March 8, 2017

Driverless cars Bill published

The Vehicle Technology and Aviation Bill (previously the Modern Transport Bill) extends compulsory motor insurance to automated driving and provides vehicle insurers with the ability to recover compensation payments from vehicle or software manufacturers where the collision is the fault of the driverless vehicle.

The plans were first introduced in the Queen's Speech in May 2016 with aim of 'making the UK ready to pioneer driverless cars'. The Bill is a clear demonstration of the Government's commitment to placing Britain at the forefront of the modern transport revolution.

Single insurer policy

There is a single insurer approach whereby the injured party (including the automated vehicle 'driver') will be able to claim compensation from the insurer of the automated vehicle. In turn, the insurer will have a right of recovery from vehicle and software manufacturers.

The Bill provides two exemptions to the single insurer policy. Liability may be excluded or limited if the insured driver has made or allowed unauthorised modifications to be made to the automated vehicle or failed to install a software update.

The Government's decision of having a 'one policy to cover all risk' is likely to be welcomed by the insurance industry, particularly as the response clarifies a number of key uncertainties concerning liability in respect of a mixed autonomous / manual fleet of vehicles on UK roads. This will need to be kept under close review and adapted as and when the UK motor fleet moves from mixed to largely autonomous vehicles. 

Next steps

The Bill passed its Second Reading in the House of Commons on 6 March 2017 and will now progress to a detailed and methodical assessment at the Committee Stage. The House of Commons has said proceedings in the Public Bill Committee are expected to be concluded before Thursday 23 March 2017.

However, the Bill has been granted a 'carry-over motion' meaning the progress of the Bill could be delayed until the next Parliamentary Session beginning in May 2017. This is likely to due to Parliament's focus shifting to recent changes regarding whiplash reform, the discount rate and most importantly Brexit.