Product safety and liability

Safety and environmental

What are the most relevant automotive-related product compliance safety and environmental regulations, and how are they enforced? Are there specific rules for product recalls?

The UK implements the EU type approval Directive 2007/46 (in the Road Vehicles (Approval) Regulations 2009, as amended (the Approval Regulations)), and Regulations 715/2007 (relating to emissions) (the Emissions Regulations) and (EC) 661/2009 (relating to safety) are directly applicable in the UK. EU Directive 2000/53/EC on vehicle end of life has also been implemented in UK law by secondary legislation.

The Approval Regulations prescribe a series of technical standards (including requirements relating to vehicle emissions that are set out in the Emissions Regulations and requirements relating to vehicle noise) for passenger vehicles and their component parts, and must be met before a vehicle can obtain type approval (unless a relevant exemption applies). The UK type approval authority has powers to withdraw or suspend type approvals where vehicles are found not to conform to the approved type or deny approval where standards are not met. The type approval authority can also suspend type approvals where a vehicle is found to be a serious risk to road safety, or to seriously harm the environment or public health.

Recalls are carried out under Directive 2001/95/EC on general product safety (implemented in the UK by the General Product Safety Regulations 2005), and the UK authorities have also published a Code of Practice on vehicle safety defects and recalls, and a Manufacturer’s Guide to recalls in the automotive sector, which (while not strictly mandatory) are generally regarded as authoritative. A separate Code of Practice, and Guide, exist for recalls in the vehicle aftermarket.

Once a vehicle has been authorised for use on public roads in the UK, drivers must comply with various vehicle safety provisions to ensure that the vehicle is operated in a manner that does not pose danger to the general public (including the requirement for a driver to always be in a position to have full control of the vehicle and full view of the road and traffic ahead, and a motor vehicle to be attended by a person who is licensed to drive it unless the engine is switched off and the parking brake is applied). Most vehicles are required to pass a Ministry of Transport (MOT) test of vehicle safety, roadworthiness and emissions on a regular basis. The MOT rules changed from 20 May 2018, adding new defect types, stricter rules for diesel emissions and exemptions for some vehicles over 40 years old.

Given that the majority of the laws mentioned above find their basis in EU law, the above set of rules could change following Brexit, although, as noted in question 5, the UK government plans that the European Union (Withdrawal) Act will transpose most EU law directly into UK law immediately following Brexit. The UK’s plans for automotive compliance following Brexit will be a key issue for OEMs and other operators in the automotive industry to watch, and get involved with, as negotiations progress.

Product liability and recall

Describe the significance of product liability law, and any key issues specifically relevant to the automotive industry. How relevant are class actions or other consumer litigation in product liability, product recall cases, or other contexts relating to the automotive industry?

Product liability cases in the UK automotive industry are generally brought by consumers under the UK Consumer Protection Act 1987 (implementing the EU Product Liability Directive 85/374/EEC). The impact of Brexit on this EU law-based strict liability regime will need to be closely monitored in the coming months. As noted in question 5, the UK government plans that the European Union (Withdrawal) Act will transpose most EU law directly into UK law immediately following Brexit.

The UK government has also expressed its ambition for the UK to be at the forefront of development, testing and use of driverless cars. The automotive product liability regime in the UK will need to adapt to this new technology, and product liability formed an important part of a major UK government consultation on driverless cars carried out in 2016. On 6 March 2018, the UK government commissioned a detailed review of driving laws over the next three years, including laws on product liability, to ensure that the UK remains one of the best places to develop, test and drive driverless vehicles.

Under the General Data Protection Regulation (GDPR), which came into force on 25 May 2018, cybersecurity will become a more pressing issue for connected or ‘smart’ vehicle manufacturers, which in the event of a data breach resulting in an accident could face dual liability as a ‘producer’ under the Consumer Protection Act 1987, and as a ‘data controller’ under the GDPR.

As noted in question 2, the UK government has published the Automated and Electric Vehicles Bill, which contains new insurance measures in light of advances in vehicle technology. The proposed single, comprehensive motor insurance framework will allow a person who suffers damage in an accident involving a self-driving vehicle with automated mode engaged to have a direct claim against an insurer. Unlike the current third-party motor insurance framework, insured persons in the automated vehicle at the time of the accident will also be covered. The new act received royal assent in July 2018.

The UK government’s Automated and Electric Vehicles Bill is currently being considered by the House of Lords. This makes provision for liability of insurers in the case of accidents involving autonomous vehicles that are insured at the time of the accident, and for liability of vehicle owners in case of accidents involving autonomous vehicles that are not insured at the time of the accident. The Bill is currently at committee stage and may still change before it is enacted.

Product recalls and other corrective actions are an important concern for the automotive industry in the UK. The competent authority (the Driver and Vehicle Standards Agency) is an active regulator, and manufacturers carrying out corrective actions are often subject to ongoing reporting obligations. The Driver and Vehicle Standards Agency has a specific team, the Vehicle Safety Branch, which is responsible for automotive safety issues in the UK. This team is the main contact for all safety defect and recall matters.

There are procedures for group litigation in the UK. Generally, group litigation is not as common in product liability claims in the UK as it is in other jurisdictions (eg, the US), in particular because the UK has an ‘opt-in’ system, and punitive damages are not available in the UK, although group actions are gradually becoming far more regularly used in the UK. Bearing this in mind, companies should be conscious of the growing risk of collective redress - especially in cases where the potential number of claimants, or the value of the individual claims of several potential claimants, is relatively high.