Automated and Electric Vehicles Bill

(Limited Text - Ministerial Extracts only)

Committee: 1st sitting (Hansard - continued): House of Lords
Wednesday 9th May 2018 Lords Chamber

[Lord Borwick]

My Lords, I think I rather agree with the noble Lord, Lord Berkeley, about Amendment 28, tabled by the noble Lord, Lord Tunnicliffe, being better than my Amendment 23. It is better because the point about manufacturers going bust had not occurred to me—so putting it into the passive is a much better way of doing it.

Amendment 25 seems to be approaching a sort of strict liability basis, with the automated vehicle’s insurer responsible even if that vehicle was not responsible in any way for the accident. I refer him to the accident that was reported a couple of days ago with a Waymo vehicle in which another car went into it. It was absolutely not the fault of the automated vehicle; it was hit by a manually controlled car. In that case it would seem to be particularly unfair that the insurer of the automated car had to pay out and then recover from somebody else. That was an entirely innocent case where the automated vehicle was totally not responsible for the accident.

A lot of this will come out in due course as we learn more. It is a problem at this stage that we have to legislate to get the insurance right in an industry that is developing.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, the provisions in the Bill will ensure that victims of an accident caused by an automated vehicle that is driving itself will be covered by the compulsory insurance in place on the vehicle. It is the intent that the victims of such accidents will get quick and appropriate compensation.

In Amendments 23 and 28 my noble friend Lord Borwick and the noble Lord, Lord Tunnicliffe, raise the important issue of safety-critical updates to vehicles. It is not the function of the Bill to provide software standards or requirements for automated vehicles. The Bill provides an insurance framework so that victims have quick access to compensation in line with existing practices, and is just one element of a wider regulatory programme to ensure that people and businesses in this country can benefit from the safe introduction of automated vehicles.

The purpose of Clause 4 is to deal with the relationship between the insurer and the insured person in certain circumstances. This addresses the point of the noble Baroness, Lady Randerson. It exists specifically to deal with the insurer’s freedom to exclude liability in the small number of potential situations where the owner needs to act to install a safety-critical software update and knowingly chooses not to install it, or the owner makes unauthorised software alterations, thus putting themselves and others in harm’s way. The clause is designed specifically to deal with that. It mirrors the situation for the compulsory insurance of conventional vehicles, where a driver would not be protected if they drove a vehicle that they knew was unsafe or not roadworthy.

[Lord Tunnicliffe]

Perhaps the Minister could help me a little here. If a vehicle is not insured today, and a pedestrian is harmed, say, who had no responsibility at all, my understanding is that they will get an instant payout from some sort of collective fund. Is that correct? If it is, is it the intention of the Bill to have a similar situation, including possibly defective software?

[Baroness Sugg]

I am pleased that the noble Lord has allowed me to address this point, because it goes to defective software. As the noble Lord said, it would be a legal requirement that all automated vehicles must be insured, but there will be instances when vehicles are driven illegally, as we see today. I will take this opportunity to clarify that the Motor Insurers’ Bureau will continue to play the same role as it does now with uninsured and untraced drivers, so that victims involved in collisions with uninsured automated vehicles will have quick and fair access to compensation, in line with conventional insurance practice. This arrangement is not currently covered in legislation nor included in this legislation; it is covered through an agreement between the Secretary of State and the Motor Insurers’ Bureau. We are discussing what changes are needed to that agreement to sufficiently and appropriately incorporate automated vehicles within the existing process.

On software updates, Clause 4 anticipates that vehicle manufacturers will want to ensure that their vehicle systems are as safe as possible for consumers. As my noble friend Lord Borwick said, we expect that most updates will be done automatically and will be the responsibility of manufacturers. This is something that manufacturers acknowledge. Vehicle safety standards, which include software, as I have mentioned before, are still being discussed at the UNECE level. The requirements for system updates form part of the international discussions on the standards that will ultimately form the basis of the type-approval process that the vehicles must pass before they are sold in the UK.

