Self-driving cars and liability law and insurance law

Last month, Het Financieele Dagblad ran the headline that the number of loss events has increased due to the development of automotive technologies. Innovations such as parking sensors and automatic breaks are not as smart as thought, also the repair costs of a (semi) automatic motor vehicle are significantly higher compared to these of a regular motor vehicle. Consequently, insurers of motor vehicles will experience an increase in costs of claims up to an amount of EUR 1,250,000 in the coming years, as research has indicated.

Next to the horror scenario regarding the runaway Tesla, this article in the FD raises the question how we should deal with damages caused by self-driving cars. In this article, I will briefly address this question.

Are self-driving cars already in use?
First of all, the self-driving car doesn’t exist yet, at least not on the public road. The development of technologies with respect to self-driving motor vehicles goes faster and faster, but we will not encounter a “full automation” motor vehicle which doesn’t require a driver on the public road, also this is also not allowed by law (yet).

The self-driving car as we know it, is in fact a semi-autonomous motor vehicle which has been equipped with a number of safety functions. These functions, such as an emergency assist and an adaptive cruise control, assist or warn the driver. Systems like Tesla’s auto pilot system go a step further, as these can intervene/react autonomously. It is expected that it will take decades before we will encounter the fully autonomous motor vehicles on the public road.

What about the damages that could be caused by self-driving cars?
The increase in cost of claims as a result of the rise of the (semi-) autonomous motor vehicle asks for clarity in the field of liability and financial settlement of claims.

Under current Dutch law, a victim has multiple options to recover his damage if the damage was caused with or by a self-driving motor vehicle. That said, the victim does face some obstacles under current legislation. If the victim turns to the driver (or in fact, the underlying WAM-insurer of the driver), he will be required to proof that the driver committed a wrongful act (onrechtmatige daad) towards the victim. However, the question is whether the driver can be accused of a wrongful act, if the damage was caused by a non-functioning system in his motor vehicle. Furthermore, the driver could successfully invoke force majeur (overmacht), leading to the lapse of his liability. For example, if the vehicle’s system was hacked, which resulted in the accident. A victim will have one less option to address his claim, if there are fully autonomous motor vehicles (i.e. without a driver). He will then need to address the producer of the motor vehicle, but faces another obstacle. The producer could defend itself, if it successfully argues that based on the state of the technology, the motor vehicle could not be better or safer.

In conclusion
The obstacles under current legislation are not only out-dated, but also lead to the undesirable situation that technological innovations cause public unrest, and may also hinder further development. For this reason, it is argued that producers should come with commercial solutions and – for example – provide a warranty that if their product causes a loss event, it will fully compensate the victim for the damage. Another option is the establishment of a (European?) fund to which a victim could turn in order to get compensated for his damage. This (European) fund should be financed by producers, insurers and the taxpayer.

In conclusion, with a view to the speed with which the self-driving motor vehicle is now developing, it would be advisable to amend Dutch legislation accordingly. Or at least to ensure that commercial successes that are booked with these developments, also benefits the victims.

For more information contact Martine Bouman.