1. Automated Vehicles Part 1 of the Automated and Electric Vehicles Act 2018
Tamara Goriely

2. The Law Commissions’ project on automated vehicles
Outline of the Act 2018
Areas of uncertainty
Q&A

3. Three year review Introduction to the project:
The government has asked the Law Commission of England and Wales and the Scottish Law Commission to review the UK’s regulatory framework to enable safe deployment of automated vehicles.
Three year project (March 2018 to March 2021.
Initially focus on safety of passenger vehicles. Next, will look at mobility as a service.

4. The purpose of the 2018 Act
Quick and smooth path to compensation for the injured person
Not allocating final responsibility
Section 5: once the insurance claim has been settled, the insurer can claim against anyone who is liable to the injured party

5. Section 1(1): listed as capable of driving itself
The Secretary of State must prepare… a list of all motor vehicles that—
are in the Secretary of State's opinion designed or adapted to be capable, in at least some circumstances…, of safely driving themselves, and
may lawfully be used when driving themselves, in at least some circumstances…
The Secretary of State must prepare… a list of all motor vehicles that—
are in the Secretary of State's opinion designed or adapted to be capable, in at least some circumstances…, of safely driving themselves, and
may lawfully be used when driving themselves, in at least some circumstances…
operating in a mode in which it is not being controlled, and does not need to be monitored, by an individual
Secretary of State must keep a list of vehicles that are capable, at least in some circumstances, of safely driving themselves.
An “automated vehicle”, for the purposes of the Act, is a vehicle on this list.

6. Section 2(1): Liability if insured
Where-
an accident is caused by an automated vehicle driving itself,
the vehicle is insured at the time of the accident, and
an insured person or any other person suffers damage as a result,
the insurer is liable for that damage.
Rather than requiring insurers to indemnify road users against their own liability, it creates a new form of liability which arises directly on insurers.
Rationale: ensure fast compensation of victims.
The driver’s liability and liability under s 2(1) must be insured under the same policy. This prevents disputes about whether the driver or the automated driving system is to blame, which could delay or hinder access to compensation.
Limits:
Section 3(2): insurer not liable to the person in charge of a vehicle where the accident was wholly due to the person’s negligence in allowing the vehicle to begin driving itself when it was not appropriate to do so.
Section 4(1): the accident arose from software alterations made by the insured which are prohibited under the policy.
Section 4(1): the accident arose from a failure to install safety-critical software updates that the insured knows or ought reasonably to know, are safety critical.
Who takes out insurance?
“the user” – a broad term
If privately owned, probably the owner/registered keeper.
If just hopping in a taxi for five min, you would be a user but would not be expected to take out insurance for the vehicle. Not clear who would be required to insure the vehicle in these circumstances. Perhaps the fleet operator…

7. Section 2(2): Liability where insurance not needed
an accident is caused by an automated vehicle driving itself,
the vehicle is not insured at the time of the accident because it does not need insurance,
a person suffers damage as a result,
the owner of the vehicle is liable.
Not insured AND not required to be insured -> liability on the owner. This is typically vehicles owned by the Crown or public bodies, such as local authorities, the police, the health service.
Not insured BUT required to be insured ->
Criminal offence under s 143(a) RTA 1988
In general, where a driver is uninsured or cannot be traced, the Motor Insurance Bureau steps in as an insurer of last resort. However, for the MIB agreements to apply, there must be a claim against the untraced or uninsured person, which the MIB then pays. This cannot apply to the AEV Act provisions, as under section 2(1), without insurance, the liability does not arise at all.
The government is currently in discussions with the MIB about possible amendments to the agreements to provide cover for victims, should an automated vehicle be “driving itself” while uninsured.

8. Liability if uninsured?
Not insured BUT required to be insured ->
Criminal offence under s 143(a) RTA 1988
In general, where a driver is uninsured or cannot be traced, the Motor Insurance Bureau steps in as an insurer of last resort. However, for the MIB agreements to apply, there must be a claim against the untraced or uninsured person, which the MIB then pays. This cannot apply to the AEV Act provisions, as under section 2(1), without insurance, the liability does not arise at all.
The government is currently in discussions with the MIB about possible amendments to the agreements to provide cover for victims, should an automated vehicle be “driving itself” while uninsured.

9. Five areas of uncertainty
Listed as capable of driving itself
Meaning of causation
Contributory negligence
Limitation period
Secondary claims

10. Listed as capable of driving itself
The Act defines “driving itself” as “operating in a mode in which it is not being controlled, and does not need to be monitored, by an individual”.
Linked to SAE levels 3, 4 and 5?

11. Causation What does ‘caused by’ mean?
Ordinary principles of tort law apply: but for causation and remoteness (Wagon Mound – was the type of damage reasonably foreseeable?).
For example: where a cyclist is so surprised to see an AV that they lose control and run into a pedestrian. AV did not cause the accident. But, if the cyclist had been frightened by an automated vehicle erratically changing lanes, then maybe the accident was at least partly caused by the vehicle, even if it did not touch the cyclist.
Fault-based or strict liability? In principle, the insurer is liable for any accident “caused by an automated vehicle when driving itself” irrespective of fault.
Should this issue be clarified, or left to the courts?
We see merit in leaving matters to the courts, to decide on the facts before them. We cannot foresee the full effect of AVs. The courts have long experience of dealing with causation issues to provide a fair, common-sense outcome.
But understand insurers’ desire for greater certainty, so they can price insurance and avoid lengthy and costly litigation.

