Dr Nicholas Bevan

Dr Nicholas Bevan
www.nicholasbevan.com

Tuesday, 11 June 2019

WINNING THE UNWINNABLE MOTOR CLAIM

MIB v Lewis


Lunchtime webinar on 19 June 2019 at 13.00 hrs


There has been a programme change to accommodate the ground-breaking implications of last week's Court of Appeal ruling in Motor Insurers' Bureau v Lewis 2019 EWCA Civ 909

Book now via the Association of Personal Injury Lawyers at: https://www.apil.org.uk

In a break with 73 years of jurisprudence, the Court of Appeal has fixed the UK motor insurance industry’s’ privately-owned consortium, the Motor Insurers’ Bureau, with a new autonomous legal obligation to compensate outside the parameters of the Road Traffic Act 1988. 


Serious deficiencies in the Supreme Court’s rulings in Cameron v Liverpool Victoria Assurance [2109] and Pilling v UK Insurance [2019] may be flagged up but a more detailed consideration will be covered in a separate webinar, currently under preparation.









Thursday, 6 June 2019

COURT OF APPEAL DISMISSES APPEAL BY MOTOR INSURERS' BUREAU IN LEWIS


Motor Insurers’ Bureau v Michael Lewis [2019] EWCA Civ 909


The Court of Appeal has ruled that:
  • The Motor Insurers’ Bureau (MIB) is an emanation of the state under EU law.
  • Articles 3 and 10 of the Motor Insurance Directive 2009/103/EC that prescribe the compulsory motor insurance obligation and the role of the compensating body authorised to compensate victims of unidentified and uninsured vehicles are sufficiently clear and unconditional to have direct effect against the MIB.


These findings fix the MIB with a liability to compensate motor accident victims whose compensatory entitlement ought to be guaranteed through compulsory third party motor insurance but who are not due to the UK government’s failure to properly implement the minimum standard of compensatory protection required by the Motor Insurance Directives.

The MIB faces potentially hundreds of claims by individual motor accident victims whose compensatory entitlement have been obstructed or denied due to the government’s longstanding failure to implement basic EU law requirements for motor insurance.

The MIB’s appeal against the first instance decision in Lewis v Tindale & MIB [2018] EWHC 2376 (QB) was resoundingly dismissed.  This is an unanimously endorsed ruling.  In presenting the only reasoned judgment, Lord Justice Flaux, rejected the MIB’s numerous arguments one after the other.

The Court of Appeal has ruled, in decisive terms, that not only does the MIB’s compensatory role under the Uninsured Drivers Agreement 2015 and the Untraced Drivers Agreement 2017 make it an emanation of the state in this context, but it is also pinned with liability to compensate motor accident victims who have been wrongly denied the compensatory guarantee mandated by Articles 3 and 10 of the Motor Insurance Directive 2009/103 due to the government’s  failure to properly transpose its requirements within the Road Traffic Act 1988 and under its private law agreements with the MIB.

Flaux LJ’s involvement might strike some as poetic justice for the MIB, since this ruling overturns his earlier decision in Byrne v MIB [2007] EWHC 1268 (QB) in which he had previously ruled that (i) the MIB was not an emanation of the state so that (ii) the provisions of the Motor Insurance Directives could not have direct effect against it. I have argued over several years, in my New Law Journal articles, that the Byrne judgment was wrong on these points.  First in February 2013 later in more detail in my two-part feature, Putting wrongs to rights, 27 May and 3 June 2016.  I did so again, following the Court of Justice’s ruling in Farrell v Whitty No. 2 (Case C-413/15) [2018] in State Liability: betwixt and between Brexit (Parts 1 and 2) 27 October 2017 and 3 November 2017.  I inferred from the judgment in Byrne that information relevant to the MIB’s close working relationship with the government was withheld from the court and I asserted that the learned judge was also misinformed on the proper approach to determining whether a body is an emanation of the state.  It was noticeable at the appeal hearing in Lewis that Flaux LJ was extremely well informed, which was evident from his timely and apposite interventions.

lewis v MIB; MIB v Lewis; Motor Insurers Bureau; Emanation of the state






































I will be presenting a lunchtime webinar on 19 June 2019 for the Association of Personal Injury Lawyers on the wide-reaching implications of this important ruling. 

The MIB’s exposure to liability extends far beyond the terms of its private law agreements with the Secretary of State for Transport; beyond even the governments failure to ensure that compulsory third party motor insurance extends to private land: it opens up new areas of claim previously thought to be untouched by third party motor insurance and the Road Traffic Act 1988.

