Is the owner of the vehicle liable for accidents as well as possible malfunctions, even if that individual or entity was not in control of the vehicle? Or will the manufacturer of the vehicle be liable, whether or not the vehicle malfunctioned?

A view from abroad

The Japanese government's Council on Investments for the Future met last week and issued a proposed set of guidelines regarding how to assign such liability. Japan hopes to set regulatory and legal direction before the cars become mainstream.

A key issue is the third level of automation, where the vehicle is capable of operating on its own under certain situations with a driver present. This third level is where the vehicles in both the Arizona and California vehicles were operating.

Japan's proposed guidelines make the owner liable for accidents that occur while the vehicles are operating autonomously. These vehicles will be covered by standard insurance. The manufacturers will be liable only if there is a clear flaw in the vehicle's autonomous system.

In order to determine whether or not the vehicle malfunctioned, autonomous vehicles will be required to have recording devices that log location, steering and operational status of the autonomous driving system.

The Japanese guidelines also indicate that hacking of autonomous vehicles and any resultant damages will be considered the same as theft, as long as vehicle owners take proper security measures and keep the systems updated as per the manufacturer's instructions.

Another distinction in Japan is, the country's road and traffic laws are based on the Geneva Convention on Road Traffic, which assumes human involvement.

Closer to home

This is different from how the United States has been looking at the autonomous vehicle liability issue as some domestic manufacturers have already indicated that when the vehicle is in autonomous mode, they will accept liability for an accident.

However, in the Tesla crash, where the driver was aware that the system was not acting correctly at a particular location, Tesla has stated that because the owner knew of the issue and should have acted to prevent the accident, its vehicles was not fully autonomous.

Conventional wisdom

Autonomous vehicles were not contemplated when the Geneva Convention was established in 1949.

It was replaced by the Vienna Convention on Road Traffic in 1968; the Vienna Convention was put in force on May 21, 1977 for signatory countries.

The Convention was designed to facilitate international road traffic and increase safety by establishing standard traffic rules in the participating countries. All of Europe, Russia, Japan, and parts of Africa and South America participate in the treaty.

It will be interesting to see how autonomous vehicles are handled by the Convention once they become more popular.

Meanwhile, the insurance industry is merely at the beginning of making a final determination of liability when autonomous vehicles are involved.

See also:

JD Power study shows the public split on driving in autonomous vehicles

The shift to autonomous vehicles means opportunity for insurers