The era of driverless cars or fully autonomous vehicles is near and will dramatically transform how we drive. The technology is well advanced and we already see automated features built into new cars such as automatic braking, adaptive cruise control and lane-drift prevention. The test driving of fully autonomous vehicles (ie, those which require no human intervention other than setting the destination and starting the system) has been underway for a number of years. It is anticipated that fully autonomous vehicles will be on the market as early as 2020.
This new era of autonomous driving will challenge many industries, perhaps the most significant being the motor insurance industry. Reports say that 90% of accidents are caused by driver error and fully autonomous vehicles will significantly reduce accident frequency. Accidents will undoubtedly continue, but they will have different causes (eg, bad weather, animals running onto the road or failure of in-car technology).
The immediate challenge for the insurance industry is to establish what the role of motor insurance will be in this new era.
Navigating the legal landscape
The existing Irish legislative and regulatory framework for motor insurance in Ireland is driver-centric and needs to adapt for the era of autonomous vehicles. At present, under the Road Traffic Act 1961, driving is defined as 'managing and controlling' a vehicle. This is not appropriate for autonomous vehicles, where the technology and not the driver controls the vehicle. Motor insurance is compulsory in Ireland and drivers must have third-party cover in place as a minimum.
As autonomous vehicles will likely have both manual and computer control, at least in the short term, it is easily foreseeable that both personal motor insurance and product liability insurance may be required. When accidents occur, it will be necessary for insurers to determine whether it was the technology of the autonomous vehicles or the individual driver that was in control. Claims could therefore be made against a driver, autonomous vehicle owner, manufacturer or technology supplier (eg, software designers or programmers). From an injured party's perspective, this could result in protracted and costly litigation in order to secure compensation.
While there is little discussion in relation to autonomous vehicles at present in Ireland, in late 2015 the European Commission established a High Level Group on the Automotive Industry (GEAR 2030) to formulate sector-specific policy recommendations and an action plan for autonomous vehicles on a harmonised basis. In its discussion paper "Roadmap on Highly Autonomous Vehicles", GEAR 2030 outlines how in the short term the legal position for liability in relation to vehicles with higher levels of automation would not be significantly different to those driver-centric provisions presently in place. However, the paper accepts that liability in respect of autonomous vehicles (ie, totally driverless vehicles) requires clarification. Recommendations are expected later in 2017 and the target date for the introduction of legislation is 2030.
What is clear is that the Irish legal landscape must keep pace with this cutting-edge technology and efforts must be made now to consider how best to address the various issues which will arise.
Is new single insurance product the answer?
The motor insurance industry in the United Kingdom has faced these difficult issues head on and has been collaborating with the technology developers in order to fully understand the risks and design appropriate new products. Considerable progress and proposals have been made in a draft Vehicle Technology and Aviation Bill to extend compulsory motor insurance to cover autonomous vehicles when they are operated in automated mode via a single insurance product that would cover an individual driver when driving and the autonomous vehicle when in automated mode.
It remains to be seen what position will be adopted in Ireland. The legal landscape will require adaptation to allow for autonomous vehicles; however, as long as traditional motor vehicles remain on Irish roads, the existing position will need to be retained.
For further information on this topic please contact April McClements or Aoife McCluskey at Matheson by telephone (+353 1 232 2000) or email ([email protected] or [email protected]). The Matheson website can be accessed at www.matheson.com.
