A Roadmap for Autonomous Vehicles: State Tort Liability, Automobile Insurance, and Federal Safety Regulation

Abstract

Driver error currently causes the vast majority of motor vehicle crashes. By eliminating the human driver, autonomous vehicles will prevent thousands of fatalities and serious bodily injuries, which make a compelling safety case for policies that foster the rapid development of this technology. Major technological advances have occurred over the past decade, but there is widespread concern that the rate of development is hampered by uncertainty about manufacturer liabilities for a crash. Apparent variations in the requirements of state tort law across the country make it difficult for manufacturers to assess their liability exposure in the national market. The patchwork of state laws and resultant uncertainty have prompted calls for the federal safety regulation of autonomous vehicles.

The uncertainty seems to be the inevitable result of trying to predict how tort rules governing old technologies will apply to the new technology of automated driving. As I will attempt to demonstrate, however, well-established tort doctrines widely adopted by most states, if supplemented by two new federal safety regulations, would provide a comprehensive regulatory approach that would largely dissipate the costly legal uncertainty now looming over this emerging technology.

The technology itself largely solves the most vexing tort problems for reasons that prior analyses have missed. Autonomous vehicles will transform the individualized behavior of human drivers into a collective, systemized form of driving. In effect, a single driver — the operating system — will guide an entire fleet of these vehicles, determining how each vehicle executes the dynamic driving task. When the fully functioning operating system causes a crash, the vehicle was engaged in systemized driving that should be evaluated through performance data for the fleet, regardless of the particular circumstances of the crash. Aggregate driving data can resolve otherwise difficult tort questions.

Most importantly, the manufacturer would necessarily satisfy its tort obligation regarding the reasonably safe programming or design of the operating system if the aggregate, premarket testing data sufficiently show that the fleet of fully functioning autonomous vehicles performs at least twice as safely as conventional vehicles. To avoid liability for the crash of such a vehicle, the manufacturer must also adequately warn consumers about this inherent risk. Once again, the risk involves systemized driving performance, and so aggregate driving data provide the appropriate measure. Based on these data, auto insurers can establish the risk-adjusted annual premium for insuring the vehicle. By disclosing such a premium to consumers, the manufacturer would satisfy its obligation to warn about the inherent risk of crash, eliminating this final source of manufacturer liability for crashes caused by a fully functioning autonomous vehicle.

The collective learning of state tort law can then inform federal regulations governing the reasonable safety of automated driving technologies. The foregoing analysis is based on tort rules that have been widely adopted across the country. States that do not follow the majority approach might reach different conclusions. To ensure that manufacturers face uniform obligations within the national market, the National Highway Transit Safety Administration could adopt two federal regulations that clearly fit within its proposed regulatory approach. Each derives from the associated tort obligations concerning adequate premarket testing and disclosure of the inherent risk of crash, respectively. These regulations would largely retain the role of tort law, because regulatory compliance would also satisfy the associated tort obligations in most states, while impliedly preempting these claims in the remaining states. The regulations would promote the federal interest in uniformity in a manner that minimizes the displacement of state tort law, thereby optimally solving the federalism problem.

State tort law can then supplement the federal regulations in important instances, yielding a comprehensive regulatory approach. Within this legal framework, a regulatory-compliant autonomous vehicle would subject the manufacturer to tort liability only for crashes caused by malfunctioning physical hardware (strict products liability); malfunctions of the operating system due to either programming error (same) or third-party hacking (strict liability again, with an important caveat); the manufacturer’s failure to adequately warn about safe deployment of the vehicle (an ordinary products liability claim); or the manufacturer’s failure to treat consumers and bystanders equally when designing the vehicle and its operating system (an ordinary negligence claim). A manufacturer would also be subject to tort liability for not complying with the federal regulations (negligence per se). The potential liabilities would not be overly uncertain. Autonomous vehicles can be regulated in a manner that ensures reasonable safety without impeding the development of this life-saving technology.