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Drones: Product liability, design specifications and standards

  • Market Insight 21 April 2022 21 April 2022
  • Asia Pacific

Background

Any regulatory framework for drones must address the complex web of airspace integration, safety, security, noise, environment, privacy, safe and efficient electric take-off and landing vehicles, infrastructure, technology trials and central coordination. These are all important issues and are integral to the development of a comprehensive regulatory structure that will allow countries to benefit from the considerable opportunities provided by drones.

In their consideration of these issues, regulators have been very conscious of the need to tread a path that does not stifle innovation by introducing measures which excessively load liability on manufacturers, when the users of the automated technology, or their insurers, may be better positioned to bear the risk.

Furthermore, with the technology developing at such a rapid rate, and new and innovative uses for drones being found almost daily, it is understandably difficult for national authorities to keep pace across the full regulatory framework. It is therefore not surprising that to date the focus of regulatory activity globally has been upon imposing strict operating limitations on all drone activities targeting the safety of those on the ground and other aircraft through the restriction of the use of drones in populated areas and in the proximity of airfields or other busy airspace.

Regulatory, design and compliance initiatives

While the primary responsibility for safe operation of the drone lies with the pilot and the operator, there is increasing attention being paid by regulators and international organisations, such as the International Civil Aviation Organisation (ICAO) and the European Union to the implementation of design specifications and production standards, and to the imposition of obligations upon manufacturers and those responsible for the design and production of drones. This trend is expected to become more marked as the use of drones continues to expand; that is in large part because to move safely and efficiently integrate drones in to the wider airspace and congested environment, technological safeguards and mitigations are needed to support the pilot’s control (e.g. effective geo-fencing and “detect and avoid” capability).

 These initiatives potentially have significant impacts upon product liability claims and determinations in the future.

ICAO, with its Member States, has developed a draft regulatory framework for Unmanned Aircraft Systems (UAS) based upon a review of existing regulations in Member States in a bid to share best practices that can be implemented by countries seeking to improve, or introduce, UAS regulation. For example, ICAO Model UAS Regulation Part 102 (issued 23 June 2020) would establish a system by which declarations of design and manufacture may be used for certain (commonly applicable) drones and drone operations; that system then requires the manufacturer to make a declaration to the national authority specifying the manufacturer of the UAS, the model of the system, the maximum takeoff weight of the unmanned aircraft (UA), the operations that the UA is intended to undertake and the category of UA; as well as specifying that the system meets the means of compliance applicable to the operations for which the declaration was made. Importantly the means of compliance shall consist of data (tests, analysis, industry consensus standards) and the results or justification used to demonstrate the UAS meets the predetermined level of safety the authority has established as acceptable.

In a similar vein to the ICAO Model Regulations, Commission Implementing Regulation (EU) 2019/947 of 24 May 2019 and Commission Delegated Regulation (EU) 2019/945 of 12 March 2019 on Unmanned Aircraft Systems, lay new cornerstones for European UAS regulation commencing December 31, 2020. The EU Regulations seek to target the heaviest regulatory burden at the areas of highest perceived risk while maintaining a relatively light touch approach to those operations considered lower risk. With higher risk operations, detailed airworthiness standards covering structures, design and construction, lift/thrust/power system installation, and systems and installation are prescribed, and requirements even extend to addressing the risk of unauthorised access or takeover of a drone’s controls. This level of detail clearly has significant implications for product liability claims and determinations impacting upon matters such as reasonable care, reasonable design and state-of-the-art defences.

In the United States the Federal Aviation Administration (FAA) has, pursuant to section 345 of Federal Aviation Authority Reauthorization Act of 2018, already imposed safety obligations on manufacturers who will be required to self-certify that their products comply with the relevant safety standards.

It is clear that the development of a consistent regulatory and operational framework for drones must of necessity consider product liability issues which in turn are closely connected to the development of drone-specific airworthiness standards, including mandated 'fail-safe' functions. For example, an Australian Senate Inquiry Committee reporting on the safe use of drones in 2018 recognised that to allow drones to fully integrate into shared airspace, they must be subject to standards of airworthiness. The committee recommended that airworthiness standards should extend to drones that arrive in the country through foreign imports, and that drones should include a number of fail-safe redundancies, such as return-to-home functionality and forced flight termination.

Products liability law

The ever-increasing use of drones is certain to be accompanied by an increase in misuse and mishaps, leading to an inevitable rise in litigation involving bodily injury, death, and property damage caused by drone accidents.  Such litigation may require resolution of complex issues involving allocation of liability for the damage inflicted by drones between and among the owners, operators, designers, manufacturers, and distributors.  

Unless and until uniform civil liability laws are enacted, the allocation of liability for drone-caused injuries will continue to be governed by existing principles of tort law and national legislation directed generally, for example, at defective products.

Globally there is an existing and well-developed body of products liability law developed to address claims against manufacturers and others in the chain of distribution of drones. There are, of course, sometimes significant differences in the scope and content of such laws as between national jurisdictions, but the overall thrust of product liability laws requires product manufacturers and distributors to ensure that their products perform in a reasonably safe manner. 

Products liability law provides the basis for seeking remedies when a defective product causes harm to persons or property and serves two primary purposes; namely, to incentivise product manufacturers to make their products safer, and to compensate victims harmed by those products.  Under the broad umbrellas of tort law and contract law, there exist multiple bases upon which liability that can be asserted in a products liability claim. These include negligence, manufacturing defects, design defects, failure to warn, and breach of warranty.

Notwithstanding that drones are equipped with novel and complex technologies and are being used in an ever-expanding variety of new applications, products liability law has proven itself to be remarkably adaptive to new technologies and products, and to resolve the initially novel questions they posed, for more than half a century. The same will hold true for drones.

Concluding comments

The drone industry is in its infancy and, given the tremendous economic efficiencies offered by this new technology, the commercial use of drones is certain to expand significantly in the coming years. An unfortunate, but unavoidable, result of the increased use of drones will be an increase in mishaps, resulting in increased litigation involving personal injury, death and property damage caused by drone accidents. Although drones incorporate new and complex technologies, the existing framework of tort law, and specifically products liability law, is available and capable of addressing the allocation of liability between and among the manufacturers and other entities in the chain of distribution. For those entities, an understanding of their potential liability exposure under that framework, and the steps needed to avoid such exposure, is key to the future success of the drone industry. 

Realistically, liability regimes will continue vary from state to state (even with model regulations as above) but if there are uniform or harmonized standards across the majority of jurisdictions, that will allow and facilitate some degree of practical harmonization and predictability for manufacturers.

The increasing attention being paid by regulators and international organisations to the implementation of design specifications and production standards, and to the imposition of obligations upon manufacturers and those responsible for the design and production of drones, already has, and will continue to have, product liability repercussions for the many different parties in the supply chain where drones may be used. Manufacturers will need to ensure that they comply with design specifications and that sufficiently rigorous quality control checks are in place to ensure that the products manufactured meet the requisite design and safety standards.

As a firm Clyde & Co remains committed to mapping and understanding risks associated with the use of drones alongside a growing network of cross-sector experts and collaborators, to help our clients navigate the rapidly evolving risk landscape they face. If you would like to understand how we can help you in this regard please contact Maurice Thompson, Patrick Slomski, Julie-Anne Tarr and Dr Tony Tarr.

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