Driverless Cars: Whose Liability?

Author(s): David Chung
Publish Date: March, 2013

Published: Motor Trader Magazine April 2013

The development of transportation technology is a slow, costly process. The motor vehicles that we use today operate in fundamentally the same way as those first sold to consumers in the early 1900’s. Indeed, only in recent decades has the electric engine developed into a viable substitute for the combustion engine.

The development of the law is a similarly slow process. If not for the ability of Parliament to proactively enact laws, we would have to wait for just the right set of circumstances to arise between disputing parties before the Courts would have an opportunity to make a ruling on an issue thereby making it law. That is not to say that enacting legislation is a swift process: the effect of a statute on the community must be considered and reconsidered over and over again to ensure that there are no unintended side-effects once a law comes into force.

Generally speaking, the law is able to keep up with technology. However, occasionally there are leaps in technological development which are so ground breaking that the law struggles to adapt. A common example is the Internet. It was not long ago that our lives were restricted to our local communities. And then one day we found ourselves socialising and conducting business with others around the world in real-time with essentially a click of a button. The disruptive innovation of the Internet gave rise to a global village in which anything could be achieved and the law did not see it coming. Even now, after two decades of the World Wide Web, there seems to be no fewer unresolved legal issues than there were when we all went online.

On 25 September 2012, Governor Jerry Brown of the State of California in the United States sat down with Google cofounder, Sergey Brin, to sign a bill establishing safety and performance guidelines for autonomous vehicles. The new law permits the operation of driverless vehicles on public roads for testing purposes. California is the third American State to enact legislation facilitating the issuing of road licences to self-driving cars, the other two States being Nevada and Florida. What was recently science fiction is now becoming a reality. How will the law deal with this new challenge?

Google is not the only company developing driverless car technology. General Motors Co., Audi AG, Toyota Motor Corp, Daimler AG and Nissan Motor Co. are among the other players each developing their own systems. Although each system differs from the other in some way, all of them share one common feature: no human input is required.

This new technology poses an interesting question: If a driverless car crashes, who is responsible?

 

Liability Today

Using a simple example, if a person driving a car was to lose control at speed and crash into a tree, we might consider the following parties as being potentially responsible:

  1. the driver (who we will assume is the owner of the car for the sake of this discussion);
  2. the car dealership who sold the car to the driver;
  3. a mechanic who had recently serviced the vehicle; or
  4. the manufacturer of the car (who for this discussion we will assume produces and assembles all of the parts of a vehicle, including the electronics).

There are numerous factors which would be taken into account in order for the Court to determine who is liable. Depending on the circumstances, multiple parties may be liable where more than one party is found to have materially contributed to the incident resulting in the injury or damage. Where multiple parties are culpable, they would share the liability in the proportions determined by the Court.

Who is liable is a question of fact. Some questions which the Court might seek answers to include:

  • How did the car lose control?
  • Was the driver operating the car responsibly in accordance with traffic rules? Perhaps the driver was using his or her mobile phone at the time of the crash.
  • How about environmental factors such as weather conditions?
  • Was there an unexpected obstacle on the road?
  • What type of terrain was the car driving on?
  • Was the car capable of handling that type of terrain?
  • When the driver purchased the car, what did the dealership represent the capabilities of the car to be? If the dealership advised the driver that the car could be used off-road when in fact it could not, then the dealer may be liable for the damage pursuant to one or more consumer guarantees existing under the current Australian Consumer Law.

Other questions might include:

  • What was the physical condition of the car?
  • Had the car been recently serviced?
  • If so, was it serviced properly by the mechanic?
  • If the car malfunctioned, did the mechanic overlook an issue with the car which might have caused the crash?
  • Or was the malfunction the result of a manufacturer’s defect such as a faulty braking system? Under the Australian Consumer Law, manufacturers are also required to compensate those suffering injury or damage as a result of a safety defect in one of their products.

Clearly, each case must be determined having regard to all of the relevant circumstances. To determine liability, the Courts will consider all such circumstances and logically work through the problem to arrive at a decision.

If we fast forward to an age of driverless cars, where all cars on the road are autonomous—how might the assessment of liability change?

 

Liability for Driverless Cars

A self-driving car is controlled by computer software—artificial intelligence designed specifically to operate the car without human input and to deal with traffic conditions and other variables to transport passengers to their desired destinations. One significant hurdle to the introduction of driverless cars is whether people would be willing to place their trust, and their safety, in the hands of computers. The trust and reliance required of passengers to driverless cars is particularly relevant as it is an established principle of law that relationships of trust give rise to duties of care.

The point of a driverless car is to allow people to simply set the destination and then enjoy the ride. The responsibility for the operation and movement of the vehicle lies with the company who manufactured the car and programmed its software. Today’s consumer protection laws would impose an obligation on the manufacturer to compensate any person suffering injury or damage as a result of any safety defect. However, will a manufacturer’s closer connection to the actual movement and operation of a driverless car result in the law placing more onerous obligations on the manufacturer such as a duty to ensure the safety of its customer?

For a conventional car which requires a person to drive, the car manufacturer is removed from the situation. The manufacturer has no control over where the car is driven, or the manner in which it is driven. As long as there is no safety defect in the car, the manufacturer is much more likely to avoid being liable for an accident.

Driverless cars are a different story. There may still be ways in which a car dealership or a mechanic might be responsible for a crash. However, a manufacturer has a much closer connection to the day-to-day operation of the vehicle due to its development of the software which controls its vehicles. In a sense, a manufacturer steps into the shoes of a driver of a conventional car.

To minimise or avoid liability, manufacturers might lobby consumers and their insurers to take on all risk associated with their driverless vehicles as a condition of purchase. Would consumers agree to take on the risk? It does not seem likely, especially if they can instead choose to buy a conventional car and drive it themselves.

Before driverless cars can become widespread, it is critical that an effective legislative framework is implemented so that the issue of liability can be appropriately dealt with before any accidents occur. Taking a reactive approach may result in a substantial loss of life and money.

It is not farfetched to consider that driverless cars may become significantly safer and less costly to operate than conventional cars. The use of self-driving cars may become a social good endorsed or mandated by Government. For example, a law may be introduced requiring all cars to be autonomous, with conventional cars being outlawed altogether. In such circumstances, it would make sense for the Government to intervene in some meaningful way to deal with accidents and the liability of injury and damage. Perhaps a public fund could be established to compensate the victims of accidents involving autonomous cars in the same way that the U.S. Government today maintains the National Vaccine Injury Compensation Program to compensate those found to be injured by certain vaccines.

Whether driverless cars are adopted on a large scale depends on how well car manufacturers, lawmakers and community members are able to work together to develop a workable regulatory system. There are many legal and social issues relating to driverless cars which need to be resolved before we will see any significant changes to private transportation. By discussing the issues, it might be possible to formulate effective laws to accommodate the evolving technology. If this can be achieved, then the transportation revolution may be sooner than we think.

This article has been prepared to provide a general overview of this topic and is not intended to provide, nor does it constitute, legal advice. Bennett & Philp Lawyers is a forward-thinking commercial law firm which specialises in servicing members of the motor trades industry. Contact us now on (07) 3001 2999 and we will work with you to improve your business and minimise your risk.


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