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One aspect that has been barrier as a hindrance for the adoption of self-driving cars has been liability. For example:

Who is responsible for a driverless car accident?, BBC News, 8 October 2015

Uncertainty over liability for a driverless car crash is seen as one of the biggest barriers to adoption.

Wikipedia describes liability as the legal bound obligation to pay debts, such as damages due to causing an accident.

That means that either:

  • The owner/passenger is liable. S/he pays the insurance premium and if s/he is at fault at an accident, the insurance company pays the damages.
  • The manufacturer is liable. The manufacturer may either get insurance, or self-insure. In either case, the manufacturer has insurance costs. These insurance costs are probably passed onto the owner/passenger.

In both cases, costs for the owner/passenger are the same. If the owner/passenger is liable, s/he will pay less for the car but more for insurance. If the manufacturer is liable, the owner/passenger will pay more for the car but less for insurance. In the end, it's the same cost for the owner/passenger.

If the cost are the same for the owner/passenger either way, then why is the question of liability a legal barrier for the adoption of driverless cars? Why would the aspect of liability require any legal changes?

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    You assume insurance (the rich and corporations may self insure in many jurisdictions), and you further assume the same insurer for the manufacturer and consumer. – user662852 Mar 17 '16 at 16:07
  • @user662852 Good points, and neither assumption is actually necessary for my question. Reformulated without those assumptions. – gerrit Mar 17 '16 at 16:27
  • That's one edit. You assume the cost is the same to the consumer either way; but I don't think that's obvious. Lets say I drive a standard car into a farmers market causing several wrongful deaths. My liability is capped at my ability to pay: my insurance cap and all my assets. Then I declare bankruptcy. Google's liability the same in words but different in the value of their assets. They would need to insure against the worst case (or take a company ending risk) and pay higher premiums if liability accrued to them. – user662852 Mar 17 '16 at 20:02
  • Contrariwise if the self driving car could ever by accident of programming misunderstand the street paint leading up to a farmers market: I personally would never want to indemnify the damage a "Terminator" robot could do. This becomes a technology for the super rich and those with nothing to lose – user662852 Mar 17 '16 at 20:09
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This seems like an economics question more than a legal question.

It seems the legal question underlying your question is "who is responsible when there is an accident involving a self-driving car?". The insurance aspect is a red herring in that they just happen to help the responsible party if the responsible party is insured.

Would it be the owner/passenger of the self-driving vehicle? Unless deemed responsible by statute, simple ownership and presence isn't enough to establish liability.

Would it be the vehicle manufacturer? It could be, if the cause of the accident was a decision engineers made and that was proximate enough to the actual injury. However, this has never been tested in court yet.

That is the legal state of things. My guess about why this is an economic barrier is that no one has certainty about how liability will actually be handled. It just needs to be sorted out. There are many ways to do it. Legislators, courts, and manufacturers just need to agree on one.

  • You write, or the responsible party's insurance company. Either (a) the responsible party is the owner/passenger, or (b) the responsible partner is the manufacturer. In case (a), the manufacturer may oblige the owner/passenger to take full insurance, or in case (b), the manufacturer may purchase full insurance and charge the owner/passenger for it. Different responsible party's, but the responsible party's insurance company would be the same either way. Doesn't that imply that it doesn't matter? – gerrit Mar 17 '16 at 15:07
  • @gerrit I edited significantly, but I see what you're asking in your comment so am glad to answer... Why would the two parties necessarily have the same insurance company? If you're in a place that mandates that, then that seems it is probably a solution in your location. – user3851 Mar 17 '16 at 15:12
  • @gerrit. However, in places I'm aware of, when there is a mandated single-payer insurance company, that mandate is amongst owners or drivers. Manufacturers are not bound to use the same insurance company and the mandated insurance company doesn't even provide general corporate liability insurance. Ford, Tesla, etc. have large, corporate insurers, very different from auto insurance companies. – user3851 Mar 17 '16 at 15:15
  • I think we misunderstand each other. I didn't mean the situation where both parties in the accident have the same insurance company. I meant that the scenario where the manufacturer requires a owner/passenger to be fully insured (owner/passenger liability), or the scenario where the manufacturer is fully insured (manufacturer liability) but charges the owner/passenger, are financially equivalent (insurance company pays). If damages are paid for either way, does it still matter who is liable? – gerrit Mar 17 '16 at 15:18
  • I don't know any situation where a manufacturer can require somebody that buys their thing to get insurance. It matters who is liable because if the driver is liable, the driver's insurance will be out of pocket. If the manufacturer is liable, then the manifacturer's insurance will be out of pocket. I don't know about this hypothetical where the manufacturer forces customers to pay its insurance dues. That doesn't change anything from a legal standpoint. – user3851 Mar 17 '16 at 15:22
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Most highway codes are written in such a way that the driver is liable for any damages, and by implication the driver has to be a person. Liability is regardless of who pays the actual bill, so for uninsured drivers there is still a liability that rest with the driver. The insurance company is not liable, so the insurance company paying for damages that you as a driver is liable for, does not change liability.

What needs to change is the highway codes, so that the owner of the car can be liable rather than the driver of the car. Once the owner of the car is liable, a driverless car can be insured through the fact that the owner can take out liability insurance that would cover regardless of who is traveling in the driverless car.

  • Is the driver liable (in the current situation) even if it can be shown the accident is due to faulty manufacturing (such as non-functioning brakes in a brand new car)? – gerrit Mar 17 '16 at 15:15
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    I think product liability is quite clear, and it does not change whether the the car has a driver or is driverless -- so no reason to complicate the answer with that -- I hope that you are not suggesting that all future accident will be down to product liability, since that would be crazzy talk -- I have some gunshot victims I want you to represent if that is the case. – Soren Mar 17 '16 at 15:18
  • You write that liability is regardless of who pays the actual bill. But what's the difference between (A) the manufacturer is liable, the manufacturer is insured and charges the owner/passenger for the insurance, or (B) the owner/passenger is liable and insured — in both cases, the bill is paid for by insurance. If the bill is paid for, why does liability still matter? – gerrit Mar 17 '16 at 15:21
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    Because I can jail whoever is liable, and insurance does not cover in cases of gross misconduct -- so liability matters, and as you point out the product manefactures has liability as well, but that is regardless of the car is driverless or not. – Soren Mar 17 '16 at 15:23
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    A lot of this is pure nonsense. Yeah, the person who is responsible for the operation of the car is the person who is liable. What implication is there for owner, driver and all that nonsense. What highway codes need to change? Your suggestion won't help. Will my friend be liable if I crash his car while driving? Where there is liability, there is negligence: If the manufacturer of the car screwed up, then they are liable because they were negligent in being responsible for the safety of whoever was operating it - especially if the driver was operating properly. – Zizouz212 Mar 17 '16 at 15:42

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