horwich farrelly

The Automated and Electric Vehicles Act 2018

July, 30, 2018

The Automated and Electric Vehicles Act 2018 received Royal Assent on 19 July and will come into force fully on a date to be announced.

Part 2 of the legislation is concerned with the provision of an infrastructure to ensure the availability to the public of charging points, how they are to be publicised, and how payment is to be taken (anticipating that ‘smart’ charging will be the norm). Large fuel retailers will be required to provide recharging services, including in major road service areas.

Autonomous car on the road

Part 1 of the Act will be of greater interest to insurers. It will apply to England, Wales and Scotland. It is concerned with motor vehicles designed or adapted to be capable, in at least some circumstances or situations, of safely driving themselves without being monitored, i.e. something which is beyond the capabilities of any vehicle currently for sale or likely to become available on the market in the immediately foreseeable future.

Where an accident is caused by an automated vehicle (AV) when driving itself on a road or other public place in Great Britain, the vehicle is insured at the time of the accident, and any person, including the person in charge of the vehicle (i.e. what we would have once called the driver) suffers damage as a result of the accident, the insurer will be liable for that damage. Property damage is limited under S145(4)(b) Road Traffic Act 1988 to the current figure of £1,200,000 (which applies for collision on or after 31 December 2016).

Where, in the same circumstances, the vehicle is not insured (because it is exempt from compulsory cover) the owner will be liable. This relates, for example, to vehicles owned by a local authority, a police body, a health authority or NHS trust.

The Law Reform (Contributory Negligence) Act 1945 will apply where the accident was to any extent caused or contributed to by the victim of the collision (although the courts will have to grapple all over again with the issue of apportionment when considering the failings of a AV verses the failings of the human such; for instance can it be right to simply apply Baker v Willougby to collisions between an AV and a careless pedestrian?). However, the insurer or owner of an automated vehicle will not be liable to the person in charge of the vehicle where the accident that it caused was wholly due to the person’s negligence in allowing the vehicle to begin driving itself when it was not appropriate to do so.

Insurance cover may become a complex issue where there is evidence of unauthorised software alterations or failure to update software. There could be major disputes as to whether or not the insured party was aware of any such failings where a third-party contractor is involved. It may be anticipated that contribution proceedings will flow against anyone who provides defective software or fails to update software adequately on behalf of the otherwise innocent owner.

Where there are no problems with cover, the insurer may nevertheless have the task of recovering its outlay from the AV manufacturer or designer if a fault in the vehicle caused the accident. The Act introduces a new right of recovery against anyone shown to be at fault (the Civil Liability (Contribution) Act 1978 is much too restrictive – see for example Jubilee Motor Policies v Volvo Truck & Bus [2010] EWHC 3641 (QB) where an RTA insurer simply had no right of recovery against an allegedly negligent vehicle manufacturer). We can see that the courts will have to grapple with exactly when a vehicle manufacturer is to be held liable – certainly the issue of what may currently be deemed to be defective is unlikely to provide a satisfactory solution.

S10A Limitation Act 1980 will provide a special time limit for actions by insurers in respect of automated vehicles. The purpose of this is to provide for a clear time limit which avoids uncertainty arising from differences between existing limitation periods relating to product liability and personal injury.

Interesting times lie ahead from several points of view. First, there are bound to be concerns about the reliability of the software in AVs when they are finally permitted to operate on public roads. How accurately will telematics explain what happened in an accident? On top of this will be the risk from cyber-attack.

Secondly, will human drivers be tempted to seize control of the vehicle in certain circumstances and argue that it was appropriate to do so, when the insurer does not agree that it was? For example, a human driver realises that there are small children playing close to the road on both sides. He takes control of the vehicle and seconds later swerves to avoid a child who has stepped into the road. In doing so he collides with an oncoming car, which suffers damage. Is he insured or could cover be avoided? Is the question not this: if the ‘driver’ simply allows the vehicle to continue in control and a collision occurs, the insurer is liable? If the driver takes control and crashes into the third party vehicle, in the circumstances described arguably he is not negligent, not strictly liable, and the victim may not recover compensation at all.

Thirdly, there will inevitably be a period, of indeterminate length, when both AVs and ‘driven’ vehicles will share the roads. Sorting out liability may be fraught with difficulties, when the decision making of the AV may be limited to braking or accelerating but not taking any other form of evasive action, as in the example above. Is there not an argument that what we have here is the first step on a path to no-fault liability for RTCs? The act imposes a restricted form of strict liability on the part of the insurer; so why stop there?

The Act does not address the issue who pays where an AV crashes and the vehicle simply is not insured. It might be anticipated that the MIB will be liable. However that would require amendment to the relevant agreements the Motor Insurers’ Bureau (MIB) has with the Secretary of State for Transport. Moreover what mechanism will there be (if any) for the MIB to recover its outlay from a vehicle manufacturer in the event that the collision occurred due to no fault on the part of the ‘driver’?

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