I understand that the Court of Appeal have already refused the MIB leave to appeal.  However, the MIB have indicated that they intend to apply to the Supreme Court for permission to appeal, regardless. I think the MIB would be wise to think twice about that. 

If the MIB plan to pursue their empty technical argument that Articles 3 and 10 of the Motor Insurance Directive are insufficiently clear and unconditional to qualify for direct effect then that is likely to oblige the Supreme Court to refer the issue to the CJEU for a preliminary ruling under Article 267 TFEU. The autonomous nature of the EU law motor insurance obligation requires this; it is not something that lies within the Supreme Court’s discretion.  The European Commission and the CJEU are well aware of the UK’s extensive non-conformity with EU law in this area and it so may result in a crystal clear exposition of just how extensive the MIB’s liability is.

The UK remains the subject of a wide-ranging infringement complaint that has lain dormant following the 2016 Brexit referendum.  However, any Article 267 reference is likely to be expedited in the face of an impending Brexit.   

PILLING V UK INSURANCE (part 2)


Phoenix in flames: lessons from Pilling (Part 2)


R & S Pilling t/a Phoenix Engineering v UK Insurance Ltd [2019] UKSC 16



In the first instalment of my commentary on Pilling Part I, see earlier blog, I note that the Supreme Court failed to apply the correct approach to interpreting national implementing law consistently with the objectives of a directive it is supposed to transpose into UK law.  In deciding that it was not possible to ‘read down’ section s145 Road Traffic Act 1988 with a conforming construction that included private property within the geographic scope of compulsory insurance it failed to apply the legal presumption mandated by the Court of Justice of the European Union (CJEU) n Pfeiffer v Deutsches Rotes Kreuz (Case C-297/01) [2004]. This requirement dates back to Wagner Miret (Case C 334/92) [1993] and is set out in Pfeiffer as follows:

‘…when the national court is seised of a dispute concerning the application of domestic provisions which, as here, have been specifically enacted for the purpose of transposing a directive
intended to confer rights on individuals. The national court must … presume that the
Member State, following its exercise of the discretion afforded it under that provision,
had the intention of fulfilling entirely the obligations arising from the directive concerned.’

Pfeiffer’s rule does no more than presume that a member state does not intend to flout its EU treaty obligations, without at least expressing this in clear and unequivocal terms, raises the bar considerably for any finding that a conforming interpretation is contra proferentem (i.e. goes against the grain of Parliament's legislative intentions)

Had the Justices complied with Pfeiffer, as they are obliged under the primacy of EU law to do, then they would have found that this mandatory presumption raises the bar considerably to establishing the contra proferentem exception that it relied on in its deliberations. 

I also express a second concern that in considering what is meant by Article 3 of the Motor Insurance Directive (2009/103/EC) by ‘use of a vehicle’ it did so in apparent ignorance of two recent rulings by the Court of Justice of the European Union. The first of these was delivered by the Grand Chamber and is highly authoritative: Fundo de Garantia Automóvel v Juliana (Case C 80-17) [2018]; the second being BTA Baltic Insurance Company’ AS v Baltijas Apdrošinašanas Nams (Case C 648/17) [2018].  It is abundantly clear that Article 3’s insurance requirement carries a much wider scope for the types of use requiring insurance than the UK’s common law authorities allow for.  This much is evident from the following excerpt from Juliana:

‘41      Therefore, the fact that the Court held, in essence, in the judgments mentioned in the preceding paragraph, that only situations of use of the insured vehicle which fall within the use of a vehicle as a means of transport and, therefore, fall within the concept of ‘use of vehicles’, within the meaning of Article 3(1) of the First Directive or of the first paragraph of Article 3 of Directive 2009/103, may give rise to the insurer being responsible, under a contract of insurance against civil liability in respect of the use of that vehicle, for the damage or injuries caused by the latter, does not in any way mean that the determination of whether there is an obligation to take out such insurance should be dependent on whether or not the vehicle at issue is actually being used as a means of transport at a given time.

42      In the light of the foregoing, it must be held that a vehicle which is registered and therefore has not been officially withdrawn from use, and which is capable of being driven, corresponds to the concept of ‘vehicle’ within the meaning of Article 1(1) of the First Directive and, consequently, does not cease to be subject to the insurance obligation laid down in Article 3(1) of that directive, on the sole ground that its owner no longer intends to drive it and immobilises it on private land.’

