1. Smart Cities & Smart Mobility
Smart cities are a result of superfast telecoms networks, electrification, artificial intelligence, Internet of Things (IoT) and Digital Payments. The interconnecting key elements of smart cities are networks of sensors attached to real world objects such as roads, cars, electricity meters, domestic appliances and human medical implants which connect these objects to digital networks i.e. the 'Internet of Things' (IoT), 'ubiquitous computing' or ubicomp (Docherty 2018). Proponents of “Smart Mobility” shape a vision of the future in which mobility will be framed potentially within endless categories. One example of this is ‘Mobility as a Service (MaaS)’ or a personalized service available ‘on demand’, with individuals having instant access to a seamless system of clean, green, efficient and flexible transport to meet all of their needs (Wockatz and Schartau, 2015). Other examples are Connected and Automated Vehicles (‘CAV’) and peer-to-peer sharing applications on smart phones which provide options of various integrated mobility throughout the city. The focal point of my research would be on CAVs as they represent a technological transition with a significance equivalent to that of the emergence of the internal combustion engine emitting uncontrollable amounts of CO2, and thus declared an assustainable form of energy source for mobility in the long run. The transition is also likely to coincide with the shift in ownership to car sharing ‘MaaS’ or selling rides, not cars and the electrification of transportation. (Fagnant and Kockelman 2015). To put the growing market share of CAV’s into perspective, statistics demonstrate that Global Plug-in Vehicle Sales Reached over 3.2 Million in 2020 and in Norway CAV’s rose to a record 54% market share overtaking those powered by petrol, diesel and hybrid engines. (The Guardian 2021)
2. Safety and Artificial Intelligence
Modern CAV’s are distinguished by their reliance on artificial intelligence (AI) systems; in effect, they are ‘robots’. The introduction of CAV’s means putting AI controlled robots in charge of fast-moving projectiles in relation to passengers and road users which are seen to increase road safety and decrease road fatalities yet, within the legal realms these ‘robots’ are not regulated on a multi-governance level. The best-known projects as of yet – Google’s Waymo or Tesla, for example – involve ‘intelligent’ vehicles driving on ‘dumb’ roads, and thus are entirely dependent on their own sensing and data processing capacities. (Altunyaldiz 2020) The race to develop vehicles with increasing levels of autonomy led to its first fatality in May 2016. A driver who had put his car into Tesla’s autopilot mode crashed into a large truck which in the bright conditions it failed to detect. The investigation by the U.S. National Highway Traffic Safety Administration found that Tesla was not at fault (Levin and Beene 2017). Nonetheless, giving robots responsibility for transporting human passengers on the public road network has enormous safety implications as they reduce probabilities of human error such as tiredness etc (Docherty 2018). In 2018, there were 268 million cars, over 33 million vans, and 6.6 million trucks on the roads of EU member States; Yet, over 25,000 people were killed on those same roads due to human error (European Commission 2019). The European Commission has set out a zero vision Initiative Action Plan which aims to reduce road deaths to almost zero by 2050 (EU Commission 2021). The circulation of semi-autonomous vehicles on European roads is likely to increase significantly (along with increasing safety) in the coming years, with some believing it possible that completely autonomous vehicles may become available within the next decade. These developments pose questions in relation to criminal and civil liability, the obligations of manufacturers and insurers and the future regulation of road transportation (Altunyaldiz 2020). If legislators avoid making the driver the focal point of the regulations, the manufacturer will almost certainly have to face an additional burden, at least until the manufacturing process becomes sufficiently safe. However, human safety should be the greatest incentive to use CAVs, because if the idea is not seen as socially desirable, it will never see the light of day (Patti 2019, 137). In return and from a Competition Law perspective, manufacturers will actually innovate more as they will compete on the basis of ‘better’ software being embedded in CAVs. Moreover, the manufacturers themselves can influence the safety of the vehicles by means of the designs employed, and they can simultaneously transfer some of the costs back to the consumer (Lohmann 2016, 338). A solution would be to implement a ‘Privacy by Design’[1] (‘PbD) type safety measure embedded in the software of the technology used in CAV.
