- An overview of Part I of the Automated and Electric Vehicles Act 2018, which is intended to fill the gap in civil liability law highlighted by the rise of automated vehicles such as driverless cars.
Part I of the Automated and Electric Vehicles Act 2018 (AEVA 2018) represents the most radical reform to the regulatory framework of compulsory motor insurance for 88 years. It is intended to address a gap in our civil liability law made manifest by developments in vehicle automation. This government is keen to facilitate this technology that promises to transform our lives in the future.
In 2017, the chancellor of the exchequer stated that the government intended these reforms to get driverless cars on our roads by 2021; much depends upon what is meant by ‘driverless’.
Third-party motor insurance was made compulsory under the Road Traffic Act 1930. The objective was, and remains, to guarantee that motor accident victims receive their award, regardless of the defendant’s ability to satisfy a judgment. Its provisions survive in a recognisable but much altered form within Part VI of the Road Traffic Act 1988 (RTA 1988). One of this scheme’s many shortcomings is that s 145 RTA 1988, which defines the scope of compulsory third-party cover, is that it only requires the assured’s personal liability to be indemnified.
Where AEVA 2018 applies, it revises the compulsory motor insurance scheme to embrace:
- product liability;
- first-party claims; and
- strict liability.
Overview of Part I of AEVA 2018
Part I of AEVA 2018 both supplements and amends RTA 1988. Its salient features are as follows.
A new direct right of action
Section 2(1) of AEVA 2018 fixes motor insurers with a new statutory liability to compensate victims of accidents ‘caused by an automated vehicle when driving itself on a road or other public place in Great Britain’. The same minimum level of property damage cover applies here as under s 145(4)(b) RTA 1988 (currently £1.2m).
Section 2(2) imposes a similar liability on vehicle owners exempted from compulsory insurance under s 144 RTA 1988: this applies to the Crown and certain self-insuring public bodies listed there.
Section 2 co-exists with the insurer’s liability under s 151 RTA 1988 to meet an unsatisfied judgment against an assured for a s 145 RTA 1988 liability, as well as the direct right of action conferred by reg 3 of The European Communities (Rights against Insurers) Regulations 2002 (SI 2002/3061).
A new class of product liability
Section 2(1) effectively coins a new subcategory of product liability. It is one that only applies where at the time of the accident (a) the vehicle ‘is insured’, and (b) it was ‘caused’ by one of a class of ‘automated vehicles’ that have been listed by the Secretary of State for Transport as meeting the criteria set out in s 1 and (c) whilst it was ‘driving itself’ lawfully in a public place.
Section 1 requires the minister to maintain a list of all motor vehicles that are, ‘in [his] opinion, designed or adapted to be capable, in at least some circumstances or situations, of safely driving themselves’, and which ‘may lawfully be used when driving themselves… on roads or other public places in Great Britain’.
Section 8 (1)(a) provides that ‘a vehicle is “driving itself” if it is operating in a mode in which it is not being controlled, and does not need to be monitored, by an individual’.
AEVA 2018’s definition of ‘automated vehicle’ corresponds most clearly with Levels 4 and 5 of the Society of American Engineers (SAE) classification of the different stages of vehicle automation. The SAE’s are internationally recognised industry standards. At Level 4, a vehicle possesses complete driverless functionality in certain specific operating environments only; not everywhere. It retains a capacity for human dynamic control when driven outside these parameters. At Level 5, the vehicle’s autonomy is so advanced that can safely ‘drive itself’ anywhere a normal vehicle could lawfully go; dispensing with the need for a person in charge.
The 2018 Act is less clear on whether SAE Level 3 automation qualifies. In common with Level 4, its driverless functionality is restricted to certain contexts. However, unlike Level 4, the driver must remain vigilant and ready to assume dynamic control of the vehicle if requested by the automated system. On the face of it, this passive availability falls short of the active monitoring contemplated by s 8(1)(a). However, during the progress of the Bill, the transport minister indicated this legislative intention: ‘…the Bill does not cover conditionally automated (broadly equivalent to Level 3) vehicles’. It is unfortunate that s 8 does not clearly indicate this.
The ‘automated vehicle’ classification seems to depend on four principal factors:
- First, the degree to which the automated systems possess the innate technical capacity to operate safely, without human control or supervision of the vehicle’s dynamic driving function.
- Second, the environmental context in which a specific type of vehicle will be deployed.
- Third, conformity with the Road Vehicles (Construction and Use) Regulations 1986 (SI 1986/1078), and also with international conventions and regulations agreed under the auspices of the UN Economic Commission for Europe (UNECE), as well as domestic and international vehicle type approval.
- Finally, the minister’s discretion conferred under s 1.
Regulation 8 of the 1968 UNECE
Convention on Road Traffic currently requires every vehicle to have a driver who ‘is able at all times to control it’. This has been amended recently to facilitate, in principle, certain automated vehicles systems, provided they comply with certain regulations and safety standards (that have yet to be devised).
