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Published 27 October 2017
The eagerly anticipated Automated & Electric Vehicles Bill had its first reading in the House of Commons last week. Click here to read.
Amongst other things, the Bill that was announced in the Queen’s Speech in June sets out a new compulsory insurance framework for ‘out of loop’ automated driving – Society of Automotive Engineers (SAE) Levels 4 and 5, paving the way for the introduction of highly automated vehicles on Britain’s roads by 2020/21.
The main components of Part 1 of the Bill, which relates to insurance for automated vehicles, are as follows:
System of classification of automated vehicles – The Secretary of State for Transport is required to publish and keep up to date a list of motor vehicles that require an automated vehicle (AV) policy;
A ‘single policy’ approach – Motor liability insurers are required to deal with all claims where the vehicle is operating in AV mode at the time of an incident, and where the vehicle was at fault. This duty extends to the ‘disengaged’ driver of the automated vehicle, who is effectively treated as a third party. It further extends to situations where the automated vehicle is hacked by a third party. This approach ensures simplicity for consumers, and ensures a swift route to compensation for innocent victims of road traffic collisions;
Right to exclude or limit liability – Insurers have the right to limit or exclude their liability where the policyholder or person in control has failed to keep the AV’s software up to date, or if unauthorised modifications have been made. However, in order to exclude or limit liability in respect of an insured person who is not the policyholder, that person must have knowledge of the fact that the vehicle was operating with out of date software, or that an unauthorised modification had been made;
Right of recovery – Following on from the ‘single policy’ approach to AV insurance, insurers are to be given a statutory right of recovery against the manufacturer of the automated vehicle, pursuant to established product liability laws, thus preserving "state of art" defence. It is anticipated that the supply chain for automated vehicles will be complex, including both hardware and software manufacturers. Insurers will need to work with vehicle manufacturers to ensure efficient processes for recoveries. In order to achieve this and to avoid unnecessary frictional costs, a post-collision data sharing agreement is imperative.
The Bill is largely unchanged from the Vehicle Technology & Aviation Bill, which fell away at the end of the last parliamentary session with the snap General Election, but has been strengthened in places, further to stakeholder feedback:
Definition of ‘automated vehicle’ – This has been tightened to ensure that it covers only truly autonomous vehicles (Level 4 and 5), rather than where the driver is expected to retain control;
Software updates – Reference to the policyholder / insured person’s requirement to ensure ‘software updates to the operating system’ has been reinforced to include all ‘safety critical software updates’, as it was felt that specific reference to ‘operating system’ was too narrowly defined, and could exclude certain aspects of software;
Limitation – The schedule to the Bill also makes provision for the necessary amendments to the Limitation Act 1980 to ensure that victims of road traffic collisions caused by AVs have 3 years from the date of accident or knowledge to bring a claim, in keeping with the insurance framework for conventional vehicles.
For further information, please contact Peter Allchorne.
+44 (0) 117 918 2275
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