3. Regulatory Framework(s)
Currently various dispersed ‘laws’ surrounding CAV’s cover a host of issues including insurance, product liability, international vehicle standards, criminal liability for driving offences, civil penalties for driving infractions, roadworthiness standards and procedures, consumer information and marketing standards, driving licences, accident investigation procedures, data protection regulations, regulation of the taxi and private hire markets, regulation of public service vehicles, general traffic regulations etc (ACEA Report 2019). When considering safety; protection of data, criminal liability and civil liability concerns should be accounted for yet as of now and so far, EU’s only response seems to have been confined to the framework of the Motor Insurance Directive 2009/103/EC (hereinafter ‘MID’), Product Liability Directive 85/374/EEC (hereinafter ‘PLD’) and the General Data Protection Regulation EU 2016/679 (hereinafter ‘GDPR’). CAV’s rely on a diverse and complex range of infrastructure, both physical and digital, to support their operation. Delivering this infrastructure will depend on meeting commercial and security challenges, and establishing effective models of collaboration and more. (Punev, 2020)
4. ‘Gap Analysis’ or Limitations within the Current Regulatory Framework
Substantive rules on liability for damages resulting from motor vehicle accidents and breach of data privacy obligations are not harmonised on an EU level, or even international level for that matter. There were two main points (Lee and Hess 2020) of criticism surrounding the law pertinent to CAV’s. First, the current liability regulation does not accommodate future autonomous vehicles. The liability rules are likely to create some disincentives for owning or choosing CAVs in one member state over another if the regulatory framework remains scattered; therefore, revision of the current liability regime is crucial keeping in mind the speed of consumer/user demand of CAV’s on the market. Second, the law regarding the ‘black box’[2] is too vague because of this it is unclear who owns the data and so, data privacy could become an issue (Burianski and Theissen 2017).
a. Product Liability
The PLD sets out rules related to the liability of producers and the rights of consumers for products sold within the EU. It sets a no-fault liability i.e., the producer of a defective product must provide compensation for personal injuries caused by their product irrespective of the negligence of an individual (or driver in CAV case) as per Article 1 of PLD. The presentation of the product, the products ‘reasonable expected use’ and the time when it was put to market are all influential in determining whether the product is “defective” as per Article 6 of PLD. There is a limited list of derogations that can waive product liability according to article 7 of the PLD. Due to that, the PLD only covers liability of producers of defective products and this is not sufficient to deal with producer’s liability for injuries caused by autonomous and semi-autonomous vehicles. In addition, the cost of scientifically unknown risks would be borne by the injured party, thus the burden of proof lies with the victim and this can be challenging, to say the least (Lohmann 2016, 337).The PLD upholds the ‘development risk defence’, according to which a producer bears no liability if the state of scientific and technical knowledge at the time the product was put into circulation was insufficient to allow the producer to discover the defect (Patti 2019, 138–9). By adhering to this doctrine, it would be fairly easy for the manufacturer to claim that the defect which caused the damage did not exist at the time the CAV was put into circulation or that it did not become apparent until later on. More importantly, situations involving software failure pose an even greater problem. It is unclear to what extent software can be treated as a product in the hardware-oriented PLD (Dima 2019, 27). Even if we assume that software is a product, what does it actually mean for the software to be defective? And how can this be proven by the consumer, who bears the burden of proof in court? The aforementioned are only some examples of the gap within the current liability regime.
