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Transport's technology battlefield

Technology in the transport sector can sometimes feel like being on a battlefield a few centuries ago. You know that the enemy is behind the brow of the hill, you can see small sorties coming forward, but you know that the bulk of their forces are massed, out of sight, waiting to advance. 

We are used to adapting our systems, and indeed our regulation and litigation, to new technologies and societal shifts. However, as our report 'Why transport is key to economic prosperity' reveals, the industry requires that the regulatory framework is flexible, which is particularly important where the direction of travel of transport technology is not yet clear. Automation clearly has a role to play, from cars and warehousing to logistics. The challenge is to bring harmony across jurisdiction in regulation, in a timely fashion, providing certainty for the transport operator. It's no good having to comply with several different regimes using a partially autonomous (level 3) truck driving across Europe. Even in the UK, there is concern that regulations are not keeping pace with technological change. The Government has begun work on this but we don't know when the Vehicle Technology and Aviation Bill will return to the legislative agenda; the Bill also left several questions unanswered. We are keeping our clients informed about this changing regulatory landscape particularly through our offices across EMEA and further afield. 

Automation drives improved utilisation, enhanced performance and at some point in the future will reduce costs.  It also likely to reduce the work force (lorry driver, van driver, warehouse picker, fork lift truck driver, taxi driver) and create a need for those that remain to be more highly skilled - the transition may be bumpy, requiring an early consideration of recruitment and retention practices, employment contracts and advice on restructuring.  Of course the benefits in terms of improved safety on our roads cannot be underestimated and the accessibility of mobility as a service to a wider audience.  

Insurance is vital to ensuring compliance and protection of implementation of a new technology. There are still concerns about the shift from driver-related motor policies to policies based on the risk attached to the vehicle. Volvo is heading towards level 5 fully autonomous vehicles and has stated that it will accept liability for its vehicles operation in autonomous mode. This has not been followed by other OEMs and the need to ensure that the relevant insurance is in place remains key, not just for compliance with legislative requirements, but to protect the employer or operator. DWF is at the forefront of developing the likely implications of autonomy on liability and insurance. Go to our Driverless Economy Hub »

Much of the new technology is reliant on data which brings with it concerns about security, privacy breach and difficulties of accessing what you need to run your business. The significantly increased fines flowing from the GDPR allied to reputational harm must put these high up board agendas. It's important to ask yourself - are you prepared to deal with the aftermath of a crisis?  Certainly, crisis management and cyber security processes should be fully tested and robust and DWF has developed an approach to this in response to growing client demand.  Legislation to mitigate cyber risks is unlikely to develop any time soon - indeed as the GDPR makes clear, the Government's agenda is to protect the individual rather than assist the business that is now managing larger quantities of data. Dealing with present threats such as ransom ware, is critical for transport providers given the time pressures to deliver for customers. Again, you should consider - is your business adequately protected and insured? Are your contracts providing the right level of protection in terms of warranties and indemnities?

How does the UK develop the infrastructure required to support all this technology? It is a sad truth that our publicly funded roads in the UK are not coping with today's demands. So it is difficult to see how the installation and running of the technology, needed to provide smart, connected highways capable of supporting highly autonomous vehicles, can be delivered by any other than the private sector. Will this inhibit the adoption of autonomy on the roads?  We will have to wait and see. 

Finally, if additive manufacturing (3D printing) takes off and the cost reduces, added to highly automated vehicles and robotics, supported by AI - will a truck or train mend itself? It can identify the problem, generate the part, install it, test it, recalibrate and drive off. However, opinions seem to be divided as to whether legislation of AI is the right way to go. Could existing legislation cope? Would new legislation quash innovation? What is certain is that rushing into new all-encompassing legislation rarely has the intended outcome, which is food for thought. Business has a way of adapting, as does the law; the key question is whether you are giving your business the best opportunity to obtain a competitive advantage in the next five to ten years. 

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.

Report: How will transport impact the economy?

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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.