A third concern I have with the Supreme Court’s ruling is that it failed to refer this issue, as to what is meant by ‘use of a vehicle’ to the CJEU for a preliminary ruling under Article 267 TFEU. As a court of final appeal, it was the Justices non-discretionary treaty bound duty to do so.

In the second and final instalment of my commentary on Pilling I explain why the three step approach adopted by the court for construing motor policy terms is based on a logical fallacy.

This is the second time in as many months that the Supreme Court has signally failed to apply the rule of law and to deliver justice to the parties in this context.  See my critique of the Supreme Court’s ruling in Cameron v Liverpool & Victoria Insurance [2019] UKSC 6.



Monday, 20 May 2019

PILLING v UK INSURANCE [2019] UKSC 16


Phoenix in flames: lessons from Pilling


R & S Pilling t/a Phoenix Engineering v UK Insurance Ltd [2019] UKSC 16


The first installment of my mini-series on the Supreme Court's decision in Pilling is published in this week's edition of the New Law Journal (17th May 2019). I examine the court's approach to the consistent construction of the Road Traffic Act 1988 and find it wanting.

See my earlier post on this ruling. 







































In next week's installment I consider the Supreme Court's approach to policy construction.

Sunday, 19 May 2019

IS THE MOTOR INSURERS BUREAU PROPERLY ACCOUNTABLE?


At  APIL’s 2019 annual conference I attended Dominic Clayden’s update on the latest developments within the Motor Insurance Bureau and the new IT platform it is developing to handle personal injury claims by unrepresented members of the public.

After hearing the Motor Insurers Bureau’s new CEO declare that the MIB was the Ministry of Justice’s delivery partner for developing the new portal and on viewing his impressive powerpoint organisational schema that reveals the impressive range and variety of different public services it discharges on behalf of the government, I expressed puzzlement that the MIB still denies its status as an emanation of the state in the ongoing appeal in Lewis v Tindale & MIB.  The appeal was heard last week.

I suggested that the MIB has become a mini-ministry responsible for a significant proportion of the Department for Transport and Ministry of Justice’s responsibilities imposed under the European Motor Insurance Directives.  I invited him to consider reforming the constitution of this motor insurer consortium, given its important public service role.  I suggested that it should co-opt onto its board certain special interest groups, such as RoadPeace, and to make the organisation more open and accountable to the general public, who fund its operations through their insurance premiums.

I was not surprised that Dominic Clayden should reject my suggestion out of hand.  However, I was surprised by the lame excuse he gave.  He claimed that its governance was its own private concern and that if claimants choose to use its services or not then that was a matter of choice for them.  This is as obviously wrong as it is disingenuous.

One may choose to go shopping to one of several stores; claimants do not choose to be injured by another’s negligence, nor does the invocation of their legal entitlement to compensation by the only legally recognised route to redress amount to a question of  choice; it is a matter of compulsion; not free choice.

APIL Conference


Last week I attended the annual conference of the Association of Personal Injury Lawyers, of which I am a senior fellow.

It was a pleasure to join the panel to discuss ‘The Impact of Brexit’ with Katherine Deal QC of 3 Hare Court; Sarah Crowther QC of Outer Temple Chambers; Chris Deacon from Stewarts solicitors; Simon Davis, vice president of the Law Society, and Dominic Clayden the new CEO at the Motor Insurers’ Bureau.

Prior to this, Dominic Clayden presented an update on the latest developments within the MIB and the new IT platform it is developing to deal with personal injury claims by unrepresented members of the public.  He revealed that the insurance industry is investing £15m in this new online portal.  This online claims platform will be linked to a call centre.

Although much is still unknown about its precise workings, the MIB has a target of April 2020 for the system to go live.  The new portal’s launch is intended to coincide with the implementation of new reduced scale tariffs on the damages paid for soft tissue injuries sustained in road traffic accident claims, under the Civil Liability Act 2018. It is also intended to facilitate claims by litigants in person once the government’s extends the scope of the small claims track for motor claims valued up to £5,000, also planned for April 2020.

This new portal and these reforms will effectively remove, on some estimates, at least half of the present volume of road traffic accident claims from the current portal where solicitor’s receive modest levels of fixed costs from the insurers of an at-fault party. This will effectively divert a substantial quantity of routine low value civil liability litigation from solicitors practices.  Many view this as the final turn of the screw for the bulk personal injury claims sector that began with the civil justice reforms in 2013.

