, but not disappear. New and different levels of risk will attach according to vehicle type and environment, and identification of the standard of care will be challenging, as will establishing a breach of duty. The argument that a driver “lost control” inherently requires (a) a driver and (b) that they had some control. Possibly the argument will become that a driver “failed to regain control” at a key moment.
Deferred comment
The Department for Transport has stated that for ‘high automation’ vehicles it anticipates that “the regime of strict manufacturer liability would continue to apply” but it has deferred comment on full automation.
As to vehicle insurance, and as to testing only, the DfT has stated that high automation vehicles will require insurance under the Road Traffic Act and that “it is anticipated that insurers would offer suitable products, and even if they did not, that manufacturers would be able to self-insure by placing a bond against their liability for third-party injuries”.
Insurers will probably devise products but, unless premiums are acceptable, this “it will be all right on the night” approach from the DfT does gloss over the deterrent effect for early-adopter drivers wanting indemnity protection and the offence of driving without insurance. It also overlooks the implications, absent motor insurance, for a claimant or subrogating motor insurer or the Motor Insurers’ Bureau attempting to pursue recovery from a manufacturer arguing human error rather than concede a systems failure.
In the context of commercial vehicle platooning, the implications of a malfunction in a vehicle or a roadside control system are considerable and are unacceptable to drivers, unions, employers and insurers alike.
While logic dictates that highly automated vehicles should be safe, there is a foreseeable degree of unpredictability inherent in the driver, in that they: intervened unnecessarily; reacted slowly to a warning; responded but still lost control; were unable to take control.
Foreseeability creates a duty of care, so will it be argued that a software designer is liable if the autonomous system is inadequate to minimise these variables?
And what if a better system could have been installed – will that provide a defence for a driver unable to regain control because of a software issue? Or will it become a standard pre-condition of insurance to have been on the specific vehicle system?
As driverless vehicles become a reality, principles of liability and indemnity are receiving more scrutiny. Like the car, legal evolution is imminent.
Nick Rogers, partner, BLM
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