Keeping up with the (self-driving vehicles)

Just over 100 years ago, the mass production of inexpensive combustion engine automobiles transformed the way people of the world traveled. Cars almost completely displaced the horse as the mainstay of American transportation - and thereby changed our lives, our economy and our laws.

Once again, major transportation change is upon us. The confluence of self-driving or "autonomous" vehicles (AVs) and ride-sharing apps promises to revolutionize not only how we get ourselves and our goods and services from one place to another, but also the design of our cities and highways and the functions we can expect cars to perform. As society shifts from ownership models to service-based "sharing economies," we eventually see the day where driving oneself around town may become as rare as riding a horse. Limited AV technologies like adaptive cruise control, crash prevention systems, park assist or lane departure warnings are already commonplace. The emergence of AVs will require the legal system not only to apply old legal standards to new technology, but also to help shape the development of new legislation and regulation. Some of the key legal issues involving AV technology, including tort liability and insurance coverage, privacy and cybersecurity, as well as possible regulatory reform, are discussed below.

Tort Liability and Insurance Coverage

As vehicles become increasingly autonomous, and indeed reach true "self-driving" status, what legal theories will apply when they are involved in accidents? For example, what legal standards will apply if a self-driving car is involved in an accident with another car driven by a human? Who will be held accountable, and under what standards, if a self-driving car gets into an accident with a car using advanced, driver-assisted technology, but that still has a human behind the wheel? The driver? The software developer? The auto manufacturer? Other third parties involved in the AV process?

These disputes may become a hybrid of product liability and negligence actions, and some may argue will require the development of new legal standards and new jury instructions.

State laws defining who is the "driver" or "operator" of an AV take one step toward bridging these gaps. In Michigan, for example, "[c]ausing an automated motor vehicle to move under its own power in automatic mode" qualifies as "operating" the vehicle. But such provisions are unlikely to resolve fully many of the more complex legal issues. It is also unclear whether and to what extent existing auto insurance policies will provide coverage, and there may be a spike in coverage litigation unless and until insurers develop policy language (be it exemptions or coverage) that explicitly addresses AVs.

Some state laws already impose insurance requirements that AV "testers" must meet before they even begin testing autonomous vehicles. California, for example, requires testers to "obtain an instrument of insurance, surety bond, or proof of self-insurance in the amount of five million dollars" before testing an autonomous vehicle. Ultimately, as AV technology serves to reduce the number of accidents by eliminating human errors, lowering the risk borne by insurance companies, insurers are likely to adapt.

Other state legislation addresses the liability of automobile manufacturers in specific situations. Nearly all states with comprehensive AV legislation exempt the manufacturer from liability where the vehicle has been converted to an AV by a third party and injury, death or property damage is caused by a failure of the autonomous system. These provisions, however, may not exempt manufacturers from potential liability where a potential plaintiff alleges that the defect that caused the injury, death or property damage existed in the vehicle as originally manufactured.

Privacy and Cybersecurity

AVs will likely be fully networked and capable of gathering information from passengers' mobile devices. Many AV technologies are not feasible, or can't reach their full potential, without data transfers with other vehicles and automotive infrastructure. For example, communication between AVs can serve to efficiently manage traffic, improve route planning, avoid congestion and enhance safety. AVs can potentially provide significant data and feedback on their operation, as well as data regarding their riders. The collection of data may raise data protection and privacy issues vis-à-vis the consumers of these services. The Alliance of Automobile Manufacturers has already published a letter outlining principles or issues in this area. These principles mirror the Fair Information Practice Principles, or FIPPS, that have over the last half century provided a foundation for privacy policy around the world. Specifically, FIPPS emphasizes the need for transparency, choice, respect for context, data minimization, de-identification, retention, data security, integrity and access and accountability.

The principles are merely guidelines that private companies and governments can follow when crafting policies and drafting legislation respectively. Some new state legislation regarding AVs incorporates aspects of the principles. California legislation, for example, incorporates the choice principle, requiring AV manufacturers to obtain an operator's written approval to collect any information through the vehicle that is not necessary for its safe operation.

In addition to privacy, AVs may raise cybersecurity questions regarding future vulnerabilities or the potential for accidents. Regulators will have to strike an appropriate balance between developing any needed safety standards and not stifling the development of the new technology.

State and Federal Regulatory Law

State legislatures have taken notice of the rapid advances in AV technology. Starting with Nevada in 2011, an ever-increasing number of states have passed or introduced AV legislation that seeks to promote the safety of consumers without stifling AV testing and development. While some legislators have introduced unique bills to address areas of special concern, most state AV legislation consistently converges on a core group of safety, regulatory and privacy issues.

Most state AV legislation includes a catch-all provision requiring AVs to comply with previously established federal and state safety standards. These provisions often make it clear that AVs are not exempt from certain safety standards that are applicable to non-autonomous vehicles. California, for example, requires AVs to meet "Federal Motor Vehicle Safety Standards for the vehicle's model year and all other applicable safety standards and performance requirements set forth in state and federal law and motor vehicle laws and traffic laws of th[e] State."

Some states require AVs to be registered with the state in order to be operated or tested. Other states require AVs to meet certain standards in order to be tested or operated within the state. Almost all state AV legislation includes a core set of requirements intended to ensure operators can take control of the vehicle in a traditional manner should the need arise. These include failure alert systems, visual indicators showing when autonomous technology is operating the AV and mechanisms to engage and disengage the autonomous technology.

Conclusion

AVs have great potential, but that potential may be limited by the ability of our legal system to keep up with this new technology. Policymakers, lawyers and others involved in the development of AVs should continue to look for ways to develop rational and effective legal standards that do not overly burden AV innovation. However, until the law catches up, those involved in the development of AVs should be cognizant of the potential risks and strive to implement ways to minimize exposure.

Jeff Rabkin is a partner in Jones Day's San Francisco office. J. Todd Kennard is a partner in Jones Day's Columbus office. Brandy Ranjan is an associate in Jones Day's Columbus office. Insa Janssen is a German trainee lawyer at Jones Day, working currently in the firm's San Francisco office. The views and opinions set forth herein are the personal views or opinions of the authors; they do not necessarily reflect views or opinions of the law firm with which they are associated.