News Non-Life04 Jul 2018

Australia:Insurance laws running behind autonomous cars

| 04 Jul 2018

With 5G wireless networks poised to go live around the world next year, Australian law is seriously lagging behind the rapid pace of technological change, warns insurance and health law firm, Barry.Nilsson.

In a discussion paper titled “The Rise of Driverless Vehicles: Who’s in control?”, the law firm comments on the rise of driverless vehicles and the need to properly manage the risks they pose to consumers.

According to the 2018 KPMG Autonomous Vehicles Readiness Index, Australia ranks 14th out of 20 countries in terms of progress and capacity. The introduction of 5G technology is expected to greatly improve data speeds and internet connections, enabling the proliferation of self-driving cars.

Barry.Nilsson. insurance and health principal Henry Silvester said many aspects of the law will be affected by the onset of driverless cars including road rules, Australian Design Rules, common law (who is negligent in a collision of a driverless vehicle?) as well as state, territory and federal legislation (including testing, licensing, offences, compulsory third party (CTP) schemes, product liability, consumers laws, data and privacy protections).

Mr Silvester said while research and investment in driverless vehicles had been increasing exponentially over the last decade, Australia was only just now inviting submissions for possible national legislation. “There is a lot to be done by governments and the private sector before people can be reassured as to the benefits of driverless vehicles,” said Mr Silvester. “In Australia, governments across jurisdictions need to ensure consistency in the regulatory framework, as any uncertainty will likely stifle innovation and act as a disincentive to the introduction of automated vehicles in Australia.

Whole new business model

“From an insurance perspective, a whole new business model needs to be considered if the driverless vehicle lives up to the promise of removing 90% of collisions.

“Insurers need to contribute to the current government debate about regulation of automated vehicles with a balance between managing risk and encouraging innovation. “We must not lose sight of the simple yet complex feature which underpins the driverless vehicle – computer code.

“This enables the myriad of sources of information – from lasers to cameras from radar to satellites – to be processed to make life and decisions for us. How will the vehicle respond?

“If the vehicle had to choose between killing two children crossing the road and killing the passenger, what does it do?”

Barry.Nilsson. suggests the following key options:

  • Government no fault scheme and manufacturer insurance. A no fault statutory scheme for all losses arising from accidents caused by the automated component of the vehicle. The government obtains financial contribution from manufacturers and suppliers. Where the driver is at fault, existing state based laws continue to apply.
  • Owners of vehicles pay a levy on registration of vehicles to fund a no fault statutory scheme for all losses arising from accidents.
  • Redefine the ‘legal entity’ to include the automated component of the vehicle itself – this approach allows this entity to be deemed at fault (where no driver involved), bypassing manufacturers and all other entities that potentially may have valid defences to liability through existing product liability, contract and negligence law.
  • Compensation for personal injury and property damage to be paid from a community fund contributed to by some or all of government, manufacturers, suppliers and consumers.


 

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