The government recently responded to a consultation on driverless cars. Stuart Young, partner at Gowling WLG, explains the scope of the consultation and considers the government response.

Original news

Driverless cars can significantly reduce delays, DfT reports, LNB News 06/01/2017 65

A new study has shown that driverless cars could significantly reduce delays in the future, the Department for Transport (DfT)

DfT has reported. DfT found that delays and traffic flow improved as the proportion of automated vehicles (AVs) increased above specific levels. Alongside this study, the government has also published its response to a consultation on insurance for driverless cars.

What areas did the initial consultation cover?

The Department for Transport (DfT) and the Centre for Connected and Autonomous Vehicles (CCAV) carried out a consultation on proposals for advanced driver assistance systems (ADAS) and automated vehicle technologies (AVT) from 11 July 2016 to 9 September 2016. There were 428 responses from individuals and organisations. Among the organisational responses were different entities including insurance bodies, law firms, road safety groups, manufacturers and automotive representative groups.

The government proposals covered three related but distinct areas:

  • regulatory reform-clarifying the general approach to regulatory reform by suggesting a rolling programme of reform to support the introduction of near to market ADAS and AVT
  • insurance-making amendments to primary legislation (such as the Road Traffic Act 1988 (RTA 1988)) to extend compulsory insurance for autonomous vehicles (AVs) to include product liability, alongside more detailed insurance proposals concerning manufacturer's defences to product liability, unforeseeable defects (the 'state of the art' defence), public sector liability and liability in cases of hacking, and
  • Highway Code-providing guidance for drivers about the safe and appropriate use of new ADAS features including remote parking, motorway autopilot and separation distances for vehicles driving in platoon

On 6 January 2017, the DfT issued the government response, covered in more detail below.

What was the government's decision?

The response largely restated the government's initial proposals which received broad support. The government did make a change to its view on the compulsory motor insurance framework in the light of feedback from the automotive and insurance industries and law firms.

Looking at each consultation area in turn:

  • regulatory reform-there was support for a rolling programme of reform with a focus on near to market technologies. The DfT stated that this would help to facilitate the introduction of innovative technologies in a safe, agile and evidence-based manner for the benefit of UK consumers and businesses
  • insurance-the DfT changed its recommendation so that compulsory motor vehicle insurance would have a single insurer model. The proposal is now that, where an AV causes a crash in automated mode, the victim (driver, passenger or other person) would have a direct right of recovery against the motor insurer and the motor insurer, in turn, would have a right of recovery against the responsible party to the extent there is a liability under existing laws, including product liability laws. The government hopes this single insurer model will encourage consumer confidence and the adoption of AVT, and
  • Highway Code-the government proposed guidance on Highway Code rules concerning traditional driving requirements (avoiding distraction, driving with both hands on the wheel and observing separation distances) and on the Road Vehicles (Construction and Use) Regulations 1986, SI 1986/1078 (position of the driver, switching off the engine of unattended vehicles and prohibitions on the use of handheld mobile devices). These were generally approved in the consultation and the DfT will continue to develop policy in this area and consult on a specific set of regulations

While the government is taking a cautious approach, we at Gowling WLG share concerns within the industry that the focus on near-to-market technology might inhibit the development of future technologies and the adoption of highly and fully automated AVs. In particular, we believe that the DfT ought to set out now the regulatory structure that will apply to the software (algorithms) that will, in effect, control AVs. Our white paper on this topic makes specific recommendations including the creation of a regulatory body to clarify rules and responsibilities now to ensure innovators in the industry can properly plan vehicles and systems for the years to come.

What are the next steps and when can we expect to see proposed legislation?

In relation to the insurance proposals, the government's proposals for reform will be reflected in the Modern Transport Bill.

The Modern Transport Bill was mentioned in the Queen's Speech in May 2016 and there have been a number of consultations since then, including this one related to ADAS and AVs. The Bill is not yet before Parliament but is generally expected to be published in early 2017.

In relation to the changes not requiring primary legislation (Highway Code and the Road Vehicles (Construction and Use)

Regulations 1986) the DfT is proposing to consult on the specific amendment proposals although no timetable is yet set.

What are the particular challenges of driverless cars faced by the UK motor vehicle insurance model and how can these be overcome?

In some countries the motor insurance model is to attach insurance to the vehicle itself but in the UK the motor insurance model is based on insuring the driver of the vehicle. So, what happens when the vehicle is capable of driving itself and has an accident during automated mode? Although a manufacturer of the AV might be liable to compensate an innocent victim in such a case, there is a worry that compensation would not be quick because:

  • there would be no clear route to compensation
  • it might not be clear who controlled the car
  • innocent third parties might not be covered
  • drivers might also be outside of the coverage

The DfT proposal is to supplement the compulsory motor insurance (RTA 1988, Pt VI) to include the use of AVs, and establish a single insurer model, where an insurer covers both the driver's use of the vehicle and the AVT. That way the driver is covered both when they are driving and when they have activated the autonomous features.

