Opinion
Navigating liability: How could autonomous vehicles impact insurance?
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5th Dec 2024
If there was a car accident today with a fully autonomous vehicle being operated in full self-driving mode, what would be the insurance consequences?
Firstly, we are still very far from full automation, with the American Highway Traffic Safety Administration noting that presently we are at level 1 automation, with level 5 being full automation.[1] However, this is not some distant prospect, already Queensland has trialled the response of partial vehicle automation on Brisbane road infrastructure.[2] Austroads also provides a list of all automated vehicle trials in Australia, including automated shuttles in Victoria, Western Australia and South Australia.[3] Whilst the question of the insurance effects of an automated vehicle accident is presently a hypothetical, with a hypothetical answer, it is now a valid question.
Let’s assume this scenario: Freddie is the driver of a vehicle which is on full automation, he is not touching the steering wheel, nor operating the pedals (to be clear, the technology is not yet at this stage of full automation). He approaches a roundabout, with a large hedge next to him limiting his view. Freddie’s vehicle enters the roundabout, but there is already another vehicle, driven by Louise, coming from the right, and the vehicles collide. Let’s assume the cause relates to the automation system not recognising the hazard of Louise’s approaching vehicle. Both Freddie and Louise are badly injured and the vehicles are written off. Louise obviously had right of way. Had Freddie been in control and driving, he would be at fault and Louise would have a CTP claim.
Compulsory Third Party insurance (CTP)
In order to successfully make a personal injury claim under CTP, the injury must be:[4]
- Caused by, through or in connection with a vehicle; and
- A result of one or more of the following:
- the driving of the vehicle;
- collision with or action to avoid collision with the vehicle;
- the vehicle running out of control;
- a defect in the vehicle causing loss of control while it is being driven; and
- Caused wholly or partly by a wrongful act or omission in respect of the vehicle by a person other than the injured person
Firstly, the injury to both was caused by or in connection with a vehicle. This won’t be contentious.
The second element is somewhat trickier.
The driving of the vehicle
Driving is not defined in the Motor Accident Insurance Act 1994 (MAIA). The Transport Operations (Road Use Management – Road Rules) Regulation 2009 does define ‘drive’ as including ‘being in control of’.
In the matter of Suncorp Metway Insurance Limited v Sichter and Ors [2010] QSC 164 the court used the ordinary meaning of driving as being the actual control and management of a vehicle while it is moving. A vehicle moving under full automation, without driver input, can be said to be moving without actual control or management of the vehicle by the driver. The MAIA does not specify that the driving is to be done by ‘a driver’ or even that ‘a person’ has to be the one driving. Is the vehicle not still moving under control and management when in full automation, but by a computer? If not, it would be an unintended consequence that under full automation a driver not having control or management of the vehicle may not be liable for injury caused if there is an accident (ie CTP doesn’t cover).
It is conceivable that the MAIA could apply because the accident is a result of the driving of the vehicle, even though the driving is under the control of the automation system.
Collision with or action to avoid collision with the vehicle
It would seem pretty clear that the injury to Louise (and Freddie for that matter) is as a result of a collision between the vehicles.
The vehicle running out of control
If the vehicle is controlled by a computer under full automation, is the failure of the computer to recognise its surroundings and the hazard a loss of control of the vehicle? The driver engaged automation and that automation failed, but the vehicle was still under the control of the computer. It was not running without influence or input, the computer system (for some reason) failed. It is possible that this scenario is not triggered because the vehicle has not run out of control.
A defect in the vehicle causing loss of control while it is being driven
This touches on three elements: there being a defect with the vehicle, a loss of control, and driving. It is unclear if there has been a defect in the vehicle, but perhaps if the software operating the automation has failed, then it is defective. This would require expert evidence to identify the cause of the system failure.
There may well be a question mark about whether or not there is driving and/or loss of control, as has already been discussed above. Therefore, maybe this scenario is not triggered.
A wrongful act or omission in respect of the vehicle
The third element is the injury must be caused, wholly or partly, by a wrongful act or omission in respect of a vehicle by a person other than the injured person.
