Canada: From Motorist To Manufacturer: Adjusting To AV Litigation

Last Updated: September 25 2018
Article by Peter Vlaar

In the absence of any human input in the operation of vehicles (level 5),1 drivers are rendered passengers and any liability for causing an accident inevitably shifts from the motorist to the manufacturer; from the person to the product. This does not start only at Level 5 however – we will begin seeing this already in Level 4, Level 3 and even Level 2 autonomous vehicles as they become more popular. The more control relinquished by the driver, the more exposure is drawn to the manufacturer because of the increased likelihood that an accident was the result of the manufacturer's product (for example, erroneous programming code or faulty sensors).

In addressing what that might look like into the future and how an adjuster could handle litigation involving autonomous vehicles – both fully autonomous and semi-autonomous (level 3 and 4), I will employ a thought experiment framed around the real-life example of the Uber-pedestrian accident in Arizona. In March of this year, a self-driving Volvo XC90 SUV was being tested by Uber as part of its self-driving fleet in Arizona when it struck and sadly killed a pedestrian while the autonomous system was fully engaged. This thought experiment will employ similar facts except sometime into the future, in Ontario, the Volvo is owned by an insured, not Uber, and to make things less tragic, the pedestrian is only slightly injured. The other facts are the same – the Volvo is in autonomous mode and the pedestrian crossed the street in a non-designated area wearing dark clothing at night.

Motor vehicle litigation is going to shift to product liability involving manufacturers. However, that does not mean that plaintiffs are going to sue them directly by naming them as defendants. The injured pedestrian, in this experiment, is going to seek to recover from the most closely related party to their loss, which is the owner/operator of the vehicle. By operation of s.192 of the Highway Traffic Act (HTA),

192  (1) The driver of a motor vehicle or street car is liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle or street car on a highway. 2005, c. 31, Sched. 10, s. 2.

Accordingly, absent any changes in the legislation, it will be the defendant's responsibility to bring in the manufacturer by way of third-party claim. Knowing whether and who to bring in by way of third-party claim will be fact-dependent and will likely require the involvement of counsel and an engineer. The first question one should ask when advised of a motor vehicle accident involving an autonomous vehicle or a vehicle involving autonomous features is: did the accident happen in autonomous mode? If the answer to that question is yes, a lawyer should be immediately retained for the following reasons:

  1. Preservation of evidence will be fundamental to a fulsome defence involving autonomous vehicles; choose one who can be available to respond immediately and attend the scene of the accident if necessary to ensure the essential evidence is preserved and obtained and also to prevent others from inappropriately collecting data.

  2. Also the right lawyer can work quickly to put the appropriate team of engineers and investigators in place to conduct any necessary analysis; the benefit of doing so through counsel provides the ability to protect the engineer's report and analysis under litigation privilege, which is an important strategic advantage, especially if the findings are not entirely favourable.

  3. A lawyer can assess and make necessary recommendations with regard to litigation and can put the relevant parties on notice and coordinate global testing of the evidence in a prudent and timely manner to prepare the file for a thorough defence. For instance, it may be determined that it is not the insured's vehicle but a third party vehicle that caused the accident and should be put on notice. Or in the case of connected cars – it may be the municipality that needs to be put on notice because of defective data that was sent from the infrastructure to the car in which case both the municipality and the manufacturer would be put on notice. The question that hangs over that prospect at this moment is whether "data" can be considered a product for the purposes of product liability? One would operate on the assumption that it is but would likely need legislation to clarify.

The three main types of negligence establishing tort liability for damages or injuries caused by defective products are (1) negligent manufacture; (2) negligent design; and (3) failure to warn. It is the obligation of the plaintiff in product liability litigation to prove negligence and they must do so by establishing the following:

  1. the product was defective in that it posed an unreasonable danger or risk of harm to person or property when foreseeably used;
  2. the manufacturer owed a duty of care to the plaintiff with respect to the product;
  3. the manufacturer was negligent in failing to meet the applicable standard of care;
  4. the manufacturer's breach of the standard of care caused or contributed to the defect;
  5. the defect caused or contributed to the plaintiff's damages; and
  6. the plaintiff's damages were reasonably foreseeable.

