The Department for Transport has published its response to the consultation on proposals to support advanced driver assistance systems and automated vehicles. The response acknowledges profound changes to the way we travel and details plans to move forward with proposed reforms ‘to secure the UK’s position at the forefront of this change for the development, construction and use of automated vehicle technologies.’ Stratos Gatzouris considers the response and what happens next.

The consultation

The consultation, which Hill Dickinson responded to last September, requested views on how the regulatory and insurance framework should be amended to accommodate advanced driver assistance systems (ADAS) and automated vehicle (AV) technology. The Government has acknowledged that too much regulation at an early stage could stifle technological progress so, in agreement with the majority of respondents, will regulate in waves of reform to meet the developing challenges on the path to driverless cars.

Defining driverless vehicles

The secretary of state will have the power to publish a list that will classify the types of vehicles that are to be regarded as AVs.

A single insurer model

The Government had proposed to extend compulsory motor insurance to include product liability cover for AVs. However, respondents were concerned that elements of product liability law render it unsuitable in the motor insurance context. For example, product liability insurance is optional, it does not cover damage to the product caused by the product, and a claim can only be made in the first 10 years of a product’s lifespan. The proposal would also conflict with the scope of compulsory motor insurance following the Vnuk ruling (please see our article).

The Government has decided that it is not proportionate to make amendments to product liability law to address these concerns until ADAS has developed further. Instead, it will proceed with a single insurer model where the insurer provides cover for accidents both while the vehicle is under driver control, and in automated driving function (ADF). Part VI of Road Traffic Act 1988 will be amended to accommodate this, through the Modern Transport Bill, which the Government intends to introduce in 2017.

If there is an accident when ADF is active, the comprehensive insurer would be obliged to compensate the innocent third party victim as well as the policyholder. However, if an accident results from the policyholder having made unauthorised modifications to the vehicle’s operating system, or failing to install software updates, the insurer will be able to exclude liability to its policyholder but would still be liable to an innocent third party victim, either in the car or outside of it. The insurer will not be able to exclude liability for accidents resulting from hacking.

In terms of passing on responsibility to the vehicle manufacturer, the motor insurer would be expected to recover from them under common and product liability law. However, insurers will have to cover the cost of claims where recovery is not possible, for example where a manufacturer employs a ‘state of the art’ defence i.e. where at the time that the product was in the manufacturer’s control, the state of scientific and technical knowledge was not such that a manufacturer could have been expected to discover the defect.

To avoid satellite litigation, the response indicates that insurers and manufacturers will be expected to agree mechanisms for recovery. The Government considers that the proposed reforms will not prevent manufacturers from providing their own insurance/product liability cover provided that they fit within the framework of the single insurance cover.

Regulatory reform

The Government will also amend the Highway Code and Construction and Use Regulations to accommodate driverless technology:

Highway Code:

  • Rule 150 relating to driver distraction caused by in-vehicle systems;
  • Rule 160 requiring both hands to be on the steering wheel; and
  • Rule 126 relating to stopping distances will need amendment to facilitate platooning, but before any amendments are made there will be trials to ensure that the technology is safe.

The Road Vehicles (Construction and Use) Regulations 1986:

  • Regulation 104 requiring a driver to have full control of a vehicle and full view of the road/traffic ahead;
  • Regulation 107 requiring the driver to switch the engine off when not attending a vehicle;
  • Regulation 110 prohibiting use of hand-held devices whilst driving, to allow for remote control parking; and
  • Regulation 109 prohibiting the driver from seeing directly or by reflection a television set or screen showing moving images although this will not be relaxed until after AV technology has been introduced.

Other matters

The response emphasises the importance of insurers sharing data to deal with AV-related claims. However any data generated will be subject to the international and regulatory framework. Similarly, the Government intends to liaise with international partners to ensure that the global frameworks for road safety and cross-border traffic as envisaged in the 1949 Geneva and 1968 Vienna Conventions on road traffic support provide for connected and automated vehicle (CAV) technologies.

Next steps

The proposal to stagger reform to respond to the technology as it develops is a measured approach. However, the response makes clear that the pathway to driverless cars very much a reality. The Government will now look to identify near-to-market ADAS and include the insurance proposals in the Modern Transport Bill.