Yesterday the Automated & Electric Vehicles Bill received Royal Assent, becoming an Act of Parliament. As the Bill contains a Commencement Order attached, most sections will need to be enacted by regulation at the behest of the Secretary of State for Transport via statutory instrument.

The Bill’s quick and safe passage through parliament is demonstrative of its cross-party support and a clear statement of intent from the government that the UK is open for business when it comes to the development of AV technologies, especially in light of the fact that a previous iteration fell away when the snap General Election was called in June 2017.

What does the Act cover?

The Act is split into two component parts. Part 1 deals with issues regarding automated vehicles (AVs), specifically changes to the compulsory insurance provisions for motor vehicles to enable AVs to be insured alongside conventional vehicles. Please click here for further details.

The government sees a direct correlation between the development of AV and electric vehicle (EV) technologies, which is why Part 2 of the Act deals with issues regarding EV charging infrastructure.

Lords’ amendments

While Part 1 of the Bill passed through the House of Commons without amendment, the House of Lords proposed changes, firming up section 1 regarding the classification of automated vehicles and introducing a new section 7 requiring the Secretary of State for Transport to report within 2 years of publication of the list of automated vehicles. The report must consider the impact and effectiveness of section 1 regarding classification of vehicles in scope and also the extent to which the provisions of Part 1 of the Bill ensure that appropriate insurance is in place for vehicles that are capable of safely driving themselves.

The Lords also sought to embellish Part 2 of the Bill, replacing references to ‘charging’ with ‘refuelling’, such that the legislation supports the development of hydrogen fuel cell infrastructure in the same way as it does battery cells for EVs. As with Part 1, the Lords also sought to insert a provision requiring the Secretary of State to report on the effectiveness of the rules regarding the development of refuelling infrastructure and to examine the impact on the government’s air quality targets. Other additions relate to the imposition of performance standards to ensure that EV infrastructure is well maintained and does not slip into a state of disrepair such that it impedes consumer use and giving power to locally elected Mayors to decide where EV infrastructure should be located within their city.

These amendments were subsequently accepted by the Commons during ‘ping pong’, the process whereby a Bill passes rapidly back and forth between both houses to agree its final wording.

What does it mean for insurers?

Significantly Part 1 enables motor insurers to begin to develop new products in readiness for AVs coming to market early in the next decade.

It is clearly the government’s intention that notwithstanding the provisions of Part 1 of the Act, motor insurers will work collaboratively with vehicle manufacturers to form bi-lateral arrangements with a view to sharing data and bringing innovative new products and mobility solutions to market, rather than engaging in protracted, costly and potentially multi-jurisdictional product liability litigation.

What next?

The Automated & Electric Vehicles Act is purposefully a narrow piece of legislation and is just one part of a rolling programme of regulation that will be required to ensure the safe and effective deployment of automated vehicle technologies on Britain’s roads.

Earlier this year, the Law Commission embarked on a 3 year review of UK driving laws, looking at necessary changes to existing criminal and civil laws in anticipation of ‘driverless’ vehicles. It is due to issue an initial scoping paper by the end of 2018. Please click here for further details.

In view of the pace of technological development in this area and its strategic commercial importance to the UK government, especially post-Brexit, insurers should expect further consultation on the subject soon.