Listening in to a seminar that updated the membership on the progress being made on developing the new claims portal, I was reminded of the scene from Monty Python’s ‘Life of Brian’ where Michael Palin, solicitously instructs each participant: ‘Straight out; line up on the left, one cross each…’

Wednesday, 15 May 2019

LEWIS V TINDALE & MOTOR INSURERS BUREAU 2019

The appeal in Lewis v Tindale & MIB opens today in the Court of Appeal.

Extract from today's cause list:


THE MASTER OF THE ROLLS' COURT COURT 71
Before LORD JUSTICE HENDERSON
LORD JUSTICE FLAUX and
SIR STEPHEN RICHARDS
Wednesday, 15th May, 2019
At half-past 10
APPEAL
From The Queen's Bench Division
FINAL DECISIONS
B3/2018/2411 Michael Lewis (a protected party by his Litigation Friend Janet Lewis) -v- Tindale and Ors. Appeal of Second Defendant from the order of Mr Justice Soole, dated 14th September 2018, filed 5th October 2018.

This appeal will be livestreamed live via the Courts and Tribunals Judiciary website.  For more information and to view the hearing please click the link below.


This appeal is likely to engender a sense of deja vu in Lord Justice Flaux.  

Twelve years ago, in Byrne v MIB & Secretary of State for Transport  [2007] EWHC 1278 (QB), Flaux J (as he was then)  found that the MIB was not an emanation of the state and this led him to conclude that it was not bound by the direct effect, under EU law, of the provisions of the Motor Insurance Directives.

My independent research, first published in 2012, revealed that the learned judge was not only misinformed on the legal test for establishing state liability but he was also misled about the true nature and status of the MIB and its close working relationship with the Department for Transport as well as to the degree of control exercised by the latter over the MIB's compensatory role. 

It should not be forgotten that Flaux J’s judgment delivered justice to the claimant.  He found that the MIB’s strict three year time limit for applying to the MIB under the scheme for untraced drivers had been unlawfully applied against a child.  His Francovich award against the minister was later upheld by the Court of Appeal ([2008] (EWCA Civ 574), and unanimously so, it was not necessary to revisit his findings on direct effect.

My critique of the Byrne ruling is set out in my New Law Journal article: Putting wrongs to rights (Part 2), from 3 June 2016. 

The case is even stronger now, after the Court of Justice's ruling in Farrell v Whitty (no. 2) [2017]  Case C413/15, fixed  the Irish MIB with the state’s liability (‘vicariously’ so to speak): to provide redress for motor accident victims who ought (under EU law) to benefit from the compensatory guarantee mandated by the Motor Insurance Directives but who are not - due to the Irish government’s failure to fully implement that law within the Road Traffic Act 1961.  

The Irish MIB was incepted and is governed under almost identical principles to the MIB in the UK.  There are numerous disparities between the minimum standard of compensatory protection mandated by the European Motor Insurance Directives and the UK's implementation of that law within Part VI of the Road Traffic Act 1988.

This ruling had a profound influence in the first instance decision in Lewis.  The implications of  Soole J's decision being upheld in this appeal will be profound.







































For my analysis on the implications of Farrell (no. 2) see my mini-series of articles in the New Law Journal:  State liability: betwixt & between Brexit (Parts 1 & 2), 27 October and 3 November 2017






Thursday, 9 May 2019

NEW WEBINAR: WINNING THE UNWINNABLE MOTOR CLAIM

LEWIS V TINDALE AND THE MOTOR INSURERS' BUREAU 2019

The MIB's appeal against the landmark first instance decision in Lewis v Tindale & MIB is listed for a 1.5 day trial in the Court of Appeal in mid May this year.

The Court of Appeal's decision will be something of a moment of truth for me as the first instance decision was largely based on my earlier research.  See my earlier posts and my New Law Journal articles, over several years, that have advocated for the MIB's liability to compensate victims falling through the gaps left by the government's longstanding failure to implement the EU Directive 209/103/EC on motor insurance properly.

FORTHCOMING WEBINAR ON LEWIS V TINDALE AND MIB (and more) 19 June 2019.

The webinar will consider the Court of Appeal's judgment and, if time, it will also explain why two recent Supreme Court rulings are badly flawed and what remedies are available.





PILLING V UK INSURANCE 2019 - ANOTHER MISRULING

R & S Pilling t/a Phoenix Engineering v UK Insurance Ltd [2019] UKSC 16


This is the second time in as many months that five justices of the UK Supreme Court have misdirected themselves on European law and reached a decision based on a line of reasoning that fails to withstand close scrutiny.  