There will be robust standards in place before these vehicles arrive to market, which will include the updating of safety-critical software. I can reassure noble Lords that vehicles will have to meet these standards before they are made available on the market. I fully appreciate the noble Lords’ intention to ensure that automated vehicles’ software is up to date, so that they are functioning safely—but, as with our previous debate on standards, we do not think it is right to act unilaterally at this time.

All noble Lords, including myself, are in the same place on this. We expect that vehicles will not be deemed safe to use, and therefore will not be placed on the list and covered by insurance, unless the safety-critical software is in place. It is a complex issue; we still do not know exactly how the software is going to work. We see some good examples from Tesla and Apple, but this is part of extensive conversations at an international level, with manufacturers and other countries, to understand how best to deal with this.

Amendment 25, tabled by the noble Lord, Lord Tunnicliffe, requires the insurer to pay out first and then recover from the liable party. I hope that I can say this in plain English. Subsections (3) and (4) of Clause 4 already work with Clause 2, where the insurer has a first-instance liability to pay the injured party. I believe that Clause 2 is clear on that, and where the liabilities of insurers are when the accident is caused by an automated vehicle. I think that the current wording fulfils the intention behind the noble Lord’s amendment.

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[Lord Lucas]

I share the noble Baroness’s admiration for my noble friend’s Amendment 30, which puts things in a very simple and clear way and is well worth having in the Bill. As far as the insurance amendment is concerned, I was looking for a way within the narrow confines of the Bill of illustrating the need for the Government to go further now. Even dealing with the subject of insurance, there are matters that need to be discussed now which we may need to bring into secondary legislation to enable things to operate properly. We should make provision for these things to be done in the Bill. I do not have answers to the questions that the noble Baroness has asked. I imagine that, in an automated world, having a dump of the data for the quarter of an hour before an accident and through as far as the machine keeps recording would be a useful way of establishing what happens during an accident; it really ought to be something we are thinking about, even in the narrow confines of this Bill.

I turn to what my noble friend said about motor vehicles. I presume the Bill will somehow, through the atmosphere of legislation, pick up the definition of motor vehicle from Section 185(1)(c) of the Road Traffic Act 1988:

“a mechanically propelled vehicle, intended or adapted for use on roads”.

However, I think the Bill uses motor vehicle in a slightly different sense, as vehicles that,

“are or might be used on roads”—

that is okay so far—

“or in other public places”.

Clearly, we have a different definition of motor vehicle here from the one in the Road Traffic Act. Therefore, we are somewhat adrift; we are dealing with things that might be used in public spaces and therefore presumably might interact with footpaths, crossing all sorts of land; they could include the sort of thing that mows golf courses too, which might very well go automatic, or the farming equipment my noble friend was referring to. If you have a footpath across the land and one of these vehicles is trundling across it, it is occupying a public space at that point; we are encompassing a wide range of vehicles beyond the definition in the 1988 Act. This might be something worth resolving at some stage.

[Lord Young of Cookham (Con)]

My Lords, the co-pilot is in charge of this group of amendments. As my noble friend Lord Lucas said, our transport networks are becoming increasingly digital. The regulation of the collection, sharing, use and deletion of data will be vital. Several stakeholders, including the insurance industry, have highlighted the need to ensure access to automated vehicle data, not least because it will help determine who is liable in the event of an accident, as my noble friend has just said.

While we certainly recognise the potential value and use of data, especially for vehicle insurers—and the need to look at the subject of data generated from automated vehicles—as with many previous amendments we do not consider that now is the correct time to start making provision for access for insurers, as suggested by my noble friend in Amendment 26. Nor do we believe that this is the right time to consider new offences regarding the deletion of data, as suggested by my noble friend Lord Borwick in Amendment 27. However, I shall seek to give both noble Lords some reassurance.

