The 2016 Queen’s Speech included a “Modern Transport Bill” which was intended to set out the compulsory arrangements for insuring automated driving on UK roads. This title has been shelved and today the Vehicle Technology and Aviation Bill was introduced in Parliament to address this issue.
As expected, and following the thrust of the policy set out after full consultation, the Bill extends the idea of compulsory motor insurance to include automated driving.
This pragmatic approach offers a single insurer solution for policyholders, for insurers and – perhaps most importantly – for anyone injured by an automated vehicle.
In effect, the Bill makes the insurer something of a proxy defendant for the vehicle manufacturer, meaning that injured people can continue to claim against a motor insurer and will not face having to make a product liability claim against the car manufacturer. The regime will be completed by giving the insurer a new statutory right of recovery against the manufacturer. This is clearly summarised in the Explanatory Notes which accompany the Bill:
“[it] extends compulsory motor vehicle insurance to cover the use of automated vehicles in automated mode, so that victims (including the ‘driver’) of an accident caused by a fault in the automated vehicle itself will be covered by compulsory insurance in place on the vehicle. The insurer would be initially liable to pay compensation to the innocent victim, including to the innocent driver who had handed control to the vehicle. The insurer then has the right to recover costs from the liable party under existing common and product law.”
BLM was very closely involved in the Government consultation before the Bill was published. We pointed out the problems of the initial Government proposal based on a product liability model for consumer claims.
The force of our argument was recognised in the Government response paper issued last month (January 2017): BLM Law, who represent a number of insurers, noted specifically that: ‘Current product liability law and insurance practice have inherent restrictions which would not easily enable the underlying policy objectives in respect of motor accidents to be met.’
As a result of the restrictions in product liability law and practice which make it unsuitable as consumer/claimant-facing elements of compulsory motor insurance for automated vehicles (AVs), the Government said last month that:
“Instead, we now propose to supplement the compulsory motor insurance (Part VI of the Road Traffic Act 1988) to include the use of AVs, and establish a single insurer model, where an insurer covers both the driver’s use of the vehicle and the AV technology.”
It is this single insurer model that Part 1 of the Vehicle Technology and Aviation Bill published today will bring to life. We expect that the passage of the Bill through Parliament will include a further stage at which stakeholders will be able to give evidence to MPs on the issues involved and we look forward to taking part in that.
The Bill may take several months to complete all of its Parliamentary stages and we’ll be monitoring developments as it progresses.
Once that has been completed, the commencement of the new insurance regime will still be some way off and the attention will turn to updating other elements of the regulatory regime necessary for automated driving in the UK, notably matters such as technical type approval of the technology and protocols or other arrangements for sharing vehicle related data.