See my earlier blog on Cameron v Liverpool Victoria Insurance [2019] UKSC 6 and my New Law Journal feature from 15 March 2019.

  
The Pilling case featured a a dispute between a motor insurer and a public liability insurer as to who was liable to indemnify the owners of business premises for an extensive fire.  The conflagration was caused by an attempted DIY welding repair to an employee's privately owned car.  This set his car ablaze.  The fire then spread; gutting the employer's business premises. The key issues were:

  
  • whether a repair undertaken to return a car to immediate road-use after it had failed its MOT was a 'use of a vehicle' that is required by law to be covered by compulsory third party motor insurance.


  • whether UKI's motor policy that certified that it conformed with the UK law insurance requirement, and which was ambiguously worded, should be construed to confer such cover.


  
The Court of Appeal held that  the motor insurer was liable indemnify the claim but the Supreme Court disagreed; unanimously.


As to the first issue, the Supreme Court misapplied the EU law that governs how national courts should set about construing UK implementing law, in its approach to interpreting the wording of the Road Traffic Act 1988.  This Act regulates compulsory third-party motor insurance in the UK and it is supposed to fully implement EU Directive 2009/103/EC on motor insurance. The Supreme Court also failed to consider two recent and highly relevant (and binding) Court of Justice rulings on ‘use of vehicles’ or to note that there is also an ongoing reference to the Court of Justice on a similar point.

On the second issue, the rationale for the three step approach devised by the Supreme Court to policy construction is badly flawed.

The first instalment of my two part feature criticising this decision is due to be published in the New Law Journal next week. 


The Pilling ruling also has a wider significance.  It provides a useful insight into how ‘EU-derived domestic legislation’ is likely to be interpreted by our courts under the EU Withdrawal Act 2018.

Friday, 15 March 2019

THE SUPREME COURT RUING IN CAMERON V LIVERPOOL IS UNJUST

Cameron v Liverpool Victoria Insurance [2019] UKSC 6






In Cameron v Liverpool  Victoria Insurance the Supreme Court upheld an appeal by a motor insurer (supported by the Motor Insurers’ Bureau as an intervening party) against a Court of Appeal ruling that allowed a personal injury claim to proceed against an unidentified and untraced driver. 

In a majority decision, the Court of Appeal permitted Ms Cameron's claim (originally against the registered keeper of the vehicle) to be amended to substitute the keeper, as first defendant, with the unidentified driver responsible for causing the accident.  Permission was also given for the unnamed driver to be identified in the proceedings by a description of the vehicle driven and the accident date, place and time.  The court had also ordered alternative service of the amended proceedings on the vehicle’s insurer and gave judgment against the unnamed driver; noting that the insurer would settle the outstanding judgment.

The Supreme Court based its unanimous decision primarily on time honoured natural justice considerations that require a party to be served with proceedings which enable a party at least the opportunity of being heard by the court.  It ruled that as alternative service on the insurer was unlikely to come  to the defendant’s attention, the claim could not proceed as a civil action.  

The justices opined that the claimant’s proper course should have been to apply to the compensatory scheme managed by the Motor Insurers’ Bureau under the terms of the Untraced Drivers Agreement 2003.

This ruling restores a long-established practice that predates the UK’s accession to the European Community whereby all untraced driver claims are processed under the MIB’s Untraced Drivers Agreement schemes.

Unfair


In my latest New Law Journal feature, I explain why the Supreme Court’s decision fails on its own terms.  I argue that even if one disregards the crucial EU law considerations, the natural justice implications of the court’s decision, on whether to exercise its discretion to authorise the amendment and to permit or waive service of the proceedings, fall heavily in the claimant’s favour.  

I contend that the evidence shows that Ms Cameron was the innocent victim of a ‘hit and run’ driver who, after colliding with her car (with enough force to write it off and injure her) then went on to hit a second vehicle, before fleeing the scene.  \I argue that it is inconceivable that the driver was ignorant of the fact that he had at the very least caused some actionable damage.  It is equally implausible to assume that he would not have been aware that had he stopped, he would have been identified and later face a civil action. Therefore, it seems likely (highly probable even) that his act of making-off was intended to evade civil proceedings that could then be readily anticipated (as well as the possibility of criminal proceedings: either for the careless driving or for driving whilst uninsured).  Unfortunately, the Supreme Court thought differently.