In this model the insurer is, in effect, taking on the liability which would have been the responsibility of the manufacturer.

Consequently the insurer will have a right of recovery against the manufacturer. The DfT hopes that the relationship between the insurance and the manufacturer communities will rapidly mature and that, with multiple incidents and enhanced data capture in accidents, the attribution of liability will be quickly resolved between insurer and manufacturer.

There was, however, some resistance on the part of manufacturers to this single insurance model and a view that existing product liability law is sufficient.

There is a genuine belief that AVs will deliver safety benefits but those benefits will not be gained if there is low take-up of AVT. It is important to clarify the liability regime in order to bolster public confidence in AVs and specifically in ensuring that members of the public do not feel that the introduction of AVs will put them in greater danger or cut off legitimate routes to compensation. In the UK in 2015, human error was involved in 85.7% of all reported road incidents-the safety dividend in removing human error from such incidents would be enormous and the DfT is fulfilling its function in ensuring that the legal infrastructure supports a move towards AVs and a safer environment.

How could the Highway Code and the Road Vehicles (Construction and Use) Regulations 1986 be affected by driverless cars?

In this area the proposals are much more specific.

Highway Code:

  • rule 150-updating this rule that requires that drivers 'MUST exercise proper control of your vehicle at all times'. This will need to reflect, in the short term, motorway assist and remote control parking and, in due course, systems that allow the driver to be out-of-the-loop
  • rule 160-the requirement to 'drive with both hands on the wheel' will need attention for the same reasons
  • rule 126-this sets down a minimum distance between vehicles by reference to at least a two-second gap.

This will require updating to allow for platooning technology in which the gaps between vehicles are likely to be much less than two seconds. A majority of respondents to the consultation were against immediate amendment and the DfT has now proposed a series of controlled platooning trials in the near future to inform its thinking in this area

Road Vehicles (Construction and Use) Regulations 1986:

  • the DfT is not aware of any regulations prohibiting the use of motorway assist systems as they require the driver to remain in-the-loop
  • reg 104 requires a driver to be in a position to have full control of the vehicle and full view of the road and traffic ahead-clarification would be given here to control by hand-held device without being in the driver's seat
  • reg 107 requires a driver to switch off the engine when not attending the vehicle-again, attendance could be via a hand-held device
  • reg 109 requires that a driver must not be in a position to see a television set or similar. Views were sought on relaxing this either for specific users or on the adoption of AV technology. A large number of respondents including safety groups thought that this regulation should not be amended at this time
  • reg 110 prohibits the use of hand-held mobile communications devices while driving-the DfT has proposed to amend this to allow remote control parking via a hand-held device

What concerns have been identified regarding a data sharing framework?

It is clear that AVs and the infrastructure that supports AVs will develop and use a great deal of data. We have issued a white paper on this topic to address some of the concerns around privacy and commercialisation of that data. The regulatory infrastructure will need to be updated to reflect a wider view of essential sharing than is currently contemplated by the EU General Data Protection Regulation (GDPR) in order to ensure that vehicles, people and the infrastructure can communicate effectively without an inordinate number of consent notices.

The government has recognised that there may need to be some specific regulations made in relation to connected AVs and it is developing evidence around this area. It is also participating in international groups, recognising that there will need to be a transnational approach taken to data protection.

Are there any other important points to note from this consultation?

Yes. In the course of the consultation, other points were raised:

  • there was some appetite to review the whole of the compulsory motor insurance framework. Although not taken up at this stage, we believe that change in ownership models and the introduction of Mobility as a Service (known under the acronym 'MaaS') will put a lot of pressure on the existing and proposed insurance models. That is particularly so if individual owners and individual drivers are not a significant feature then vehicle fleets might become self-insured by large operators in the absence of owner-drivers
  • no provision was made in the consultation paper for employer liability but the DfT stated that it would liaise with other parts of government to clarify
  • the DfT suggested that it would maintain a register identifying vehicles with AVT features and that register would form the basis for the single insurance model
  • cycling groups and motorcycling groups were also keen to ensure that the regulatory programme took into account the needs of vulnerable road users-the DfT agreed

This article was first published on Lexis®PSL on 25 January 2017. Click for a free trial of Lexis®PSL.

Interviewed by Alex Heshmaty.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.