May 20, 2016

Transport - The Modern Transport Bill

A new Modern Transport Bill, announced in the Queen's speech, aims to 'put Britain at the forefront of the modern transport revolution'; including laws 'to make the UK ready to pioneer driverless cars' as well as provisions regarding the safety of drone flight.

The main elements of the Bill are as follows:

  •  Ensuring appropriate insurance is available to support the use of autonomous and driverless vehicles
  •  Legislation for the UK to lead the way in respect of safe technology in the autonomous vehicles industry, such as drones and spaceplanes
  •  To encourage investment in these industries, creating highly-skilled jobs and spurring innovation
  •  Updating ATOL to improve consumer protection

Aviation and maritime changes will apply to the whole of the UK, but the provisions in relation to autonomous and driverless vehicles will apply only to Great Britain.

One of the purposes of the Bill is 'to put the right framework in place.' The contents of the Bill remain to be seen, but it is likely to be welcomed if it provides clarity to this developing area, by addressing crucial issues such as insurance cover provisions.

As products, and particularly cars and drones, become more independent and self-reliant there will likely be a migration from individual to product liability policies. This is especially so following Volvo's recent statement that it will accept liability for driverless cars when they are in autonomous mode.

Given that the Government has stated that current legislation is sufficient for the insurance of testing autonomous vehicles, going forward insurers should be mindful of how existing policies may be modified in order to be able to provide suitable coverage for the developing industry.

Other purposes include driving innovation, ensuring technology delivers safer journeys and placing the UK at the 'cutting edge' of global transport developments, whilst extending its role as an international manufacturing platform. Likely benefits of the Bill which were highlighted include reduced congestion and increased efficiency of roads, railways and airspace.

Driverless car trials are already taking place in the UK – in Bristol, Coventry, Milton Keynes and Greenwich – with vehicles to be tested on motorways and A-roads in the UK from 2017.

The trials are funded by the Government's £100m Intelligent Mobility Fund and an additional £20m has been awarded to other projects for research and development. Given the UK's commitment to the autonomous industry and the likely global consumer demand (global drone expenditure is expected to double to $91bn in the next decade), it is likely that the legislation will be enacted swiftly in order for significant legal hurdles to be overcome if self-driving cars are to be on our roads by 2020.