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Regulatory changes are necessary to better position Ontario for adopting autonomous vehicles and addressing any related issues. Both regulators and insurers must be ready for the near future, which will likely feature a mix of assisted driving technologies and the ability of a driver to take control should the need arise.


March 1, 2017   by Jonathan Grnak, Barrister & Solicitor, Danson Recht LLP


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There is no disputing that autonomous vehicles (AVs) are just around the corner. With companies such as Tesla, Google/Waymo, Uber and Volvo testing their AVs in various cities around the globe, governments must begin looking at ways to regulate the technology in order to not only promote innovation, but to also encourage consumer adoption. One of the main issues that must be overcome is liability.

In Ontario, as it currently stands, Section 192 of the Highway Traffic Act states that the driver, owner, lessee and operator of a motor vehicle are jointly and severally liable for loss or damage sustained by any person by reason of negligence in the operation of the motor vehicle on a highway. Furthermore, the onus of disproving negligence rests with the driver/owner.

In essence, the section states that if a driver/owner causes damage to someone or something while operating a vehicle, he or she is liable unless he or she can prove otherwise.

Jonathan Grnak, Barrister & Solicitor, Danson Recht LLP

The existing law in Ontario makes it clear that new obligations or legislative amendments will have to be implemented to reflect developing autonomous vehicle technology. Specifically, at what point does liability for an accident shift from the driver to the vehicle itself?

The Society of Automotive Engineers (SAE International) provides that there are five different levels of driving automation.

  • Level 0 means a human driver is in full control of the vehicle;
  • Level 1 means a driver controls most functions, but that the car can do some functions automatically;
  • Level 2 means the driver is disengaged from physically operating the vehicle (for example, lane centring), but must still always be ready to take control;
  • Level 3 means that while drivers are still required, safety-critical functions can be transferred to the vehicle under certain traffic or environmental conditions;
  • Level 4 has been described as fully autonomous vehicles “designed to perform all safety-critical driving functions and monitor roadway conditions for an entire trip;” and
  • Level 5 has been defined by Stanford University, based on information from SAE International, as vehicles without an option for human drivers, since there are no steering wheels or controls.

Ontario’s Ministry of Transportation (MTO), recognizing that AV technology is developing at a staggering pace, implemented on January 1, 2016 a 10-year pilot program to allow for testing of autonomous vehicles on roads in the province.

In an effort to clarify liability should an autonomous vehicle crash, the 2016 report, Automated Vehicles – Driving Innovation in Ontario, states the Highway Traffic Act, as currently drafted, will apply to the driver/vehicle owner, with no exceptions.

Is this sufficient to encourage manufacturers to test their products in the province, while simultaneously promoting consumer adoption of autonomous vehicles?

The general consensus among industry experts seems to be that fully autonomous vehicles (Levels 4 and 5) will greatly reduce the number and costs of collisions, which could, ultimately, reduce insurance premiums.

Level 3 autonomy, however, could actually increase collisions as a result of the interplay between the driver and vehicle, and the requirement for a driver in any given scenario to assume control should the vehicle be unable to act.

While Level 5 autonomy is likely several decades away, predictions about Level 4 autonomy is that these vehicles could be on the roads by 2021, Volvo Cars reported in the spring of 2016.

Until that time, though, vehicles on the road will be a combination of Levels 0 to 3, which means there will be a “mish-mash” of assisted driving technologies, with a driver in the driver’s seat at all times, ready to take over.

That said, how will the automotive insurance industry be affected?

The likelihood is that AV technology will dilute the sense that drivers are directly and solely responsible for their vehicles. What this means is that fault will have to be ascertained as between the vehicle and the driver.

Currently in Ontario, although MTO’s stated position is that drivers will remain liable regardless of the level of autonomy, at what point in the future does the provincial government have to consider regulatory changes to take into account the possibility that vehicles could be deemed responsible for crashes?

At its most basic level, the purpose of mandatory auto insurance in Ontario is to ensure individuals are compensated for their injuries. Based on the current law, injured parties are entitled to sue the driver of the vehicle that caused their injuries, and the insurer for that party must then compensate the victim.

However, if the vehicle is operating autonomously, should the operator still be liable?

The United Kingdom’s Department for Transport recently detailed its view in Pathway to driverless cars consultation on proposals to support advanced driver assistance systems and automated vehicles technologies: government response.

One of the main ideas that the department put forward is that an insurer will be required to provide coverage for both the driver’s use of the vehicle, as well as the AV technology, within a single policy of insurance. This model would ensure that the driver is covered both when driving, and after having activated AV mode.

In the event of a collision while the autonomous mode is active, the victim would be able to claim from the insurer and where the manufacturer is found to be liable, the insurer would be able to recover against it under product liability laws, the response notes.

While this makes sense in theory, the determination of who had control at the time of a collision is contentious and will require the examination of data logged by the vehicle. Manufacturers will arguably own the data, but insurers will require access to it in order to investigate claims.

It goes without saying that problems could arise when a manufacturer is asked by an insurer to provide crash-related data so the insurer can determine whether or not the manufacturer is at fault.

Experts consulted by the U.K. Department for Transport reported the expectation is that, over time, insurers and manufacturers will develop processes to quickly handle most claims.

If manufacturers prove unhelpful in determining liability, insurers could simply stop offering insurance products for their vehicles.

In lieu of the aforementioned method, manufacturers could, instead, decide to insure their own vehicles. Volvo, for example, pledged that it would assume full liability for any crashes involving its autonomous vehicles.

A noble idea; however, the question becomes whether or not vehicle manufacturers have the resources required to act as an insurer (for example, when investigating claims).

Furthermore, manufacturers could include insurance premiums in the costs of their vehicles, but it remains to be seen whether or not consumers will be receptive to this practice.

There is also the idea that manufacturers will want to protect their reputations, and, thus, there is the possibility that they will take a hard-line stance when it comes to defending themselves and their technologies, creating a situation of increased litigation costs.

Based on the foregoing difficulties that could arise as a result of insuring autonomous vehicles, the Ontario government, in consultation with the federal government, ought to establish the extent to which it wishes to embrace autonomous technology.

It is advisable that the Ontario government move beyond merely acknowledging the fact that it is open to allowing AVs to be tested on provincial roads via permits. Further, it must look to regulate mandatory insurance requirements to incorporate product liability, as well as to amend the Highway Traffic Act to account for the fact that drivers, ultimately, should not be held responsible in circumstances when a vehicle in autonomous mode causes an accident.

For their part, insurers must accept that AVs will, undoubtedly, disrupt the automotive insurance industry as a whole, but, ultimately, the magnitude of same still remains a big open question.