Wrong in law

Leaving to one side these natural justice considerations, I believe that the Supreme Court’s ruling is fundamentally flawed because the learned justices misinformed themselves about the relevant law.

For example:
  • At para 5 of the judgment it states in robust terms that there is no direct right of action against insurers for the underlying liability of its assured under the UK compulsory insurance regime, when setting the scene for the exercise of its discretion (on whether, in a civil action, a court should order alternative service or to dispense with service entirely against an unidentified driver). The Supreme Court overlooks the fact that EC Rights Against Insurers Regs 2002 provides just such a remedy.
  • At paras 4, 5 and 27, the court effectively asserts that the allocation of claims to the MIB against unidentified drivers of identified and insured vehicles is consistent with the Motor Insurance Directive 2009/103/EC.  This is wrong. It ignores no less than three CJEU rulings (Churchill, Csonka and Fidelidade) (see my earlier posts) that explicitly prohibit such claims from being allocated to the compensating body (which in the UK this is the Motor Insurance Bureau) – where a policy of insurance is in place for an identified vehicle.  This is because the protective purpose of the Directive requires the compensatory provision to be made by the insurer direct.  
Given that the MIB had no legal entitlement or authority to handle these claims under directly applicable EU law, Ms Cameron has been unjustly denied her entitlement by the Supreme Court justices.


I cannot think of another Supreme Court ruling that has got the basic applicable law so badly wrong. 

My three-page New Law Journal feature is published in the 15 March 2019 edition, in the Insurance Legal Update section.





Monday, 4 February 2019

Answer to Consultation Question 40

Law Commission Consultation on Automated Vehicles



Consultation Question 40 (Paragraphs 9.6 - 9.37)

We seek views on whether it would be acceptable for a highly automated vehicle to be programmed never to mount the pavement.

Answer:  

One of the main benefits of advanced automation is its promise of improved independent access to private transport for the elderly and the handicapped and cheap door to door delivery of goods. 


By shoehorning this new statutory form of product liability into the Road Traffic Act’s archaic and limited scope, both in terms of its geographic reach and the types of vehicles covered by s2’s new direct liability, the government has needlessly exposed children and other vulnerable individuals from the protection of the compulsory insurance regime.  It is hard to identify any coherent public policy objective that is served by this anomaly.  As indicated above, unless ADS are prohibited on private property (which is clearly undesirable), the current geographic restriction to roads and public places not only breaches EU law (Article 3 of Directive 2009/103/EC on motor insurance) but it also lacks vision as pavements and private places are likely to feature as points of embarkation or destination in many journeys featuring ADS.

Should highly automated vehicles ever exceed speed limits?

Answer:  
No comment

Answers to Consultation Questions 8 - 15

Law Commission Consultation on Automated Vehicles 


Consultation Question 8 (Paragraphs 4.102 - 4.104)

Do you agree that:
(1)               a new safety assurance scheme should be established to authorise automated driving systems which are installed: 
(a)  as modifications to registered vehicles; or
(b)  in vehicles manufactured in limited numbers (a "small series")? 
(2)               unauthorised automated driving systems should be prohibited?
(3)               the safety assurance agency should also have powers to make special vehicle orders for highly automated vehicles, so as to authorise design changes which would otherwise breach construction and use regulations?
Answer: 
Yes to all.


Consultation Question 9 (Paragraphs 4.107 - 4.109)
Do you agree that every automated driving system (ADS) should be backed by an entity (ADSE) which takes responsibility for the safety of the system? 
Answer: 
Yes

Consultation Question 10 (Paragraphs 4.112 - 4.117)
We seek views on how far should a new safety assurance system be based on accrediting the developers’ own systems, and how far should it involve third party testing.
Answer: 
No comment


Consultation Question 11 (Paragraphs 4.118 - 4.122)
We seek views on how the safety assurance scheme could best work with local agencies to ensure that is sensitive to local conditions.
 Answer: 
No comment

CHAPTER 5: REGULATING SAFETY ON THE ROADS A new organisational structure?
Consultation Question 12 (Paragraphs 5.30 - 5.32)
If there is to be a new safety assurance scheme to authorise automated driving systems before they are allowed onto the roads, should the agency also have responsibilities for safety of these systems following deployment? 
If so, should the organisation have responsibilities for: 
(1)               regulating consumer and marketing materials? 
(2)               market surveillance?
(3)               roadworthiness tests?
We seek views on whether the agency’s responsibilities in these three areas should extend to advanced driver assistance systems.
 Answer: 
Yes and much more (and this should be addressed as a matter of considerable urgency) given what is said at paragraph 3.12 of the LC report.  

