Monday 8th February 2016
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We’re getting nearer and nearer to a time when self driving cars will be on the road and we may well end up buying them before too long. Cars will have some amount of autonomy by 2020 on the motorway but these cars aren’t expected to be in cities until 2025 due to the complexity of enabling the cars to navigate urban environments.  One big issue about autonomous cars that is now starting to be raised is what are the legal implications for these new cars?  What happens about liability?  A new group called the New Automated Driving Insurer Group has been formed to tackle issues regarding autonomous cars, liability and road traffic laws. Eleven of the big motor insurance firms form part of the group and the Association of British Insurers (ABI) and Thatcham Research are leading it. The insurance companies include Direct Line, Admiral, Allianz, AXA and Aviva. The group has been formed to address the legal issues of autonomous vehicles on public roads and help to establish fault in the event of accidents.


Insurers state that the majority of accidents are due to human error, the ABI sate that 94% of road accidents are because of human mistakes.  So going forward accident rates are expected to significantly drop which could mean falling premiums.  Thatcham Research estimate that premiums could fall by 50% by 2025 and by 80% by 2040.  Obviously, it will be much harder to blame human error in autonomous cars but will the onus fall on manufacturers or software developers? Manufacturers may start to offer their own insurance; especially if the onus is going to fall on them in the future and insurance firms will lose customers.  The ABI are saying “Contrary to what some people might expect, insurers are not standing in the way of this development but actively looking to support progress and innovation”. But are they actually more concerned with their market being killed off and safeguarding their own bottom lines?

They may have very good reason to be concerned. Volvo president Hakan Samuelsson has said that Volvo would accept full liability for all its self driving cars when they are used in autonomous mode. Google have said that they will accept liability if it is found that their autonomous driving software causes crashes.  But what happens if a major design flaw is uncovered will manufacturers be willing to pay out on major design defect lawsuits? This could lead to recalls and compensation claims escalating and end up being very very expensive for manufacturers.

At the moment it is assumed that all fully autonomous cars will retain a manual override which allows drivers to regain control of the car which could still mean that the driver can be held liable in an accident. Also, the driver has to set the controls for what the car does and they may make mistakes doing this, unless autonomous features will have an override function.

Legal issues are already causing problems as many car manufacturers are complaining that the different forms of legislation across Europe are making it hard to bring self driving cars to market. Samuelsson has said that Europe has “suffered to some extent by having a patchwork of rules and regulation” in regards to the testing of autonomous vehicles. Ulrich Hackenberg, formerly, Head of Technology at Audi said legislation is “by far” the biggest obstacle in bringing a fully autonomous car to market.

In the UK the government has promised to amend national legislation by next year and they have said they will make sure they address the particular issue of liability. Clearly, the technology used, the role of the human driver and individual driving scenarios are all factors that will need to be considered.  Legislation will need to take all of these into account when deciding what new regulations need to be put in place, especially in terms of liability.  The ABI said: “We want to work out what the [insurance] industry’s position will be when the government wants to consult on this”.  It might well be that they want to avoid insuring drivers who are held liable when the manufacturer or software provider are really at fault.  But then manufacturers and software providers could bring out their own insurance policies and include drivers in these.  Which would mean that the insurance industry have no position in the market!  At the moment insurers are blaming cash for crash scams on rising premiums, but autonomous cars would render such crashes as impossible.  What excuse could insurers have then for raising premiums?