Recent changes to the Highway Code provide clues as to the autonomous vehicle legal framework’s direction of travel

• United Kingdom

• Commercial litigation
• Litigation and dispute management

29-07-2022

What could once only be seen in science fiction films, will soon become a reality as the UK continues to develop a legislative framework for the introduction of autonomous vehicles (AV), but what does this mean for manufacturers and software developers in relation to product liability and outsourcing arrangements?

Following the UK Government’s announcement in April 2021 that fully AV would be permitted on British roads, and the increase in the number of manufacturers developing AV, the Government has set out draft amendments to the Highway Code in order to prepare for AV. The proposed amendments to the Highway Code further develop the existing AV legal framework – for example, a key piece of legislation already on the books is the Automated and Electrical Vehicles Act 2018 (2018 Act). More recently, in January 2022, the Law Commission of England and Wales and the Scottish Law Commission published a joint report (Joint Report)  providing recommendations for the safe usage of AV which recommends the introduction of a new Automated Vehicles Act. This act distinguishes between two types of vehicle; one being a “user-in-charge” vehicle, where the vehicle has a “self-driving ADS feature” but requires a user-in-charge (vehicles of the nature anticipated by the proposed amendments to the Highway Code) and the other, a vehicle with No User-In-Charge (NUIC) would be one that does not allow a driver to take control. In relation to vehicles with NUIC features the vehicle will be overseen by a licensed NUIC operator who will be required to have “oversight of the vehicle” which will include responding to alerts from the vehicle if it encounters a problem.

The Joint Report still comprises a set of recommendations yet to be adopted by the Government. However, the proposed changes to the Highway Code provide a strong indication that some of what has been proposed by the Joint Report will eventually be put on a statutory footing.

User liability

When considering user-in-charge vehicles, the Joint Report recommends that there be a clear allocation of responsibility and liability between the user and manufacturer. Put simply, the user will not be responsible for any loss or damage resulting from an accident if the AV’s autonomous mode is sufficiently engaged. The proposed changes to the Highway Code appear to adopt this approach, even stating that users “do not need to pay attention to the road” while the vehicle is driving itself, and users may view content through the vehicle’s built-in infotainment screen.

The proposed amendments to the Highway Code however also include a provision that the user would have to “always be able and ready to take control” when prompted by the vehicle, and on this basis, sleeping, being in a passenger seat, or being on a handheld device would remain prohibited. Therefore, perhaps somewhat paradoxically, the Highway Code’s proposed changes mean that a user is able to watch television on a built-in display screen while the vehicle is in autonomous mode, but the same user would be unable to respond to a text or e-mail on their mobile phone.

As anticipated there is also a requirement to “follow the manufacturer’s instructions about when and how to use the self-driving function safely” which fits in with existing consumer protection legislation in relation to product liability.

Product liability

How does all of this impact on product liability?

Under the Consumer Protection Act 1987 (1987 Act) a product is defective if it is not as safe as persons are generally entitled to expect, taking into account the purpose for which the product has been marketed, any instructions for use or warnings, and what might reasonably be expected to be done with the product at the time when the product was supplied. In light of the proposed changes to the Highway Code and the Joint Report’s proposal for new legislation, the obvious question is how liability will be split between manufacturers, users, and software developers.

Where injury or damage occurs as a result of the AV driving itself, section 2 of the 2018 Act gives the claimant direct recourse against the insurer of the at-fault AV. This is a consumer friendly provision intended to ensure that victims receive swift justice. The bad news for manufacturers and their suppliers further down the supply chain (such as software developers), is that under section 5 of the 2018 Act, insurers are able to bring an indemnity claim against the party who is “responsible for [the] accident”. 

The Joint Report flags an area of uncertainty that will either need to be addressed in due course by statute or the courts. AV are incredibly sophisticated and involve an array of radars, sensors, software, on-board cameras and light detection and ranging systems which all give rise to potential product liability exposure. Whilst the black box on the vehicle is designed to identify the exact cause of an accident or fault there is still likely to remain a grey area where there is question as to whether it is software or the hardware that has caused the fault when the car is in self-driving mode.

As noted by the Joint Report, the 1987 Act was not written with software in mind – “There is considerable uncertainty over how far the [1987] Act applies to over-the-air software updates, provided without a physical medium. 654 Consultees also raised other problems with the [1987] Act. Where algorithms are opaque it may be difficult to show either that the software was defective or that it caused the incident”.

The consumer-orientated Joint Report notes that, due to section 2 of the 2018 Act, manufacturers’ product liability would not play a significant role in compensating victims, and so the report did not consider in-depth consultation or recommendations as to the law of product liability a priority. What is clear at this stage is that, particularly absent further statutory or judicial guidance, the quality of outsourcing arrangements as between manufacturers and software developers will be of the utmost importance when it comes to apportioning liability between various potentially responsible parties.

What can be done now?

Whilst the wheels are still very much in motion in relation to the regulatory framework for AV, there are some steps which can be considered now to help mitigate against potential costly litigation.

In order to mitigate against the risk of a user seeking to absolve themselves of liability when an AV is no longer in autonomous mode (and therefore the user should generally be responsible), manufacturers should ensure that the product instructions and warnings are fit for purpose for the consumers such that expectations are properly understood in relation to any automation, particularly the requirements for drivers to “always be able and ready to take control” of the vehicle. The adequacy of warnings and instructions for use is a critical issue in product safety law and product liability litigation, particularly when dealing with new technologies which may behave in ways which the consumer is not familiar with.

Manufacturers and software developers should also ensure that their outsourcing/supply arrangements are robust and sensibly apportion and price in the risk of different types of “section 5” claims. The Joint Report acknowledges that product liability law has not kept up with the pace of technological change and urged the Government to “review the way that product liability law applies to new technologies”. Absent such guidance, and in circumstances where it may not always be clear whether it was the manufacturer of the chassis or the developer of the relevant AV technology who was at fault, manufacturers and their suppliers will need to invest in ensuring that strong outsourcing/supply agreements are in place, and that quality and safety risk management procedures throughout the supply chain keep in line with evolving industry standards.