b. Insurance Concerns
The MID prescribes only minimum third-party liability insurance. Autonomous vehicles fit the definition of “vehicle” set out in Article 1 of this Directive and so will automatically be covered by its provisions.[3] The MID in its current form only contains two relevant points: vehicles must be covered by motor insurance, and victims can lodge claims directly against the insurer. However, the insured risk is assessed differently in different member states (Evas 2018, 24). Moreover, compulsory insurance does not in itself lead to a no-fault system but only replaces the insured party with the insurer in case of tort (Patti 2019, 130). Furthermore, drivers of CAVs may become the victim in an accident in which their own car is involved, a situation which falls completely out of the scope of existing regulations. The more a system becomes autonomous, the less a driver can be held responsible for any accidents (Marchant and Lindor 2012, 1326). For CAVs the right solution might be compulsory no-fault insurance, supplemented by a shift of liability to the manufacturer. A fault-based system, which relies on the care exercised by drivers, is obviously impractical for CAVs, not only because these vehicles are designed to learn from mistakes, but also because it would be burdensome for the victim to prove the negligence of the driver. The above mentioned considerations motivated England and Wales to get rid of their fault-based (and driver-based) system in 2018 (Punev 2020). Compulsory third-party liability insurance, strictly based on the liability regime, is a necessary step towards establishing a contributive system: every AV manufacturer would contribute to the cost of insuring all such vehicles (Ilková and Ilka 2017, 432). Insurers are key stakeholders in the development of assisted driving technologies, since car insurance is obligatory (Altunyaldiz 2020). They have the power to decide whether or not to insure CAV’s and thereby determine their commercial viability. One way in which insurers can address some of the premium-setting and liability concerns is through the use of pay-as-you-drive (PAYD) systems and ‘black boxes’. PAYD is an insurance model that uses telematics systems to calculate premiums according to individual driving behaviour, and could be employed to ascertain liability. This technology could be used to monitor the vehicle interior and ensure the driver is still paying attention even when using assisted driving technology. PAYD systems are considered fairer as users are charged according to their own driving behaviour and studies have shown that they can positively impact on driver behaviour (Dijksterhuis et al 2015). However, increased monitoring of consumers in this way also raises privacy and security concerns.
c. Privacy and Cybersecurity
CAV’s are data-dependent and data-generating, including sensitive personal data relating, for example, to an individual’s movements. The data from autonomous vehicles is automatically shared with other autonomous vehicles, with a central system and in some cases with regulatory and law enforcement bodies (Altunyaldiz 2020). The sheer magnitude of the data involved poses a major risk in protecting data protection rights of users of CAV’s. Enhanced diligence is required to ensure a correct balance between data processing that is necessary for the safe operation of autonomous vehicles and respect for and protection of the privacy of drivers, passengers and other users. Also, how can the new regulatory regime find a correct balance between fostering innovation and protecting the privacy of individuals? Within the EU, the GDPR[4] is relevant in this respect and applies to all companies processing data from subjects residing in the EU, regardless of the location of the company. Effective data protection regulations will be an important and necessary part of the overall regulation of autonomous vehicles. If not, hackers could potentially take control of a vehicle through wireless networks, such as Bluetooth, keyless entry systems, cellular or other connections. Some of the data is collected by Event Data Recorders (EDRs). These devices are embedded in the vehicle’s system to collect data that could be referred to in the event of an accident. This data would constitute very important evidence in court cases. However, regardless of any technological advances, manufacturers will have to meet their obligations under the GDPR. Among other things, this means that they will only be able to process personal data if they first obtain the driver’s consent[5] and if the proper information has been provided (AdaptIVe Consortium 2014, 29). Although data minimisation would be welcome, without data collection—and in particular, without the use of EDRs—it would be hard to trace who is liable for an accident in complex situations. If there are no clear answers to the questions of whether EDRs comply with data privacy legislation and whether it is legal to gather complex data from AVs, manufacturers will not be motivated to invest in EDRs (Punev 2020).
d. Criminal Liability
In the case of CAV’s, criminal law is not designed to deal with the conduct of non-human actors. This may create a ‘responsibility gap’, where the human in the vehicle – the ‘user-in-charge’ even if not actually engaged in driving – cannot be held liable for criminal acts and the vehicle itself was operating according to the manufacturer’s design and applicable regulations. (Punev 2020)
e. Civil Liability
Current fault-based liability regimes may leave the user-in-charge absolved of any liability, with responsibility shifted to the CAV. This may require new approaches, such as strict liability to ensure that injured parties receive compensation for the damage they suffer.
