July 26 2016 Are you willing to drive an autonomous car? Will it expose you to legal liability? Chuo Sogo Law Office PC | Insurance - Japan Insurance IntroductionReport summaryConcept of damages liability for autonomous driving IntroductionOn June 9 2016 the General Insurance Association of Japan (GIAJ) released its Legal Issues on Autonomous Driving report concerning damages liability in accidents involving autonomous automobiles. The report is based on studies conducted since August 2014 in which the GIAJ discussed and examined damages liability in autonomous driving-related accidents. Due to the ongoing global development and implementation of autonomous driving technologies, issues pertaining to damages liability in accidents and the institutional approaches to protect victims are of considerable importance.The GIAJ report is not legally binding as it was prepared and released by a non-life insurance industry organisation. The report is intended as the non-life insurance industry's early-stage consideration of the above mentioned issues and is helpful for gaining a better understanding of the present state of the Japanese non-life insurance industry.Report summaryLevels of autonomous drivingThe GIAJ report assumes the following levels of autonomous driving:Level 1 – the system:accelerates;steers; orbrakes.Level 2 – the system performs two of the operations listed above. At this level, the responsibility for driving lies with the driver, even when the autonomous driving system is engaged.Level 3 – the system performs all three operations listed above and the driver is engaged in driving only if the system so requests. At this level, the responsibility for driving lies with the system – however, the driver can intervene in the driving process at any time. If the driver intervenes in the driving process, the operation shifts to a manual operation.Level 4 – the system performs all three operations listed above and the driver is never involved in such operations.Damages liability under existing lawThe Japanese compensation scheme adopts the fault liability principles of Article 709 of the Civil Code, which holds that "a person who has intentionally or negligently infringed any right of others, or legally protected [any] interest of others, is liable to compensate for any damages resulting from such infringement".Regarding bodily injuries caused by automobiles, the intent that victim relief under the Automobile Liability Security Act be prioritised over Article 709 of the Civil Code is a remarkable feature compared to other countries.According to Article 3 of the Automobile Liability Security Act, if a person operating an automobile for his or her benefit causes death or bodily injury to any other person through such operation, the automobile operator will be liable to compensate the victim for the damages caused. However, the automobile operator will not liable if it can be proven that:the automobile operator exercised due diligence in operating the automobile;there was an intentional act or negligence by a third party other than the victim or automobile operator; andthe automobile had no structural defect or functional disorder.The protection of victims through the introduction of the automobile operator concept and the imposition of damages liability on such an operator – which is essentially based on a 'liability without fault' principle – is a characteristic feature of the law as the above three conditions are difficult to prove.Concept of damages liability for autonomous driving Level 2At this level, driving can be performed by the autonomous driving system, but a driver is responsible for driving at all times – even when the autonomous driving system is engaged. Therefore, the existing laws governing liability for damages will apply to both bodily injuries and property damage.Level 3At this level, driving is autonomous based on the system and the driver is assumed to be exempt from his or her responsibilities under the Road Traffic Act to a certain degree.With respect to bodily injuries under the Automobile Liability Security Act, it is important that the automobile operator at this level be decided. As driving is autonomous based on the system, the system is considered to be in charge of the operation. However, when the system's function has reached its limit, the driving responsibility is shifted from the system to the driver, and the driver can intervene in the driving process at any time – even when the autonomous driving system is engaged. Therefore, it is possible to argue that the driver is in charge of the operation.Bodily injuries occurring at Level 3 – regardless of whether an accident takes place while the automobile's autonomous driving system is engaged – would be subject to the automobile operator's responsibility provision of the Automobile Liability Security Act.Level 4Automobiles with this level of autonomous driving capability are different from conventional automobiles. The issue of damages liability will need to be discussed after a thorough review of laws and regulations dealing with automobiles, including those that cover:automobile safety standards;user obligations;licensing systems; andcriminal liability.For such a review, it will be necessary to examine:international discussions around autonomous driving;the likelihood of Level 4 automobiles being used in society; andthe requirements necessary to enable autonomous driving systems to achieve a harmonious traffic environment between autonomous and conventional automobiles.For further information on this topic please contact Hironori Nishikino at Chuo Sogo Law Office PC by telephone (+81 3 3539 1877) or email ([email protected]). The Chuo Sogo Law Office PC website can be accessed at www.clo.jp.