I am awaiting a Freedom of Information Act request  on the number of Tesla Model S currently on our roads.  Some online sources indicate that this could be in excess of 2,000.  Tesla plans to launch its new mid range Model 3 into the UK market this year, presumably in greater numbers.See my concerns about the danger posed by driver assist technology in my response to Q7.

Driver training
Consultation Question 13 (Paragraphs 5.54 - 5.55)
Is there a need to provide drivers with additional training on advanced driver assistance systems? 
If so, can this be met on a voluntary basis, through incentives offered by insurers?
 Answer: 
Yes. 
No.  Guidance should continue to be provided by the government within the Highway Code.  This is a responsibility that should be delegated to commercial interests.  The Highway Code needs to be updated to accommodate the skills and standards appropriate to this new technology.  Every driver skill, standard or theory that is safety critical should be incorporated within the driving test syllabus be subject to mandatory testing.  It may be necessary to issue new vehicle categories for the driving licence.

A failure to address this urgent need to educate, test and licence emerging levels of automation as well as advanced automation would not only be anomalous but it would compromise public safety.
             
Accident investigation
Consultation Question 14 (Paragraphs 5.58 - 5.71)
We seek views on how accidents involving driving automation should be investigated.  We seek views on whether an Accident Investigation Branch should investigate high profile accidents involving automated vehicles? Alternatively, should specialist expertise be provided to police forces.
 Answer: 
This is not my field of expertise but my experience of local police forces is that their standard of investigation is variable. 
A national government agency should be incepted, possibly along similar lines tothe Air Accidents Investigation Branch.  A single authoritative national agency would be best placed to apply a consistent approach to the same standard.  A national body is needed to develop a strategic view as well as a specialist knowledge in ADS, motor engineering, data recording and collection et cetera. This might be a suitable role for a dedicated sub-division of the proposed Safety Assurance Agency. 
It might be sensible to restrict the agency's involvement to serious accidents involving an injury where a police report has confirmed that an automated vehicle was present at the scene of the accident. It would probably be necessary to impose a strict time limit to ensure prompt notification, if the accident data is to be preserved.

Setting and monitoring a safety standard
Consultation Question 15 (Paragraphs 5.78 - 5.85)
(1)               Do you agree that the new safety agency should monitor the accident rate of highly automated vehicles which drive themselves, compared with human drivers?
(2)               We seek views on whether there is also a need to monitor the accident rates of advanced driver assistance systems.
 Answer: 
Yes to both (1) and (2).

Sunday, 3 February 2019

Answer to Consultation Question 18


Law Commission Consultation on Automated Vehicles

Civil liability of manufacturers and retailers: Implications


Consultation Question 18 (Paragraphs 6.61 - 6.116)

Is there a need to review the way in which product liability under the Consumer Protection Act 1987 applies to defective software installed into automated vehicles? 

Draft Answer: 




Yes.

Preliminary note on the question’s scope

I infer from the Law Commission’s limited terms of reference, that this question is primarily concerned with secondary claims brought by motor insurers under s5 AEVA 2108; not the primary accident victims whom the entire edifice of Part VI Road Traffic Act 1988 and S2 AEVA 2018 is supposed to benefit.  In which case, strictly speaking this question only concerns those vehicles likely to be listed under s1, i.e. high or full automation – (see LCCR 240 para 2.55 and footnote 83).

Yet the Law Commission expressly concedes the need to widen the scope of its consultation (see para 1.14) and this much is clear from some of its questions, such as Q6, 7,8 and 12.

The Consumer Protection Act 1987’s - fitness for purpose for insurers


The Consumer Protection Act 1987 (CPA) fully implements the Directive 85/374/EEC on Product Liability and can be easily revised after Brexit should need arise. Two important concerns, raised in para 3.9 of the Government Response to its consultation on Advanced Driver Assistance Systems and Automated, from January 2017, are that this legislation might be inadequate for insurers wishing to invoke their statutory right of recoupment, because (i) product liability is optional, and (ii) no statutory minimum amount of cover is set.  Against that, it should be acknowledged that motor insurers are in an advantageous commercial position to limit their exposure to risk by negotiating effective reimbursement guarantees from manufacturers and suppliers, in return for offering competitive (and from the ultimate consumer’s perspective, affordable) premiums. Manufacturers who fail to incept a Volvo style compensatory guarantee are likely to find that the cost of insuring their vehicles might make their products unattractive to consumers.  Problems will nevertheless arise where causation is disputed or needs to be apportioned.  However, the motor insurance industry is best placed to confront these challenges as it has the necessary expertise and resources as well as a strategic overview that few private individuals could hope to command.  It is conceivable that the MIB could co-ordinate collective actions against manufacturers and or develop a specialist expertise in these claims, as opposed to individual insurers. The government should ensure that its regulation of motor insurers ensures that the industry has taken all appropriate measures to safeguard it exposure to insolvency and to guarantee that victims recover their full compensatory entitlement. This is not something that can safely be left to the industry to self-regulate with complete autonomy.

