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UK bill to set a precedent for autonomous car legislation

Caroline Coates examines how the Vehicle Technology and Aviation Bill making its way through the UK Parliament could set a precedent for autonomous car legislation across Europe.

This article originally featured in Automotive World Monthly

Earlier this month, Nissan quietly tested its new autonomous cars on public roads across London. The week-long trial, which went unnoticed by many, was the first time anywhere in Europe that the cars have been let loose on a dual carriageway – demonstrating, excitingly, that the technology is nearly ready.

But before self-driving cars become a reality on our roads, the right regulation needs to be in place – particularly around liability. Who’s to blame if a defective vehicle causes a crash, for example? And, more importantly, who should pay for it? All eyes will be on the UK as the Vehicle Technology and Aviation Bill makes its way through Parliament, setting a precedent for autonomous car legislation across Europe. The Bill is certainly a great start, going some way to addressing the issues around self-driving cars insurance and liability, but there remain several important questions that need to be answered.

Covering the cost
Under the Bill, where a crash was caused not by negligence on the part of the driver but by the car itself, the insurer whose policy covers the car will be liable. For the first time, the insurer is liable to compensate its own policyholder for their injuries as well as any injured passenger or indeed the driver of another car involved in the collision. At the same time, the Bill creates a right of recovery for the insurer who has paid out for their insured defective autonomous vehicle. This means it can bring a claim against another driver or car who caused the accident.

But what happens if their own insured car’s defect causes an accident? Whom do they pursue, standing in the shoes of their policyholder? The dealer that sold the car is the obvious choice – but an insurance company would be unable to pursue a recovery in contract if a claim was brought years later when that dealership has gone out of business, for example. The alternative is for the insurer/car owner to go down the product liability route against the vehicle manufacturer – and this is riddled with its own set of complex challenges.

As things stand, under the Consumer Protection Act a product liability claim can be brought against the manufacturer of an autonomous car if a defect in the car or its operating system causes a crash – but only if the claim is brought within ten years of the car being supplied.

While self-driving cars are in their infancy, this doesn’t pose a problem. Jump forward by a decade, however, when these vehicles will be older and potentially with their third or fourth owners, and the insurer seeking reimbursement could be left empty handed.

Meanwhile, manufacturers can refer to the rapid pace of technological change by claiming a ‘state of the art’ defence under the Consumer Protection Act. To qualify, they simply need to show that the vehicle was as good as it could have been and not defective at the time it was supplied, and that the defect has only been detected at a later stage with scientific advances.

Personal responsibility
Secondly, the Bill proposes that an insurer can recover some or even all of the compensation paid out following a crash from their policyholder, if they either made an alteration to the car’s operating system or failed to install necessary updates. In this situation, the policyholder is unlikely to be compensated for their injuries too.

Clearly, vehicles as technologically advanced as these will require multiple updates throughout their operational life. How will those updates be communicated to the owner and/or the car – will it always be wireless? Will a policy require something more than just complying with the manufacturer’s updates? Will we all have to become experts on the latest
version of the software? And what if someone else is using the car for a period of time – they too will fail in a claim for compensation by their insurer if they knowingly ignored a requirement to install an update.

The rationale for this exclusion is fair: an owner or user can’t just operate the car without taking steps to ensure it is safe and expect the insurer to foot the bill if something goes wrong.

Jumping the gun
A final point: this Bill only applies where an accident is caused by an automated vehicle driving itself – a situation that’s still several years away from being a reality on the UK’s roads. In the short term, we will see an increase in sophisticated advanced driver assistance systems (ADAS), where the driver remains in control but is aided by, for example, Autonomous Emergency Braking in times of crisis. But the Bill does nothing to establish liability on the insurer if this technology fails, and the existing rules apply.

Meanwhile, road space will be occupied by a plethora of different vehicles with varying levels of technology – and this presents its own set of challenges. How are drivers and cars expected to behave around each other? Will drivers be able to react quickly enough to take back control of their car, where it is equipped with ADAS?

There’s no doubt that the Vehicle Technology and Aviation Bill is a step in the right direction. But critical details like these will dictate whether the UK becomes a world leader in autonomous cars, or merely joins the back of the queue. Policy makers need to take a step back and think about the impact of the decisions they’re taking now. Only with this careful consideration will all parties be adequately protected as self-driving cars become a reality.

The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Caroline Coates

Partner - Head of Insurance / Executive Partner (Birmingham)

I am Executive Partner of the Birmingham office and I head up the insurance sector for DWF nationally. I specialise in product liability cases, complex employers’ liability and public liability claims for automotive, manufacturing, utility and public sector clients.