12. Contributory negligence
“the amount which would apply to a claim in respect of the accident brought by the injured party against a person other than the insurer or vehicle owner”
Section 3(1): if injured party is contributorily negligent, the amount of the liability is reduced according to the normal principles under the Law Reform (Contributory Negligence) Act 1945 (damages reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage.
Difficulty
The Contrib Neg Act only applies where there is fault by at least two parties. However, under AEVA, the insurer is not at fault at all. The insurer is simply made liable for accidents caused by an automated vehicle driving itself.
Section 3(1): the amount which would apply to a claim in respect of the accident brought by the injured party against a person other than the insurer or vehicle owner.
An imaginary claim
The Contrib Neg Act 1945 has effect “as if the behaviour of the automated vehicle were the fault of the person made liable for the damage” (s 6(3) AEVA 2018).

13. For how long should insurers retain data?
Personal injury: 3 years from date of accident or when the injured person had knowledge of the possibility of a claim (Limitation Act 1980 s11B(2)(b)).
Property damage: 3 years from date of accident (Limitation Act 1980 s11B(2)(a))
Is the existing limitation period suitable, given that manufacturers may have to store large volumes of data for many years in order to defend a claim?
ABI suggests preserving a limited list of data covering 30 seconds before and 15 seconds after the incident, which would be stored for 6 months. Includes time stamp, GPS location, the automated mode and record of any driver intervention.
What if there is no direct collision and ADS does not detect the accident? E.g. AV shops unnecessarily, causing car behind it to stop and a third vehicle runs into the middle car.
Should claimant only be permitted to bring a claim under AEVA if they have notified the police or the insurer about the incident within a set period? If so, how long? Aim: enable insurer to preserve relevant data before it is automatically deleted.
On one hand, the issues are not different from those that arise in any accident claim made at a late stage. The courts have proved themselves capable of sifting the evidence, bearing in mind the credibility of the witnesses.
On the other hand, with AV, insurers are more reliant on computer data and less on human witnesses. So, once data is deleted, difficult for insurer to know what happened at the scene.

14. Secondary claims against manufacturers
Consumer Protection Act 1987
Negligence
Manufacturer’s conduct falls below that of the reasonable manufacturer
Strict liability
Defective product
‘State of the art’ defence
Does not apply to damage:
to business property
to the defective product itself
worth less than £275.
S 5 AEVA: once the insurer has settled their liabilities to the injured party, the insurer may then bring an action against any other person liable to the injured party in respect of the accident.
If AV defective -> insurer claims against manufacturer or retailer
CPA 1987
Defective: the safety of the product is not such as persons generally are entitled to expect. Factors: manner in which the product has been marketed, its get-up, the use of any mark in relation to the product and any instructions and warnings provided.
The simple fact of regulatory approval does not mean it is safe but it is strong evidence (Gee v DePuy [2018] EWHC 1208).
State of the art defence: a producer has a complete defence if it can show that the state of scientific and technical knowledge at the time when it put the product into circulation was not such as to enable the existence of a defect to be discovered.
AV – technology is new – novel and unexpected problems. But if manufacturers are aware of a safety risk, the absence of a means to remove the risk may not be a defence (A v National Blood Authority [2001] 3 All ER 289).
Neg
the claimant is required to prove that the manufacturer’s conduct fell below that of the reasonable manufacturer in the circumstances. The focus is on showing fault by the defendant, rather than on whether the product met the safety standard people are entitled to expect.
Difficult to establish fault with new technology. Not clear what skills are required of a reasonable manufacturer.
Benefit of neg claim over CPA: wide range of damages, can claim for damage to business property, defendant cannot rely on specific defences under CPA.

15. Secondary claims against retailers
Business-to-consumer contracts
Business-to-
business contracts
Consumer Rights Act 2015
Implied term that goods are of satisfactory quality
The term CANNOT be excluded by contract
Sale of Goods Act 1979
The term can be excluded, but only if REASONABLE to do so
Claims against the retailer may be important if a purchaser wishes to claim for damage to the vehicle itself, as this is not covered by the AEVA nor the Consumer Protection Act 1987.
Purchasers have a contractual claim against the business which sold the vehicle to them, if the vehicle is not of satisfactory quality.
Only applies if you have bought the car from a business. Does not apply if bought second-hand from an individual.
satisfactory = standard that a reasonable person would regard as satisfactory, incl safety, public statement about specific characteristics, fit for purpose, durable.
Business-to-consumer: cannot exclude term
Business-to-business: can exclude if reasonable

16. The Road Ahead
The Law Commissions’ preliminary consultation paper on automated vehicles
Chapter 6: Civil liability
Early November
More details about the AEVA 2018 can be found in chapter 6 of our preliminary consultation paper.
Will be published in early November and available at link on screen
Would appreciate your responses to our consultation questions.

17. Q&A