The Automated and Electric Vehicles Act 2018 – a framework for future development

The UK's Automated and Electric Vehicles Act 2018 has become law. This new statute sets a framework for the next stages of road transport evolution, without attempting to address the longer term challenges of a driver-free future.

The two areas the Act focuses on are:

  • insurance of automated vehicles
  • charging networks for electric and hydrogen fuelled vehicles.

No gaps in insurance cover

We looked recently at the insurance implications for increasingly automated vehicles. These are very different from the issues currently faced by automotive insurers, with considerations of cyber risk and telematics taking on greater importance. The new Act does not address these new risks in detail. Instead, it sets up a system to make sure that there are no gaps in insurance cover for autonomous vehicles, and a logical route for claims.

A Parliamentary policy background paper explains the thinking:

“The Government believes that answering the insurance questions sooner rather than later will encourage manufacturers to develop transport technology in the United Kingdom with the confidence that they can exploit market opportunities.”

The general scheme is that if an autonomous vehicle causes an accident for any reason, the insurer of the vehicle will normally have to compensate anyone injured or suffering loss. The rules will apply to cars, vans, lorries etc that have been listed as “automated vehicles” by the Department for Transport.

What if an accident happens because of a failure in the vehicle's design or manufacture? The product liability rules mean that a manufacturer would normally be responsible for compensating anyone that is hurt through use of their products. The aim of the Act is to give an injured person, including a non-driving user of the vehicle, a compensation route through the vehicle insurer. But that insurer can then to look to the manufacturer for repayment.  

What about a situation where an accident happens because of a failure to update the vehicle's safety-critical software, or the more extreme situation of active tampering with on-board software? In situations like these a person using the vehicle may find themselves unable to benefit from the insurance policy. They may also have to pay back any damages that the insurer has paid out to others. 

While this appears to work logically under the current model of owner-drivers, we envisage the driverless future involving increasing use of fleet or shared  vehicles, so the question of who takes responsibility for software updating etc becomes more complex. The Act puts the responsibility of installing software updates on “any person whose use of the vehicle is covered by the policy in question”. There could be a large number of different people falling into that category, and the updating responsibility imposed by the Act begins to look onerous. Insurers will need to take care that vehicle operators and users know what their responsibilities are for updating onboard IT.

Improved clean energy networks

The second objective of the Act is to provide a framework in which "ultra low emission vehicles" (ULEVs) can grow. The Act does not itself set out requirements for electric vehicle charging and hydrogen refuelling facilities. Instead it provides the Department for Transport with powers to make regulations aimed at pushing forward the Government's stated objectives to

  • improve the consumer experience of electric vehicle charging infrastructure,
  • ensure provision at key strategic locations like Motorway Service Areas (MSAs), and
  • require charge points to have "smart" capability.

A future-proof framework?

Together these two areas of reform aim to encourage the development and deployment of next generation vehicles without being overly prescriptive as to what the technology will look like. This Act is just a small part of the journey. There is clearly much more to be done in developing the right framework for allowing autonomous vehicles onto the roads. In our view, a key next step is to establish appropriate standards for fall-back safety mechanisms as we move towards greater vehicle autonomy (discussed here) – that question remains unanswered.

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