5. Multilevel Governance
It is highly probable that every member state within the EU will want to foster the use of CAVs, but some states might end up limiting access to CAV’s by creating legislation that is poorly drafted or inappropriate. If administrative law were to be interpreted differently in each member state, this would create a horizontal barrier and result in cases that are similar to each other receiving unequal treatment, including an unfavourable choice of forum in the event of litigation.[6] A common, predictable and clear approach to the administrative regulation of AVs could also be an attractive marketing tool for the EU.
a. National Level
For example, Germany has been developing its own CAV testing regulations at the federal level, with little reference to the EU regulations. Germany is a global leader of automobile manufacturing and home to global brands such as Volkswagen, Mercedes-Benz, BMW, and Audi. The country’s Federal Highway Research Institute provided insightful research on CAVs. German traffic regulation is based on the German Road Traffic Code Straßenverkehrs-Ordnung (Bundesministerium der Justiz und für Verbraucherschutz, 2013) which is in accordance with the Vienna Convention on Road Traffic (2016 revised amendment). It is urged that leading car making industries co-operate on a global level to regulate common standards and goals in making harmonized laws across various governance levels.
b. International Level
It is considered that ethical and regulatory standards applicable to AI in general should also be applied to its use in autonomous vehicles and that the work of the Ad hoc Committee on artificial intelligence (CAHAI) on a possible legal framework for AI will be especially significant, and notes the important contributions to work in this area of other international organisations including the Organisation for Economic Co-operation and Development (OECD), the European Union (EU) and United Nations bodies (Atunyaldiz 2020). At an international level the Vienna Convention on Road Traffic of 1968 deals with general traffic law which stipulates that all drivers must be able to control their vehicle at all times[7]. In 2016 automated vehicles were included to the convention[8] provided they fulfil the requirements of the United Nations Economics Commission for Europe (UNECE) Agreement of 1958 and the Global Technical Regulations (GTR) Agreements of 1998 that establish uniform conditions of approval of motor vehicle equipment. The Motor Vehicles Directive 2007/46/EC was adopted at EU level to ensure that once vehicles or their components are certified in one Member State, they cannot be excluded from markets of other states unless there is sufficient evidence that it would seriously threaten traffic safety.
6. Research Objectives
A Regulatory framework keeping in mind current frameworks such as PLD, MID, GDPR and any international legislative intervention needed to contribute to the reduction of inefficient, asusstainbable, inappropriate, insufficient, ineffective and incoherent situations of CAV regulation today.
7. Methodology
a. Legal analysis of the possible EU added value of legislative changes to the EU liability framework of earlier deployment of CAV vehicles. b. Expert interviews with stakeholders to verify assumptions for the quantification. c. Legal analysis of gaps and shortcomings of the Product Liability Directive, Motor Insurance Directive and the GDPR. d. Comparative legal analysis of national regulation of liability issues in Germany, Sweden, the Netherlands, Belgium and, or other countries.
e. Intellectual property law protections granted to the rights of the holders of patents, trademarks and copyright just as the GDPR protects the rights of data subjects for their personal data. f. Possible conflicts with other EU laws when estimating the outcome and effectiveness of a new regulation. g. Integration of sufficient and appropriate protection for all its stakeholders. h. If the law may/can deincentivise combustible CO2 emitting vehicles and incentivise use of CAV’s from a Competition Law perspective. i. Propose the formation of a single entity which can compensate victims of damage due to software failure. j. How national legislation (of Germany, for example since they are far ahead) can become a secondary tool for important issues that can be regulated on an EU level.
k. The legal, social and economic benefits and drawbacks of current discrepancies between market expectations and reality. l. Analyse administrative issues arising in the near future due to the introduction of a new regulatory framework and finding a correct balance between fostering innovation and protecting the privacy of individuals.
References used in Proposal
ACEA Report – Vehicles in Use, Europe 2019”, European Automobile Manufacturers’ Association. Access here > https://www.acea.be/publications/article/report-vehicles-in-use-europe-2019
AdaptIVe Consortium. (2014). Final project results. http://www.adaptive-ip.eu/files/adaptive/content/downloads/AdaptIVe-SP1-v1–0-DL-D1–0-Final_Report.pdf. Accessed 9 January 2020.
Altunyaldiz.,I, ’Legal aspects of “autonomous” vehicles’, [2020] Draft Resolution adopted by Parliamentary Assembly of council of Europe.
