A key piece of new legislation may help to bring the reality of autonomous vehicles on the roads in the UK a step closer. Julia Marlow, Public Law & Policy Partner, Hogan Lovells and Marc Spurling, Director of Future Mobility Strategy, Aon, discuss the Automated Vehicles Act and the implications for the sector.
What is the AV Act?
The Automated Vehicles Act, which became law in England and Wales on 20 May 2024, provides a legal framework for regulating the use of automated vehicles (AV) on roads and other public places. It creates a process for the authorisation of “self-driving vehicles”, as well as information-gathering and investigatory powers. The Government has said that it paves the way for self-driving vehicles to be on British roads by 2026.
However, says Marc Spurling, Director of Future Mobility Strategy, Aon:
“One of the most interesting aspects of the Act is the way in which it tackles the question of responsibility for safety, as well as liability when things go wrong”. Julia Marlow, Public Law & Policy Partner, Hogan Lovells, agrees: “At the moment, the driver of a vehicle has full responsibility for driving safely and following the rules of the road. The Act introduces a fundamental change by shifting that responsibility away from drivers to others involved in developing self-driving vehicles and facilitating their use on our roads”.
How does the AV Act classify self-driving entities and who is affected?
The Act achieves this shift by identifying, and ascribing responsibility and liability, to the different entities involved in controlling a self-driving vehicle. For example, the Act defines a person who is in a self-driving vehicle, and in a position to take control of it, but not actually controlling it, as a “user-in-charge”.
“The Act specifically provides that a “user-in-charge” is not liable for the manner of the vehicle’s driving,” says Marlow, “unless the vehicle has issued a “transition demand” (which effectively tells that person to take over the driving, usually due to adverse conditions) and the “transition period” (which is the time that the vehicle allows for that person to take back control) has ended.”
The Act identifies the “authorised self-driving entity”, likely to be the vehicle manufacturer, operator or software developer, as the person responsible for ensuring that the vehicle travels to an acceptably safe standard. “That represents a huge change compared to the system that we have in place today,” says Spurling. More broadly, the Act creates new offences, such as the criminal offence of falsely marketing a vehicle as having autonomous capability if it is not an authorised self-driving vehicle. By identifying the key legal actors who will share responsibility and liability, however, the UK is helping to create clarity for the mobility players in this ecosystem and wider society.
“Complexity and uncertainty can stifle investment and innovation, and, in the insurance sector, it can restrict or reduce the flow of capital. This new legislation should be a catalyst for stakeholders from across the value chain to come together to plan and solve for AV deployment at scale,” says Spurling.
Defining the responsibilities of different parties and the link to potential liability helps the insurance industry to shape suitable coverage terms to protect the assets of the AV companies, users of the services, and the wider public and road users who will interact with the technology.
Who’s liable for what?
Autonomous mobility offers the tantalising prospect of safer roads, but the insurance sector will naturally consider what happens if something goes wrong, where the following potential liability scenarios could apply:
- Not following the rules of the road:
Liability for failing to follow road rules may be attributed to local authorities, manufacturers, operators, and the user-in-charge of autonomous vehicles.
Under the Act, local authorities in England must provide essential information on roads such as speed limits, bus lanes, and no entry signs to enable the manufacturer to programme the vehicle to operate safely and legally. If a road rule is not followed because the local authority failed to provide the relevant information, it follows that the local authority would be held liable.
If violations occur due to the manufacturer or software developer’s failure properly to code the data provided, or because of a fault of the operator overseeing a vehicle without a user-in-charge, liability shifts to them.
The user-in-charge generally bears no liability if the vehicle is in self-driving mode as long as they are not acting recklessly, such as by refusing to resume manual control of the vehicle in response to a transition demand. This immunity does not extend to ‘non-driving’ failures, such as failing to insure their vehicle or pay a congestion charge.
- Injury to other road users:
Manufacturers and software developers will be responsible if their vehicles cause injury to road users because of a design or programming flaw. Operators will be responsible if any injury is caused while a no-user-in-charge vehicle is under their operation. - Injury to passengers:
The rules on liability for injuries to passengers are very similar as those for other road users. Liability might also arise in circumstances where the manufacturer has withheld or provided misleading information on the vehicle’s safety features, directly leading to the passenger’s injury. A user-in-charge would still be responsible for ensuring that safety precautions (like fastening children’s seatbelts and securing heavy loads) are taken. - Damage to property:
Manufacturers and software developers are responsible for adapting vehicles to specific conditions and locations. If their failure to do so results in property damage, they will be held liable. Similarly, if an operator’s oversight leads to damage of the property, the operator will be liable.
Implications for the AV sector
The Act starts to give clarity on the circumstances when a user-in-charge could be responsible, which helps to plan for the risks associated with Level 3 autonomous features. Responsibility mainly arises from interference or inappropriate use of the self-driving features. However, a crucial aspect is the failure to retake control of the vehicle after a transition demand is made and the transition period expires, putting responsibility back on a human driver.
The legislation also provides more certainty on the role of the driving technology suggesting it should be treated like an ordinary competent driver – this infers liability will be based on all the circumstances and the actions taken by the self-driving technology and not strict liability.
“This framework helps organisations like Aon identify the protection gap and avoid conflicting insurance policies. It shows the movement away from a traditional “motor risk” policy towards a combination of general, product and software liability,” says Spurling, “something we are already doing with clients (such as Oxa in the UK) where we have co-developed AV specific embedded insurance products to sit with the autonomous technology.”
What happens next?
The Act has now received Royal Assent. “That normally brings an Act of Parliament into force”, says Marlow “but, in this case, the Act provides that it will only come into force when the Secretary of State makes separate regulations. Moreover, much of the detail as to how this new regime will work is still to be decided, and will be contained in further, detailed regulations that are yet to be drafted and may be subject to future consultation.”
Underpinning all this will be how insurance should be adapted to provide certainty to the public that suitable coverage will protect them in using and being part of an autonomous driving future. It also means giving certainty to owners, operators and technology providers.
For the insurance industry it means reducing the potential for policy overlap and conflict in insurance terms and coverage, and designing products that fit the needs of future operating models.
Become involved in shaping the future regulations
Advisors and participants in the mobility sector have an important role in working collaboratively to share ideas and contribute to the design of regulation and insurance.
“There are things we can do now to help contribute to the way the regulations are drafted,” says Marlow. These actions include:
- engaging with Government about how the detail should work, including through the formal consultation processes, but also through informal means such as working with industry bodies that help to create robust standards to support deployment; and
- challenging brokers and insurers to show how they will develop insurance products that are pragmatic, adaptable and fit for purpose.
“In the UK, the government has taken a lead in defining some of the fundamental concepts that will support autonomous driving at scale,” says Marlow, with Spurling adding “As professional services firms we have a unique opportunity to help shape pragmatic and affordable regulatory and insurance solutions that will unlock all of the positive benefits that self-driving technology brings”.
The information contained in this document is intended to assist readers and is for general guidance only.
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