The Consumer Protection Act 1987’s - fitness for purpose for individual claimants


If the strict liability provisions of s2 are to be confined to highly and fully automated vehicles then this discriminates against victims of what are arguably even more dangerous forms of automation that are already on our roads or which will shortly be introduced (SAE L2 & 3 automation).

The UK’s adversarial civil justice system, whilst striving to ensure fairness and to put individual parties on an equal footing on a case by case basis, has serious shortcomings when it comes to an unequal contest between private individuals and international corporations.  Fixed recoverable costs and the proportionality rule shift the tactical advantage heavily to the advantage of a corporate opponent who can afford to adopt untenable or unreasonable stances in individual cases if it serves its wider commercial interests.  Private individuals generally do not have the same expertise and usuallyt nothing approaching a parity of resources. Accidents caused by existing and close to market levels of vehicle automation (SAE L2 & 3) are likely to prove to be fiendishly technical, time-consuming and costly. Modest value claims are likely to be disproportionately expensive to investigate, let alone litigate, and so many will be uneconomic to pursue. The effective abolition of public funding in this area exacerbates these inequalities.

The limited scope of the strict liability provisions of the 1987 Act is unlikely to assist victims in many of these cases. I consider some of its deficiencies in my New Law Journal article, Driverless Vehicles: a future perfect? (Part 2) 30 November 2018.  These include:
·         The imprecision and subjectivity of the definition of ‘defect’ , based as it is on the reasonable expectations of the public at large test is too nebulous a measure and subject to change. Accidents contributed or caused by semi-automated / transitional stages of automation will attract great public interest in the media, which risks lowering the public’s expectations in this regard;
·         The exclusion of wear and tear;
·         The continuing uncertainty as whether all types of software are covered;
·         The ability of manufacturers to issue lengthy disculpatory warnings in their manuals and literature, in the full knowledge that it is likely to be ignored by some (if not many) consumers;
·         The relative ease with which a manufacturer like Tesla will be able to deploy the s4(e) defence that applies to cutting edge technology;
·         The government’s failure to regulate mandatory PL cover and minimum levels of liability
·         The ten year long stop limitation.

Furthermore, in addition to the inadequacies of this legislation, an individual claimant who is unable to establish strict liability under the 1987 Act will be faced with a forbidding evidentiary burden in establishing what was the true cause of the accident.  It is conceivable that one of many individual component manufacturers would be responsible for a systems failure.  It is equally conceivable that the software was susceptible to hacking by a malicious third party or that the cause of accident was contributed to the driver / user’s negligence . These are all unknowns (i.e. litigation risk) that undermine legal certainty and the prospect of an accident victims recovering his or her proper compensatory entitlement.

With all due respect, the inequality in access to justice that pervades the UK’s civil justice system  is not something that any responsible government should ignore. Nor should it overlook the fact that by licencing these evolving levels of automation for use on roads it has actual or at least constructive knowledge of the correlative risks associated with their deployment. The government has a moral obligation to ensure not only that the vehicles it licences are fit for their intended use but also that victims are fairly treated and fully compensated if and when something goes wrong.  The present artificial dichotomy been advanced automated vehicles at SAE Ls4 & 5 and all other forms of automation lacks moral coherence or other justification.

It is perhaps appropriate to note the government’s longstanding failure to fully implement Article 3 of Directive 2009/103/EC which requires any compulsory motor insurance for any civil liability (not just the personal fault of the user / owner / insured) and which extends to a much wider class of vehicle as well as private premises.

Urgent steps need to be taken to safeguard the interests of accident victims (which need to be given at least the same attention as the insurance industry).  The most obvious solutions would be either to reform the CPA 1987 or to bring driver assist and conditional automation into the scope of the strict liability provisions of the AEVA 2018.