On the Road With Autonomous Vehicles and the Insurance Industry, Issue No. 3

by Nelson Brown & Co.

Autonomous Vehicles and Liability

Autonomous vehicles (AVs) promise to deliver greater safety by significantly reducing accidents caused by driver error. However, AVs will not eliminate accidents, and associated liability issues present a new challenge for the insurance industry. Placing control of a vehicle in the hands of technology will change how liability is assessed. How will the law address liability in this evolving landscape?

AV technology presents the question of who is at fault when an AV is involved in an accident – the AV’s human driver or the technology driving the vehicle? The question of human error versus defective vehicle is not unique to AVs. This issue has existed long before the precursors of fully autonomous vehicles, such as cruise control, emerged. A driver can be liable for an accident for failing to brake to avoid a collision just as an auto manufacturer can be held liable if the vehicle’s brakes do not work properly. GM’s ignition system and Toyota’s sudden acceleration problems are prime examples. AV technology changes who is operating a vehicle. Therefore, it changes the driver error versus defective vehicle dynamic. Currently, a driver is responsible for the safe operation of his vehicle, but can escape or limit liability if he proves that fault lies with the vehicle. When the driver surrenders control to an AV, will primary responsibility for safe operation transfer to the vehicle? What responsibility will the driver retain?

New rules and regulations will set many of the parameters for reasonable care in the operation of an AV, but other rules of the road will need to be developed through tort law. It should be anticipated that AV technology will not completely absolve the driver of any potential for liability. A human operator of an AV should be expected to use reasonable care while operating the vehicle, but the standard for reasonable care will need to be defined. What is unreasonable for a driver now could be reasonable for an operator of an AV. For example, a Florida law banning texting while driving provides an exemption if the vehicle is operated by AV technology. Likewise, new standards for reasonable care in the use of AVs will be developed to address issues created by the new technology. For instance, drivers of AVs likely will remain responsible for monitoring the roadway and will be required to take control of the vehicle on short notice. Standards for what is considered reasonable monitoring and whether a driver assumed control promptly enough are to be determined.

In instances where accidents are caused solely by the autonomous operation of a vehicle, responsibility will primarily lie with the manufacturer of the vehicle or of its components. Existing legal concepts such as negligence and products liability provide a framework for how liability will be imposed. However, the standards to be applied to these concepts will depend upon the circumstances.

Liability claims could be brought under products liability law theories such as manufacturing defect, design defect and failure to warn. Picture an AV on a busy highway when a heavy rainstorm suddenly occurs. In response, the vehicle could be required to turn on its headlights and windshield wipers, decrease speed, stop suddenly as a result of other vehicles, detect wet road conditions and adjust braking accordingly, maneuver in response to other vehicles or notify the human driver to assume control of the vehicle. A software glitch that impairs the AVs’ ability to regulate its speed would give rise to a manufacturing defect claim. A design defect could be found if the vehicle’s sensors are not sufficiently effective in heavy rain. A failure to warn claim could arise if the manufacturer did not provide adequate warnings concerning the driver’s need to pay attention to traffic and other conditions and be prepared to assume control when operating the vehicle in autonomous mode.

Advertising of AVs could also create liability exposure. Statements about safety and the level of driver control needed could give rise to misrepresentation and false advertising claims if statements are false or misleading.

Product recalls are another source of manufacturer liability. There is a high potential for recalls to correct or update software given the AVs’ dependence on software and technology that allows the vehicle to process information and react to surrounding circumstances.

New standards for the liability concepts discussed here could come from various sources. The federal government currently has minimum safety standards for non-AVs, and the National Highway Traffic Safety Administration (NHTSA) is conducting research for establishing safety standards for AVs. Federal safety standards likely will influence how liability is addressed under state tort law. State legislation on the use of AVs already exists in some states and will expand. Ultimately, liability on a case by case basis will be determined by state tort law. Regulations and safety standards imposed by state and federal governments will significantly influence standards on which liability is imposed.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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