On 29 January the Automated and Electric Vehicles Bill completed its scrutiny in the Commons, at report and third reading stages. The AEVB is the third name for legislation in this area; the first was the Modern Transport Bill in the 2016 Queen’s Speech, the title of which then morphed into the Vehicle Technology and Aviation Bill. That Bill made some progress through Parliament during spring 2017 but then lapsed due to the general election in June. Its provisions on the insurance arrangements for automated driving are largely re-adopted and clarified in the current AEVB which now passes to the House of Lords.

In essence, part 1 of the AEVB will, when implemented, require compulsory motor insurance to be extended such that the motor insurer will be legally liable for damage caused by an automated vehicle driving itself. The quid pro quo for this extended liability is that the motor insurer will be given legal rights of recovery against any other person also liable. The Government has structured the legal regime this way in order to achieve the following:

  • to make sure that third parties injured by an automated vehicle driving itself can claim against a motor insurer in the usual way (rather than, say, have to make a product liability claim)
  • to provide the disengaged driver of the automated vehicle with these same rights, since he or she has, in effect, the status of a passenger when the car is driving itself, and
  • to permit motor insurers subsequently to recover against vehicle manufacturers (and software houses and the like) where they have paid claims in the first instance because the vehicle was driving itself.

The Secretary of State for Transport put this is more conversational language, observing during the debate that “...when you drive your car, Mr Deputy Speaker, it is you who is insured, not the vehicle. As a result of the Bill, in future the vehicle will equally be insured.” It might have been more helpful had he added “when driving itself” at the end of his remark, since the AEVB definitely does not bring about anything like a complete change to insurance of the vehicle as opposed to the current law which requires insurance of a person’s use of a vehicle.

An absolutely critical pre-cursor to the operation of the new insurance and liability regime is that insurers obtain ready access to vehicle data in order to establish in which mode the vehicle was operating at the time of an accident. This is not addressed in the Bill, but the House was reminded of it yesterday by Craig Tracey MP, who asked: “…given that the users of automated vehicles have to be able to demonstrate that their vehicle was in fully automated mode in order to exercise their rights under the Bill, what commitments can he give that data confirming the status of the vehicle at the time of the crash will be made available to the insurer?”

Craig MacKinlay MP intervened towards the end of the debate (which lasted for less than two hours) and hinted at significant longer term changes in ownership and use of vehicles that many expect when fully automated cars become a significant part of the UK’s motor fleet: “As we take the inherently illogical human being behind the wheel out of the equation, I wonder what the point will be in the future of maintaining one’s own vehicle - a vehicle that spends 95% of its time completely unused.”

It is worth recalling that the new regime in the Bill is to apply only when the automated vehicle is driving itself. When it is being conventionally driven, existing arrangements will continue to apply (i.e. that the motor insurer is liable for losses caused by the negligent use of a vehicle by an insured person). Thus, the new requirement in the Bill may be seen as an extension to the compulsory cover required by s145 of the Road Traffic Act 1988. In fact, the AEVB will add a new subsection to s145 to make this very clear.

The Bill (and its predecessors) has been widely welcomed in principle across the insurance industry and it appears to have general cross-party support. For these reasons it appears likely that any amendments considered during its imminent passage in the Lords might be much more by way of clarification than attempts to change the proposed insurance regime fundamentally. For example, the concept of an accident “caused by” an automated vehicle might be more fully explored.