UK: Automated And Electric Vehicles Act 2018 Completes Journey And Receives Royal Assent

Last Updated: 27 July 2018
Article by Clyde & Co LLP

Most Read Contributor in UK, November 2018

Amidst the continued testing of autonomous vehicle technology ahead of its impending introduction into everyday life, the Government's key piece of legislation on how these vehicles should be insured, and who is liable in the event of a collision involving an autonomous vehicle, has passed.

The Automated and Electric Vehicles Act ("the Act") received Royal Assent on 20 July 2018.

What does the Act deal with?

  • The Secretary of State is required to prepare, update and publish a list of all vehicles that are designed or adapted to be "capable of safely driving themselves".
  • The 'single insurer' approach is introduced whereby the injured party (including the automated vehicle 'driver') will be able to claim compensation from the insurer of the automated vehicle. In turn, the insurer has a right of recovery from vehicle and software manufacturers.
  • Where an accident is caused by an automated vehicle, insurers will be liable for "death or personal injury" or any other damage – save for damage to the vehicle itself - arising from the collision. This provision covers not only third parties involved in a collision, but also the insured owner of the vehicle in question. Insurers are then entitled to claim against the party responsible for the crash, such as the manufacturer or other driver.
  • The principles of contributory negligence are maintained - specifically excluding insurers' liability where the accident was wholly due to the insured driver's "negligence in allowing the vehicle to begin driving itself when it was not appropriate to do so". When a circumstance is deemed to be 'inappropriate' will likely be left to interpretation within case law.
  • Insurers are also provided with the ability to exclude liability if the accident is found to directly result from the insured installing software beyond that permitted under the policy or failing to update software that the insured knew or "ought reasonably" to have known was safety-critical. It remains to be seen what safeguards manufacturers will place on vehicles to prevent the installation of unauthorised third-party software and/or prevent vehicle owners from ignoring safety-critical updates.

What happens next?

The substantive elements of the Act will be enforced once secondary regulations confirming the date of implementation are passed. However, the passing of the Act is merely one part of the journey to an autonomous future.

  • The Law Commission is currently aiming to publish a scoping paper for consultation before the end of 2018 ahead of a planned and far-reaching review of the UK's legal framework dealing with automated vehicles;
  • There are additional proposals to make exemptions to the Road Vehicles Construction and Use) Regulations 1986 to allow remote control parking using hand held devices, and changes to the Highway Code reaffirming driver responsibility in automated vehicles.
  • There remain important questions in respect of how manufacturers will be mandated to ensure the necessary information is brought to the attention of the driver. It is clear that regulatory intervention will be required in the near future to act as a safeguard to users and to ensure manufacturers provide adequate information. It is clear that vehicles will require updates, both safety-critical and generally. How those updates are to be delivered is unclear, and is particularly important in light of the exclusions of liability permitted by the Act as described above.
  • Without a continuous wi-fi signal, an update may require a manufacturer to recall their cars with a mechanic required to plug in a diagnostic tool and update to the software on the car. However, 'over-the-air' updates could result in vehicles being fitted with 5G data links to allow the automatic download of critical updates.
  • There remains a clear need for the development of an international standardised data sharing and usage agreement for information generated by autonomous vehicles. Issues of data sharing will be fundamental to the developing legal liability position globally.
  • The Automated Driving Insurance Group of the ABI have themselves previously proposed that data should "be recorded in the event of a collision and made available on an equal basis to both manufacturer and insurer such that questions of status of automated systems, extent of driver input and liability can be quickly and impartially assessed."
  • These proposals make clear that data is vital to understanding the risks inherent with autonomous vehicles from both an underwriting and claims perspective. The further regulation concerning what data should be provided to insurers both prior to and following an accident will be vital, and the utilisation of the MIB as a third party clearing house for data might well be a satisfactory solution for interested parties. However, during the debates of the Act it was stated that there would be no benefit to the UK acting unilaterally. It remains unclear at this stage what actions will be taken on an international level to ensure that this regulation is introduced.

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.

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