The wrongful act or omission is separate to the occurrences which result in injury. Meaning, the wrongful act or omission doesn’t have to be in relation to the driving of the vehicle, collision or avoidance, running out of control of the vehicle or to a defect in the vehicle.[5]
In respect of Freddie, it could well be argued that the wrongful act or omission in respect of his vehicle arises because of the automation software, not because of his own conduct. Where this argument fails is that under current laws a driver of a vehicle must have proper control of the vehicle.[6] Freddie did not have the vehicle under proper control. Therefore, his wrongful act or omission caused the accident.
Assume we had full automation laws that allowed proper control of the vehicle to be under the power of the driver or of an accredited automation system. If that automation system fails, is it still not a wrongful act or omission in respect of the vehicle, by a person other than the injured person – in this case, the manufacturer, if indeed expert evidence identifies a wrongful act or omission in the design or programming of the automation system?
Can Louise bring a CTP claim?
Louise’s injury was caused by or in connection with a vehicle – that is, Freddie’s vehicle. The injury is a result of a collision with his vehicle. It was Freddie’s wrongful act or omission of failing to have control of the vehicle that caused the injury.
In the alternate scenario (full automation legalised), perhaps Louise’s prospects of success will depend on expert evidence that the failure of the automation system was due to a wrongful act or omission in the design or programming of it. A CTP claim may well not succeed otherwise if she is unable to prove a wrongful act or omission in respect of the vehicle by another person.
Can Freddie bring a CTP claim?
Freddie’s injury was caused by or in connection with a vehicle. The injury is a result of a collision with a vehicle, or maybe it can be argued from the vehicle running out of control or due to a defect (though the latter two are perhaps questionable). However, it was Freddie’s wrongful act or omission of failing to have control of the vehicle that caused the injury. Therefore, he would not presently succeed in a CTP claim.
In the alternate scenario, prospects of success will depend on expert evidence that the failure of the automation system was due to a wrongful act or omission in the design or programming of it. If that is the case, then full automation may well lead to CTP insurers being liable for a broader range of accidents, that they are presently not liable for, and premium setting will need to factor in this consideration.
Are there other types of claims?
Whether or not there is a CTP claim, Freddie could perhaps make a public liability claim or claim for breach of the Australian Consumer Law as against:
- The car dealership; or
- The manufacturer of the vehicle; or
- The designer/licensor of the automation software.
Other issues arise in respect of third-party property damage, and damage to Freddie’s vehicle.
Our present road rules and insurance scheme in Queensland does not provide adequate protection and certainty to road users, and insurers, for accidents arising where a fully automated vehicle system fails, causing an accident. We do not yet have the technology for full automation, but it is coming, and so now is the time for our policymakers to ensure our laws and insurance are ready for that time. Our road infrastructure also requires careful planning. The rapid pace of technological advancement is such that our laws and infrastructure need to work in collaboration with, or ahead of, the roll out of such technology. Anything less is a recipe for uncertainty, increased insurance disputes, increased costs of business, and hurts sustainable insurance.
The ALA thanks Greg Spinda for this contribution.
Greg Spinda, Partner at Travis Schultz & Partners, is an Accredited Specialist and Doyles Guide awarded compensation lawyer. Driven by the belief that everyone deserves the straightforward truth, Greg understands the value of having people who believe in their clients and who actively listen to their story. With a Masters in Health Law, Greg specialises in complex injuries and multi-trauma cases, particularly for NDIS and NIISQ participants. However, he enjoys assisting clients through various compensation schemes, no matter their injury. He's also an advocate, serving on committees with the Australian Lawyers Alliance, and working with compensation scheme stakeholders to drive improvements which protect injured individuals.
The views and opinions expressed in this article are the author’s and do not necessarily represent the views and opinions of the Australian Lawyers Alliance (ALA).
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[2] https://cavs.transurban.com/trials/queensland/partial-automation; https://cavs.transurban.com/content/dam/cavs/documents/qld-trials-report.pdf
[5] Evans v Transit Aust P/L & Anor [2000] QCA 512 at [26]; Lawes v Nominal Defendant [2007] QCA 367 at [17] and [41].
[6] Section 297 of the Transport Operations (Road Use Management – Road Rules) Regulation 2009.
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