Bundesministerium der Justiz und für Verbraucherschutz, 2013. Straßenverkehrs-Ordnung (StVO). https://www.gesetze-im-internet.de/stvo_2013/index.html# BJNR036710013BJNE005700000
Burianski, M., Theissen, C., 2017. Germany permits automated vehicles. White Case. https://www.whitecase.com/publications/article/germany-permits-automatedvehicles.
Dijksterhuis C, Lewis-Evans B, Jelijs B, de Waard D, Brookhuis K, Tucha O, “The impact of immediate or delayed feedback on driving behaviour in a simulated Pay-As-You-Drive system.” 2015.
Dima, F. (2019). Fully autonomous vehicles in the EU: Opportunity or threat? Master’s thesis, University of Twente.
Docherty, I., et al, (2018) ‘The governance of smart mobility’Transportation Research Part A: Policy and Practice Volume 115, pages 114-125
European Commission 2019 ‘2018 road safety statistics: what is behind the figures?’ Online access here > https://ec.europa.eu/commission/presscorner/detail/en/MEMO_19_1990
Evas, T. (2018). A common EU approach to liability rules and insurance for connected and autonomous vehicles. European Parliamentary Research Service. Brussels.
Fagnant, D., Kockelman, K., 2015. Preparing a nation for autonomous vehicles: opportunities, barriers and policy recommendations. Transport. Res. Part A: Pol. Pract. 77, 167–181.
Ilková, V., & Ilka, A. (2017). Legal aspects of autonomous vehicles: An overview. Proceedings of the 2017 21st International Conference on Process Control, 428–33.
Lee, Hess, ‘Regulations for on-road testing of connected and automated vehicles: Assessing the potential for global safety harmonization’ [2020] Transportation Research Part A: Policy and Practice Volume 136, pages 85-98
Levin and Beene ‘Investigation Concludes Tesla Not at Fault in Self-Driving Car Crash’ Insurance Journal [2017].
Lohmann, M. (2016). Liability issues concerning self-driving vehicles. European Journal of Risk Regulation 2, 335–41.
Marchant, G., & Lindor, R. (2012). The coming collision between autonomous vehicles and the liability system. Santa Clara Law Review, 52(4), 1321–40.
Patti, F. (2019). The European road to autonomous vehicles. Fordham International Law Journal, 43(1), 125–62.
Punev.,A, ‘Autonomous Vehicles: The Need for a Separate European Legal Framework’ [2020] European View Vol 19(1) 95–102
The EU Commission ‘Vision Zero Initiative’ (2021 and ongoing) Accessible here > https://trimis.ec.europa.eu/?q=project/vision-zero-initiative#tab-outline >
The Guardian (2021) ‘Electric cars rise to record 54% market share in Norway.’ Online access at > https://www.theguardian.com/environment/2021/jan/05/electric-cars-record-market-share-norway >.
Wockatz, P., Schartau, P., 2015. IM Traveller Needs and UK Capability Study: Supporting the Realisation of Intelligent Mobility in the UK. Transport Systems Catapult, Milton Keynes.
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[1] Stipulated within article 25 of the GDPR and currently used for the purpose of user data protection, but can be made a legal obligation on behalf of the manufacturer of the CAV to embed a ‘safety measure’ within design of software. [2] Software integrated system, termed as ‘black box’ in car which identifies whether the driver or the system had control at the time of an accident. [3] Article 1(1) Directive 2009/103/EC reads “‘vehicle’ means any motor vehicle intended for travel on land and propelled by mechanical power, but not running on rails, and any trailer, whether or not coupled”. [4] Regulation 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation). [5] What constitutes consent in such circumstances is also an ongoing debate and should be part of this investigation. [6] In such situations, how do we apply Rome I (choice of law) or Brussels Recast (jurisdiction and the recognition and enforcement of judgments)? This can also be a topic of investigation. [7] Article 8, paragraph 5 and Article 13 Convention on Road Traffic of 1968. [8] See Article 8 para 5bis Convention on Road Traffic of 1968.
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