Driverless Cars: The potential impact on personal injury claims and the insurance industry

January 15, 2018

Posted by: Ben Pepper


This is the second in a short series of blogs by Josh Hughes, Associate and Head of the Complex Injury team at Bolt Burdon Kemp, and me on the subject of driverless car technology.  Within this blog I will look at the potential impact that driverless cars will have on personal injury claims following road traffic accidents and also upon the insurance industry.

The present

As it stands, if an individual suffers an injury following a collision with, or in, a vehicle, as a result of a driver’s negligence, that individual would be entitled to make a claim for compensation against that driver’s insurance company.

But what happens when the accident is not caused by a negligent driver?  What happens when the negligent driver is replaced with artificial intelligence?  Should liability be attributed to the owner of the driverless car, even though he or she was not actually in control?

Automated vehicle technology (‘AVT’) is developing rapidly and, despite some public concern, driverless cars are expected to improve road safety by eliminating the cause of the vast majority of road traffic collisions – human error.  However, the questions above still require answers so that when collisions do occur, victims are able to access compensation for their injuries and for their financial losses.

The future

During the driverless car testing that has been carried out in the UK to date, drivers have been required to sit in the driving seat in case they need to take back control of the vehicle.  If a collision were to occur whilst the driver was in control, as a result of that driver’s negligence, then a claim could be made against the driver’s insurance company in much the same way as it is now.  But how will claims be made following crashes caused solely by AVT?

Logic would suggest that fault for the accident would shift from the driver to the manufacturer of the automated vehicle.  The applicable legal principles would therefore relate to product liability, as opposed to motor liability.

The Government originally proposed that owners of driverless cars would require a “bolt on” compulsory product liability insurance policy.  The Association of Personal Injury Lawyers (‘APIL’) disagreed with this within their Response to the Government’s consultation paper.

APIL highlighted that section 145 of the Road Traffic Act 1988 already provides a sufficient legal framework by ensuring that all drivers on UK roads be covered by compulsory motor insurance, including those in driverless cars.  However, APIL did suggest that Part 6 of the Road Traffic Act 1988 be amended to clarify that partially or fully automated cars are indeed covered by compulsory motor insurance.  They went on to say that there is no need to add a costly “bolt on” to compulsory insurance in the form of a product liability policy.

I share the view that an injured person should not be required to bring a claim under product liability law.  As APIL have highlighted, product liability legislation can be extremely complicated, requiring substantial resources to investigate and challenge any defences brought.  The supply chain of an automated vehicle, its systems and software is likely to be very complex and as a result, when collisions inevitably occur, this could result in there being a whole new host of potential defendants against which a Claimant may need to prove their case.  This would be an entirely unsatisfactory position for an injured victim to find themselves.

An injured person should be able to bring a claim against the motor insurer in the usual way and be compensated under the normal car insurance policy.  Then, if the well-resourced insurer wishes to recoup damages from the negligent supplier or manufacturer, they should be able to do so.

Recouping costs from the negligent manufacturers could be expensive for insurance companies.  However, it is expected that the introduction of driverless cars will result in fewer accidents and therefore bring insurance premiums down.  There are also likely to be less fraudulent claims as insurers will be able to access data from the automated vehicles to check whether the claims are genuine.

Final comments

The transition to fully driverless cars is likely to take a long time.  I expect that soon after automated vehicles take to the streets, accidents will begin to occur, albeit hopefully fewer and to a lesser severity.

As recommended by APIL, legislation will need to be implemented or at least clarified in order to make sure that injured people can access compensation without having to make unduly complex product liability claims.  The most sensible solution would appear to be an extension to the scope of existing compulsory motor insurance policies to include driverless cars.  The other option would be to dramatically change the law applicable to product liability, which would not only be disproportionate, but it would also place a huge burden on Claimants.

Injured victims must remain at the centre of the claims process.  Insurance companies must not be allowed to complicate matters by deflecting blame onto manufacturers and delaying the progress of claims.  This must remain a matter for the insurer and manufacturer to resolve between themselves in the background to any claim.  This will allow interim payments to flow and a Claimant to focus on their rehabilitation, maximising their recovery.

It is difficult to say exactly how the legal rules for driverless cars will develop over the coming years.  Issues are likely to arise when accidents occur involving both automated and self-driven vehicles.  One thing is for certain, the initial claims involving driverless cars will set some important precedents. 

Ben Pepper is a Solicitor at Bolt Burdon Kemp specialising in Accident claims.  If you would like advice about making a claim on behalf of a loved one, contact him free of charge and in confidence on 020 7288 4815 or at BenPepper@boltburdonkemp.co.uk.  Alternatively, you may complete this form and one of the solicitors in the Accident Claims  team will contact you.  You can find out more about the team.

Posted by: Ben Pepper

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