The nuance in this thought experiment though is that it involves a pedestrian, which in Ontario means that there is a reverse onus on the defendant to prove that the damage did not arise through the negligence or improper conduct of the owner/driver:

Section 193(1) of the HTA reads:

When loss or damage is sustained by any person by reason of a motor vehicle on a highway, the onus of proof that the loss or damage did not arise through the negligence or improper conduct of the owner, driver, lessee or operator of the motor vehicle is upon the owner, driver, lessee or operator of the motor vehicle.

The defendant can rebut this presumption of negligence therefore by producing evidence that they are only partially responsible or not responsible at all for the injury or loss. Such evidence would be likely to come from the wealth of data contained in an insured's vehicle itself which the engineers have analyzed. Evidence such as video data showing the plaintiff crossing at an unmarked place in the road, wearing dark clothing or making a sudden movement into the path of the vehicle, could all be vital pieces of a defence. Or perhaps it is evidence of a failed system whereby a sensor or the software failed to properly identify the pedestrian in time, faulty transmission of data or simple errors in some lines of code. Such evidence would have the double effect of rebutting the presumption in s.192 of the HTA and proving negligence as against the manufacturer in a third party claim.

Once it is established that a manufacturer should be brought into an action, it is important to determine the proper entity to name and whether any suppliers or distributors should be included. Uber's own Volvo was equipped with forward and side-facing cameras, radars, light detection and ranging (LIDAR), navigation sensors as well as computing and data storage units, all of which came from different manufacturers and suppliers. Case law (Hans v. Volvo Trucks North America Inc., 2016 BCSC 1155;  Farro v. Nutone Electrical Ltd. (Ont. C.A.), 1990 CanLii 6775 (ON CA)), shows that manufacturers are liable for the negligence of suppliers of component parts that they installed in the final manufactured product. Thus, it would not be required to name the specific suppliers or entities involved in the component parts of the Volvo, but simply name Volvo itself as a party (e.g. the manufacturer). Often, such component suppliers will enter into private agreements with the manufacturer which include indemnification provisions in favour of the manufacturer in the event of a defect causing damage to the product and to defend and/or indemnify same from any third party claims for loss or damage. The identity of the manufacturer is also an important consideration because some of them have declared that they will accept liability for any motor vehicle accident involving their vehicle in fully autonomous mode at the time of the accident. Volvo was the first to make that announcement, followed by Google and Mercedes and may preclude the need to even commence a claim against them.2

The details of an expert engineer's report with their fulsome analysis and interpretation of the vehicle's data would not only serve to guide whether to pursue a manufacturer but will also serve to inform how best to frame the pleadings in a claim against the manufacturer. In particular, it will inform whether negligent manufacturing, negligent design, and/or failure to warn or all of the above would be alleged.

An inevitable by-product of this shift to product liability litigation is that it will result in longer, more complex and costly litigation. Policymakers in the UK have anticipated that and out of concern for drivers, have introduced new legislation guaranteeing insurance coverage. This legislation is called the Automated Electric Vehicles Act 2018. Currently in the UK, drivers may not be covered when involved in accidents in cars that are engaged in autonomous mode and this legislation extends mandatory coverage to the operator of an automated vehicle both when operated by a human driver and when the vehicle is driving itself. The purpose of this coverage is to ensure that individuals continue to go through auto insurance in order to recover damages following accidents as opposed to the product liability route to ensure that victims are compensated first. It will then be for the indemnifying insurer to subsequently recover from the liable party, such as a manufacturer. This legislation may provide a helpful framework for Ontario and Canada to consider in preparing for the full-scale deployment of autonomous vehicles and if implemented, it would make the timely preservation and collection of evidence all the more important given the likely length of time between the actual loss and involvement of the manufacturer.

While fully autonomous vehicles have not yet arrived, semi-autonomous technology certainly has and they will only be multiplying in number. It is important therefore for adjusters to be aware of the best possible manner and strategy in which to respond to claims involving this technology since it is not a question of whether they will come across their desk but when.

Footnotes

1 For levels of driving automation see Autonomous vs Semi-Autonomous Vehicles: The Liability Distinction, February 2017.
2 Mercedes, Google, Volvo To Accept Liability When Their Autonomous Cars Screw Up

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions