CONTRIBUTION CLAIMS AGAINST THIRD PARTIES UNDER THE AUTOMATED AND ELECTRIC VEHICLES ACT 2018
The keystone of the legislative scheme under the Automated and Electric Vehicles Act 2018 (AEVA 2018) is Section 2(1) which provides that an insurer is liable for any damage caused when damage is ‘caused’ by an automated vehicle driving itself on a road or other public place in Great Britain (assuming, of course, that the said vehicle had a valid policy of insurance in place at the material time).
A discussion of the meaning that the Courts are likely to ascribe to the term ‘caused’ in the context of that provision is outside the scope of this article, although needless to say it is suspected that this will be the subject of much first instance dispute that will eventually give rise to appellate case-law once there are vehicles on the road that are ‘driving themselves’ (which Section 8(1)(a) clarifies as referring to operating in a mode in which they are not being controlled and do not need to be monitored by an individual). Section 8(3)(c) certainly suggests that there is scope for causation to be interpreted quite widely (with the corollary being quite wide scope for disputes) given that it provides that “a reference to an accident caused by an automated vehicle includes a reference to an accident that is partly caused by an automated vehicle.”
It is natural, therefore, that a lot of insurers may well be faintly terrified by the potential breadth in scope of Section 2 liability. This article seeks to explore the extent to which the insurer is able to ‘pass on’ that liability to another party by virtue of a contribution claim against a third party or parties.
Contribution claims against third parties are likely to be complicated both conceptually and factually. The basis for bringing such a claim is set out in Section 5(1) of the AEVA 2018 which warrants reproduction in its entirety:
5. Right of insurer etc to claim against person responsible for accident
(a) section 2 imposes on an insurer, or the owner of a vehicle, liability to a person who has suffered damage as a result of an accident (“the injured party”), and
(b) the amount of the insurer’s or vehicle owner’s liability to the injured party in respect of the accident (including any liability not imposed by section 2) is settled,
any other person liable to the injured party in respect of the accident is under the same liability to the insurer or vehicle owner.
The mechanism that gives rise to the claim is set out in Section 5(2) which provides that for the purposes of Section 5, the amount of the liability is settled either at the point of judgment or the point at which an enforceable compromise is reached (which, for the avoidance of doubt, could be an arbitral award). This means that, at least in theory, the potential cause of action against the third party is an entirely separate claim that accrues at the point at which the insurers’ liability to the injured person is crystallised by the primary litigation.
It is suspected that Courts are likely to deal with Section 5 claims alongside Section 2 claims in many cases where they are raised, as it is easy to envisage situations where the prospective third party defendant may wish to raise issues pertinent to the defence of the primary claim. Moreover, most judges are likely to be amenable to an argument that is not the best use of Court resources to have two separate trials arising from substantially the same facts. It would clearly be unjust for a prospective third party to be bound by reference to agreed or established facts in initial proceedings in which they had played no role.
The other side of the coin, which may well apply in claims with a complicated and highly contested product liability element but a straightforward CAV insurance element, is that Courts may well be unwilling to countenance extremely complex first instance trials becoming the norm due to the limited availability of scarce Court resources. In such situations, it would no doubt be argued that it would be disproportionate for a claimant to be a party to what was effectively a dispute between their insurer and a third party company, particularly if the same issues were raised in multiple cases. One suspects that in practice the determination of this point will be akin to consideration of when it is appropriate to deal with liability as a preliminary issue in a ‘split trial’ in a current personal injury claim. The view of the Courts upon when to allow this may well be determined by the perceived likelihood of either or both elements of the litigation being compromised out of Court.
The architects of Section 5 were careful to ensure that a claim under the section should not be treated as a ‘contribution’ claim for an ‘indemnity’ of the type that any road traffic lawyer will be very familiar with. Section 6(5) of the AEVA makes clear that an insurer or vehicle owner who has a right of action by virtue of section 5 does not have a right to seek a contribution pursuant to the Civil Liability (Contribution) Act 1978. Whilst it is possible that the Courts may be persuaded in due course to draw an analogy with case-law under the 1978 Act, this is by no means a given in a situation where it would have been eminently possible to incorporate the existing statutory regime (as Section 3 does in respect of contributory negligence).
In practical terms, this will also mean that it will not be possible to simply join a third party to the same proceedings as a ‘Part 20 Defendant’, as the current wording of CPR 20.6 refers only to ‘an additional claim for contribution or indemnity’ which is specifically excluded by the Act. I would not be at all surprised, however, if this wording were adjusted once claims pursuant to Section 5 of the AEVA start finding their way before the Courts.
The limitation period in respect of a Section 5 claim is set at two years from the date that the right of action accrued (i.e. the date of judgment/settlement/arbitration) by way of the new section 10A(1) of the Limitation Act 1980 that was inserted by Section 20 of the AEVA and paragraph 9 of the accompanying Schedule. It is important to note that this is different from the three-year primary limitation period provided for in the new Section 11B(2) of the Limitation Act 1980.
It is suggested that there are three separate categories of claims against third parties that are likely to arise under Section 5:
- A claim against another human involved in the accident;
- A claim against another automated vehicle involved in the accident; and
- A claim against a CAV designer or manufacturer.
A Claim against another Human
It is most likely that such a claim would arise in situations where there has been another person or persons involved in the accident, e.g. a pedestrian, cyclist or other driver. It is anticipated that this section may be used quite a lot in the early years of automated vehicles on British roads when they are likely to start in a significant minority and will thus inevitably come into conflict with manually operated vehicles. The current legislative schema will also invariably give rise to claims in respect of initial Level 3 CAVs that have transitions between ‘User in Charge’ and automated modes that are outside the scope of this article.
As with all of these types of potential claim, it is possible to envisage large amounts of complexity on the facts of any given case. However, the legal framework for bringing such a party into proceedings in order to determine those disputed facts is a fairly straightforward one.
A Claim against another Automated Vehicle
The framework is more complicated in a situation where the insurer is contemplating bringing a Section 5 claim against another automated vehicle owner or insurer. It may be felt that such a claim is impermissible due to the conscious decision to exclude ‘contribution’ claims from the AEVA schema. However, it is suggested that Section 2(7) could be used to support such a claim being allowed when it states, “The imposition by [section 2] of liability on the insurer or vehicle owner does not affect any other person’s liability in respect of the accident.”
Further, Section 8(3)(a) provides that a reference to an accident should be interpreted as applying to ‘two or more causally related accidents’, e.g. in the context of a multi-party or ‘concertina’ collision. The Act allows the claimant to only choose to pursue only one defendant in that scenario on the basis that they were ‘party responsible’. It is difficult to see a better mechanism for enabling adjudication upon competing liability arguments in a dispute arising from a collision involving two or more automated vehicles- it surely cannot be that the injured claimant’s decision which one of them to sue could preclude a party from being able to argue their case before a Court? The situation is probably the same as existing multi-car collisions, i.e. the claimant can choose who to sue, but runs the risk of under-compensation (including receiving no compensation) if the wrong party or parties have been pursued.
A Claim against a CAV Designer or Manufacturer
It is suspected that this may well end up being the most common situation in which a third party is involved in a Section 5 claim. The starting point for many insurers will be that the technology underpinning automated vehicles is intended to create a situation where, absent operator error, very few road traffic collisions should ever occur. It is anticipated, however, that such a starting point is unrealistic, even if placed in the context of a hypothetical future time in which automated vehicles have completely displaced manually operated vehicles on British roads.
There are a myriad of possible arguments that could be pursued in appropriate cases including, but not limited to, poor design of an automated vehicle, defective software, inadequate manufacturing or testing, failure to adhere to industry standards, failure to provide sufficient instructions and guidance to enable to safe use of the control system, negligent certification and failure to recall a defective product.
The availability of appropriate evidence to enable the Court to adjudicate upon the particular dispute in question in any given case (or type of case) is a topic which I suspect will give rise to large amounts of discussion and eventually litigation in itself. Assuming that sufficient evidence has been successfully martialled to pursue a case (and in that regard there is nothing in the AEVA scheme to exclude the operation of CPR 31.16 dealing with pre-action disclosure or CPR 31.17 dealing with non-party disclosure), it is then necessary to consider the logistics of doing so.
The AEVA does not provide any separate and specific regime for claims where liability is alleged against a vehicle designed or manufacturer, even in a situation where such liability may be admitted. This means that, in practice, the majority of claims are likely to be brought pursuant to the Consumer Protection Act 1987, whether in its existing form or amended or succeeded by an alternative. In Chapter 9 of The Law of Driverless Cars (2nd Edition) it was suggested that the current product liability laws will require reform in order that they sit better alongside the AEVA regime. I would agree wholeheartedly with this suggestion, and would venture that if the same does not take place before actions of this nature find themselves in the Courts then it is likely that the appellate judiciary will invite Parliament to intercede.
It is also likely that Section 5 claims will be pleaded pursuant to common-law principles in breach of contract or tort, at least in the alternative. Donoghue v. Stevenson  AC 562, the seminal decision which gave rise to the advent of the modern law of negligence, was itself a product liability claim (albeit prior to the enactment of a statutory product liability regime). It will be interesting to see how the legal principle that manufacturers have a duty to the ultimate consumer of their product that developed in response to a decomposed snail finding its way into a bottle of ginger beer will be applied in the context of robots and artificial intelligence.
Section 5(1) terms the liability as ‘any person liable to the injured party in respect of the accident’, which appears to be worded to deliberately widen the scope from merely tortious claims (the liability imposed by Section 2 is tortious in nature). Breaches of express contractual terms are outside the scope of this article. One area that it is suspected will be fertile for exploration is that of statutory implied contractual terms, which imply into the contract that the product in question is safe, durable, of satisfactory quality and fit for the purpose for which they are commonly supplied. There is ample case-law available to assist with the interpretation of the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982, whereas there is perhaps more scope for arguments about interpretation pursuant to the Consumer Rights Act 2015 (albeit that the same is applicable to consumers only).
Contributory negligence claims are outside the scope of this article, but I mention them in passing to highlight a topic that will no doubt warrant a great degree of further consideration and discussion in the future.
Section 3 of the AEVA provides that contributory negligence claims shall be dealt with pursuant to the Law Reform (Contributory Negligence) Act 1945, i.e. by the same regime by which contributory negligence reductions are sought in standard road traffic claims. This is, therefore, very different to contribution claims against third parties where the legislation expressly excludes the operation of the existing 1978 Act. Section 3(2) confirms that the liability can be extinguished entirely when the claimant’s negligence is total (unlike in standard claims where case-law such as Pitts v. Hunt  3 All ER 344 confirms that contributory negligence could not be assessed at 100% pursuant to the 1945 Act).
I suspect that Section 3 of the AEVA creates a situation where contributory negligence claims pursuant to the Act are very straightforward in legal/conceptual terms, but no doubt incredibly complicated in many of the real-life factual situations that will be expected to arise. There is significantly more scope for exploring the negligence of the ‘operator’ of a CAV when compared to the ‘driver’ of a traditional vehicle, e.g. were all instructions followed, was the software kept up to date, could or should the human operator have taken back control of the CAV from the automated system etc. There is also the thorny issue of the standard of care that should be applied in contributory negligence when pitting human standards against those of a robot in an accident between a CAV and a traditional vehicle.
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