Navigating the Road Ahead: Autonomous Vehicles, Liability, and Insurance
Transport & Insurance Focus
Anand Singh Senior Counsel,Transport & Insurance
Veena Shankar Paralegal,Transport & Insurance
In the rapidly evolving realm of transportation, the United Arab Emirates (the “UAE”) emerges as a pioneer in embracing innovation, particularly with the integration of Autonomous Vehicles (“AVs”) into its transportation infrastructure. Building upon the groundwork laid by Dubai's enforcement of Law No. (9) of 2023 on regulating the operations of AVs in the Emirate of Dubai, the UAE is making significant advances forward. This article aims to explore the current landscape of AVs, the liability aspect and insurance regulations in the UAE.
Globally, the landscape for AV technology is instantly evolving, with numerous countries, including the UAE, being actively engaged in testing and in the implementation.
The Emirate of Dubai has initiated the Dubai Autonomous Transportation Strategy (the “Strategy”). This Strategy envisions a future where 25% of all Dubai’s mobility will be driverless by 2030, while ensuring this Strategy is incorporated into different modes of transportation i.e., taxis and buses.
Emirate of Abu Dhabi unveiled plans for the Smart and Autonomous Vehicle Industries (“SAVI”) cluster nestled in Masdar City. The objectives of this ambitious undertaking aim to position Abu Dhabi as a global hub for smart and autonomous vehicles, driving economic growth, job creation, and investment inflows into the UAE. This initiative seeks to foster innovation and collaboration within the autonomous vehicle sector while developing a tailored regulatory framework for its operation. The SAVI cluster will provide access to funding avenues, streamlined regulatory services, advanced testing and certification facilities, and opportunities for collaboration with academia and research institutions, promising to create an enabling environment for autonomous vehicle development.
In July 2023, the UAE Cabinet has approved the first preliminary national license for self-driving cars, granting it to WeRide, as part of the UAE’s efforts to transform the country's transport sector and move towards a future economy. WeRide holds the license to test all types of autonomous vehicles on UAE roads.
AV technology holds immense potential to enhance road safety by potentially eliminating the majority of fatal traffic accidents, often attributed to human error, making it one of the most impactful public health initiatives in modern history. However, to achieve this, the current regulatory framework has to be revisited to drastic shift in the automotive technology.
A unified federal law governing AVs across the UAE is yet to be implemented. However, Emirates of Dubai has issued Law No. (9) of 2023 on regulating the operations of AVs in the Emirate of Dubai (the “Law”). With the implementation of this Law, all autonomous vehicle in the Emirate of Dubai should be registered with the Road Traffic Authority of Dubai ("RTA”) and comply with the licensing requirements of the RTA. In terms of the insurance requirements, the Law mandates all AVs operating in Dubai to maintain a third-party liability policy issued by a UAE-based company, as per requirements determined by the RTA's Director General.
Prior the issuance of the Law, RTA had issued regulation Decision No. (3) of 2019 Regulating Autonomous Vehicle Testing in Dubai along with Administrative Resolution No. (501) Of 2020 Approving the Conditions, Procedures and Controls for Conducting Test Runs of Autonomous Vehicles in the Emirate of Dubai. Under this regulation the companies intending to run test run for autonomous vehicles in Dubai are required to obtain the permit from the RTA. As part of the permit requirement, the company is required to provide a comprehensive accident and civil liability insurance policy issued by an insurance company licensed to operate in the UAE to cover all damage that may inflict individuals or property.
Considering the federal regulation on operation and use of autonomous vehicle is yet to be issued, the insurance requirement for AV in other emirates of the UAE is unclear. That said, Federal Law No. (21) of 1995 concerning traffic (Road Traffic Law) does mandate all motor vehicles in the UAE to maintain a third-party liability insurance policy to cover the third-party liabilities claim triggered due to the use of the motor vehicle. Therefore, we assume the autonomous vehicle once regulated across UAE would maintain the requirement to hold at least motor insurance third party liability policy.
One of the key challenges associated with insuring autonomous vehicles revolves around determining liability in the event of accidents. Unlike traditional vehicles where human error often plays a central role, accidents involving AVs may result from a combination of factors, including software glitches, sensor malfunctions, or external environmental conditions. This shift raises complex questions about who bears responsibility when things go wrong.
Therefore, the traditional insurance models, which rely heavily on driver behaviour and historical data, may need to be re-evaluated to accommodate the unique risks associated with autonomous technology. Insurers must consider factors such as the reliability of autonomous systems, cybersecurity vulnerabilities, and the potential for hacking or malicious interference. The third-party liability exposure for motor liability policy issued to AV owners heavily depends on the regulation in place.
With Avs, the absence of a human driver creates a “responsibility gap” and raises crucial questions as to who is responsible for the liabilities triggered due to the use of the AV. If there is no human intervention in driving, human cannot be held liable for the damages caused if the vehicle itself was operating according to the manufacturer’s design. The current fault-based liability regimes may leave the human absolved of any liability, with responsibility shifted to automatic driving system. This would impact the injured party as they may face challenges in obtaining the compensation for their damages.
Many countries require the AV car owners to hold at least third-party liability insurance. However, attributing legal and financial responsibility to the owner in accidents due to AV malfunctions or errors may be deemed unjust and, in such cases, the manufacturers should be liable for such malfunction related liabilities. Another approach to determining liability in the event of an accident might involve considering AVs as legal entities where AVs would be regarded as insurable entities, bearing legal and financial responsibility exclusively.
Moreover, the ethical concerns surrounding liability matters emerge in the context of autonomous vehicle (AV) technology. Unlike human drivers who often face ethical dilemmas, including life-and-death decisions, AVs are programmed to make similar choices based on predefined ethical frameworks established by their manufacturers. However, since purchasers of AVs may prioritize their own safety, competitive pressures on manufacturers might not necessarily lead to outcomes that align with a broader utilitarian perspective. Consequently, there may be a necessity for government regulations to standardize the ethical considerations inherent in automated driving system design, ensuring alignment with the overall public interest.
The connection between liability and insurance is closely intertwined, thus relying solely on owners of autonomous vehicles (AVs) to bear liability-based insurance requirements may not adequately safeguard the broader public interest. Regulators must also consider the responsibilities of manufacturers and designers in the design and production of Avs and accordingly assessing their level of liability.
The integration of autonomous vehicles into the UAE's transportation ecosystem holds immense promise for enhancing mobility, improving road safety. However, realizing this vision requires proactive collaboration between insurers, regulators, industry stakeholders, and the public. By addressing insurance challenges, establishing robust regulatory frameworks, and fostering public trust, UAE can position itself as a global leader in the adoption of autonomous technology.
Dubai and Abu Dhabi are the two of the emirates in the UAE who are actively engaged in positioning the country as leaders in the field of autonomous vehicles with focus on sustainable development. The AV landscape in the UAE does presents opportunities for further development.
These include the necessity for the creation of a unified federal law governing AVs across the UAE, as well as the formulation of liability protocols in AV-related accidents, which should consider potential software glitches and technical faults.
For further information,please contact Omar N. Omar. Anand Singh and Veena Shankar.
Published in March 2024
