What is an automated vehicle under the AEVB?

An 'automated vehicle' under the AEVB is a vehicle detailed in a list prepared by the Secretary of State that is, in the Secretary of State's opinion, designed or adapted to be capable in at least some circumstances or situations, of safely driving themselves. The list must be published when first prepared and upon each revision.

As a result of these provisions, the AEVB provides certainty to insurers (and the public) who will be able to check if a vehicle is on the list and accordingly know whether the AEVB applies to that vehicle.

What is the AEVB Insurance Model?

The current insurance regime in the UK covers the driver for accidents they cause, not accidents caused by their car operating autonomously.

As the Rt Hon Chris Grayling MP, Secretary of State for Transport stated during parliamentary debate:

'… when you drive your car…, it is you who is insured, not the vehicle. As a result of the Bill, in future the vehicle will equally be insured'.

This highlights the issue that the AEVB attempts to resolve. The new liability scheme only applies to an autonomous vehicle which is capable of driving itself without human oversight for some, or all, of the journey and will only apply to accidents occurring while the vehicle is driving itself.

The AEVB liability scheme aims to:

(a) ensure third parties injured by a CAV can claim against an insurer without having to resort to other legal avenues for compensation (such as through a product liability claim);

(b) extend these rights to the driver of the autonomous vehicle, who while the vehicle's autonomous mode is engaged is essentially a passenger;

(c) allow insurers to have a claim for contributory negligence against 'any other person liable to the injured party in respect of the accident'. This could include parties such as the manufacturer or the designer of the vehicle's software; and

(d) permit an insurer to exclude or limit their liability for an accident occurring as a direct result of:

(i) software alterations prohibited under the policy made by the insured person or with the insured person's knowledge; or

(ii) a failure on behalf of the insured person to install safety-critical software updates that the insured person knows or ought reasonably know are safety-critical.

The carve out in relation to unauthorised alterations or failures to update software is an interesting inclusion. It demonstrates one way in which the law might address private and corporate autonomous vehicle owners who fail to update the vehicle's software or modify it against the guidance of the manufacturer. This is an important consideration, as a failure to update the software in an autonomous vehicle is likely to have much larger implications than the inconvenience that can be experienced from a failure to update the software on other devices, such as smart phones.

Additionally the carve out will have implications for manufacturers. Currently, it only applies to failures to update software where the insured person 'knows or ought reasonably know' that the update was 'safety-critical'. This arguably places a burden on the manufacturer to take reasonable steps to make the owner aware that a software update is 'safety-critical'. The AEVB sets out that a software update will be 'safety-critical' if it would be unsafe to use the vehicle in question without the update being installed.

What is the significance for Australia?

The regulation of the general use of CAVs on public roads is a significant step forward for the UK. It pushes the UK past the current state of play in Australia which, to date, has been focused on the regulation of trials of CAVs (although the National Transport Commission continues to investigate legislative reform options as set out in our alerts of 4 August 2017, 25 October 2017 and 26 October 2017).

If the AEVB passes into law, it will give manufacturers, insurers and potential consumers in the UK confidence that the government is supportive of the introduction of autonomous vehicles. Additionally, it will give road users a significant degree of confidence that if an accident occurs and it is caused by an autonomous vehicle, they will be compensated for damage arising from that accident without having to resort to product liability claims against the manufacturer.

It appears that the AEVB has general cross-party support and is likely to pass the House of Lords with minimal amendment to the fundamental insurance regime proposed in the Bill.

We will keep you updated as the Bill progresses through the UK Parliament.