These technical, environmental and legal criteria are variable and interrelated. For example, a less advanced level of automation might be sufficiently safe if confined to a zone of operation or to tasks that present an acceptably low risk to the public. Also, some vehicles might find their full technical potential curtailed by operation of law, such as where a vehicle with an SAE Level 3 capacity is subjected to the current regulatory framework that applies to Level 2.
First party cover
Another major break with precedent is that AEVA 2018, in contrast to s 151 RTA 1988, extends the insurer’s s 2 liability to embrace an ‘insured person’.
Section 2’s liability provisions are restricted to accidents in public places in Great Britain; private land is excluded by implication.
What to expect
It seems plausible to assume that vehicles equipped with automation at SAE Levels 3 and 4 will be type approved and licensed on our roads long before those with full SAE Level 5 autonomy. According to some experts, it could be decades before manufacturers can achieve complete and ubiquitous driverless autonomy.
Present levels of automation
Prototypes excepted, we have only achieved SAE Level 2 automation so far in the UK. This applies to vehicles equipped with speed and lane control systems, autonomous emergency braking and self-parking functions. The driver must always retain overall control of the driving task, constantly monitoring the automated systems; ready to take the initiative and to intervene as necessary. These systems merely augment the driver’s task.
In December 2017, the government announced plans to amend the Highway Code and the Construction and Use Regulations to permit remote parking, highway lane assist technology and advanced driver assist systems, provided they are supervised by the driver. This remains SAE Level 2 technology.
The insurer’s liability under s 2(1) is not absolute but the permitted exclusions and statutory defences are few and strictly circumscribed.
Section 3(2) provides a complete defence to a s 2 claim by a ‘person in charge’ where (i) the vehicle was inappropriately set to drive in autonomous mode and (ii) the accident was ‘wholly due’ to that person’s negligence in doing so.
Section 3(1) of AEVA 2018 enables a s 2 insurer to invoke the Law Reform (Contributory Negligence) Act 1945.
Unauthorised exclusions prohibited
Another innovation of AEVA 2018 is that instead of specifying that certain policy exclusions and restrictions of insurer liability are nullified against third-party claimants (with the implication that all others are permitted, as with s 148 RTA 1988), it does the opposite. Section 2(6) imposes a blanket prohibition, save to the extent expressly permitted by s 4 (see below).
Section 4(1) of AEVA 2018 allows an insurer to limit or exclude its s 2 liability (but only to its assured) where the accident is the direct result of prohibited software alterations made by the assured or by the latter’s failure to install safety-critical software updates. This permitted exclusion is qualified further where an assured victim is not a policyholder: here the insurer can only exclude or limit its liability where that individual made unauthorised software modifications which, at the time of the accident, that person knew were prohibited under the policy, s 4(2).
Section 4(4) also permits insurers to provide for recoupment of their outlay in settling a s 2 claim from an assured where that person has made prohibited software alterations or failed to install safety-critical software updates.
Section 2(3) excludes damage to the automated vehicle itself and certain goods and property from the remit of s 2(1).
Section 5 of AEVA 2018 confers a statutory right on s 2 insurers and derogated owners of recoupment from any other persons liable for the accident.
Paragraphs 8 to 18 of the Schedule make various statutory amendments elsewhere, including incidental changes to RTA 1988. It inserts a new s 10A to the Limitation Act 1980 that sets a two-year limitation period for contribution proceedings. Also, a new s 11B sets a three-year limitation period that runs from the date of the accident or (where the claimant has been injured) the date of actual or presumed knowledge. Paragraph 16 extends the courts discretion to disapply the limitation period under s 33 for personal injury claims.
A step in the right direction
Section 2(1) ensures that if an accident is ‘caused’ by an insured vehicle listed by the minister as an ‘automated vehicle’, while ‘driving itself’, then a party suffering injury or other loss, including its erstwhile driver, can claim directly against the vehicle’s UK motor insurer, using familiar procedures. The claimant is unlikely to have to explain precisely how or why the vehicle malfunctioned, as the ratio in Ide v ATB Sales Ltd  EWCA Civ 424,  All ER (D) 374 (Apr) seems apposite here.
The motor insurance industry has a collective expertise in vetting and settling motor claims with reasonable efficiency and promptness. It also possesses the expertise and resources to enable it to bring highly technical subrogated claims against manufacturers responsible for producing vehicles that turn out to be unsafe. The industry is also well placed to reduce its overall exposure by negotiating recoupment protocols with the manufacturers direct. This could have the beneficial effect of rewarding safe design and good aftercare, by incentivising consumers to purchase models that attract low premiums.
AEVA 2018 confers important and tangible benefits that anticipate future developments in automated vehicle technology. Unfortunately, it has some shortcomings. These are considered in Part 2.
© Istockphoto/Andrey Suslov
In the first part of a special series on road traffic accident reform, Nicholas Bevan reports on the challenges posed by automated vehicles