It is likely that the international UNECE regulations underpinning the type approval system, which allows vehicles to be sold in the UK, will require the use of a data collection and storage system in automated vehicles. In response to my noble friend’s Amendment 26, it is of course important that insurers have access to the data they need in order to establish liability for any accident. I hope that he finds that reassuring. However, to balance the needs of industry and consumers, we still require detailed engagement on which parties will require access to this data and how it should be shared. It is clear that some data collected by automated vehicles, such as location information, may constitute personal data and will therefore need to be handled appropriately—a point made by the noble Baroness, Lady Randerson. Therefore, there is a need to balance the personal privacy of automated vehicle users with the public good, and this is an area that will most likely need to be resolved internationally to help ensure consistent standards.

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[Lord Tunnicliffe]

My Lords, we all agree that in the future automated vehicles have the potential to improve personal transport arrangements as well as air quality, which is crucial given the dire state of the environment and its impact on health. Solving questions of how automated vehicles can be insured is essential and we welcome the fact that the Government are setting out how to do that. However, it is important to assess how measures work in practice, not only in legislation. It is particularly important that the Government should ensure that regulations are working as intended and should monitor unexpected impacts, which are always there, before attitudes and practices become entrenched and before automated vehicles become common on our roads.

Although the list in the amendment is not exhaustive, given the focus of Part 1 of the Bill it makes sense for a report to consider the impact that measures have on the insurance industry, on the cost of premiums for policyholders, on the uptake of automated vehicles and on disagreements between insurers and manufacturers on liability. This will be a fast-moving area and—who knows?—we may have to revisit areas of this Bill in the future as advances in technology take place and the advances impact on how these vehicles are insured.

It is important that Parliament is kept informed of the effectiveness and impact of the legislation to make sure that we keep it up to date as new technologies in this area are developed. I beg to move.

[Baroness Sugg]

My Lords, the Government are taking a step-by-step approach to our regulatory programme in relation to automated vehicles. Where the evidence base exists for regulatory change, we will act so that the UK public and businesses can benefit from innovative new vehicle technologies as soon as they arrive to market. As we noted when we initially consulted with the public and industry in 2016, each of these steps, taken through either primary legislation, secondary legislation or guidance, will be subject to a process of scrutiny and ongoing review.

On the automated vehicle insurance measures, as part of this regulatory programme we will continue to engage with the DVLA and other motoring agencies, the insurance industry and other relevant stakeholders to make sure that the system works effectively as the new insurance framework is implemented, and that we are still meeting our intended policy objectives to provide a compulsory insurance framework for automated vehicles.

As noble Lords will be aware, we have produced a detailed impact assessment looking at the potential direct economic effect on the insurance industry from introducing these measures. As my noble friend has just explained, the Centre for Connected and Autonomous Vehicles has asked the Law Commission to undertake a far-reaching review of the UK’s legal framework for automated vehicles. This may consider a wide variety of areas of law, including the liability and the insurance provisions set out in the Bill.

Unlike with many other amendments we have discussed today, I will not be arguing that the Bill is the wrong place for this amendment. However, it asks for a report by September 2019, which would be too early to consider whether the scheme is effective. It is not anticipated that there will be many—or even any—vehicles to which the insurance provisions apply. However, I understand and share the noble Lord’s intention to ensure that the system that is in place is working effectively, and ahead of Report I will consider whether there is anything further we can do in this area. With that in mind, I hope that the noble Lord will feel able to withdraw his amendment at this stage.

[Lord Tunnicliffe]

My Lords, I thank the Minister for her response. There is a wider point, which perhaps I should have made before—though I think she is erring towards agreeing with me—which is that it seems possible that the first fully automated vehicles could be ferrying children to school in, say, five, 10 or 15 years’ time, without this issue coming back to this House at all, by virtue of the wide powers that many of the road traffic and other Acts have to do things by order, for example. Therefore I hope that we will be able to find some sort of reporting compromise that ensures that this House and, ideally, Parliament in general are kept informed of developments in this exciting and innovative area. I beg leave to withdraw my amendment.