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Should there be a legal liability fund to compensate victims of driverless car accidents?

June 30, 2016 by Steven M. Gursten

SAFE calls for creating ‘U.S. Legal Liability Fund’ for self-driving car accidents, similar to compensation fund for vaccine injuries


In light of the tragic news this week about the fatal crash of a Tesla driverless car, which resulted in the death of the car’s owner, the following question becomes even more pressing:

Should there be a legal liability fund to compensate people who have been injured in driverless-car accidents?

A legal liability fund to compensate accident victims of driverless cars is something I’ve been calling for on the pages of this auto law blog for at least the last several years. Many accident attorneys may not like it, but such a fund seems the best solution to paving the way to widespread adoption of this technology on our roads while still protecting the smaller numbers of people who will be killed or injured by autonomous, driverless cars.

I should quickly state my qualifications to even write about this issue.. As of today, I’m one of the few attorneys in the entire country to talk at legal seminars about driverless technology and what the future will look like, including how tort liability will likely look in a world of driverless cars.   I’ve long called for a broad victim fund, similar to what we have today to protect the very small number of people who are injured or killed by prescription drugs.

Apparently, I’m not the only one who feels this way.

A group of military and business leaders known as Securing America’s Future Energy (SAFE) have recently called for the creation of just such an accident fund for accident victims of driverless cars.

In his story, “Group Seeks to Pave Way for Nationwide Adoption of Driverless Cars,” Wall Street Journal writer Mike Ramsey reported that the group – which is headed by “four-star retired military officers” and “Fortune 500 CEOs” – backs the following proposal for dealing with personal injury liability issues in the event of a crash involving a driverless car:

“[T]he group wants a U.S. legal liability fund created to ease concerns over lawsuits that could arise in skirmishes over whether drivers or computers are at fault in crashes.”

In my August 18, 2014, blog post, “Can a future with driverless cars save 1.2 million lives a year?,” I called for the creation of “a general compensation fund to compensate victims of driverless car crashes”:

“A payout fund set up to compensate victims of driverless car accidents could be modeled similar to the Health and Human Services Department’s vaccine injury compensation fund, which takes a 75-cent tax from every purchased vaccine. The program helps those who have been hurt by vaccine-related incidents, regardless of fault, without exposing the medical community to lawsuits.”

*    *    *

“I envision it working like this: For every driverless vehicle bought and sold, some amount of money based upon actuarial estimates of how many car accidents driverless vehicles cause can be placed in the compensation fund.  That amount can then be increased or decreased based upon the emerging data on how many people are actually being injured or killed by driverless cars.”

*    *    *

“Such a system would strike that appropriate and important balance between giving this amazing driverless technology that has so much promise the protection it needs from lawsuits, while still compensating the victims of  car accidents that will still occur even with driverless cars. Especially in the beginning years as this technology becomes more widely available.”

*    *    *

Protecting against a “driverless Ford Pinto”

Lessons from the past, however, should not be forgotten.

As important as a legal liability fund for driverless-car-accident victims is,  driverless car manufacturers still must have some “skin in the game.”  Especially if they knowingly and intentionally push to market technology that they know is not ready, or, as with the Ford Pinto and countless other examples of companies that overlooked public safety to pursue profits, too dangerous.

A legal liability fund should not bestow on manufacturers total tort immunity from civil liability and tort lawsuits.  To do so, we invite manufacturers to take dangerous shortcuts.   They will overlook the public safety because of the enormous profits of getting there first, knowing full well they are protected against the risks they took if a liability fund for driverless car accident victims gives them broad and total immunity from all civil lawsuits.

Retaining some form of civil tort liability for driverless-car manufacturers is still critical to ensuring that driverless-car technology develops safely.   As an attorney, I feel we can find the proper balance, and the answer is raising the necessary legal proof for an attorney to show against a manufacturer from a negligence standard to a significantly higher gross negligence standard (as long as it is more in line with how gross negligence has been defined and interpreted by courts around the country, and not as it has sadly been made into an almost impossible standard under Michigan tort law).

SAFE’s vision of a ‘legal liability fund’ in a world of driverless cars

In its May 2016 report, “A National Strategy for Energy Security” (which Mr. Ramsey of the WSJ was kind enough to share with Michigan Auto Law via our e-mail request), SAFE recommended the following (pages 26-27, 111-112):

  • “Create an alternative liability framework for early autonomous vehicle deployment. In 1988, the National Vaccine Injury Compensation Program was created to compensate those injured by childhood immunizations in response to a small number of adverse reactions to the pertussis portion of the DPT vaccine. Concerned that manufacturers of vaccines would stop production because of the threat of lawsuits, Congress created an alternative claims process funded by a fee on all vaccines. The claims process was part of broader legislation requiring the reporting of all adverse events to a national database and the establishment of a federal, no-fault system for adjudicating claims of harm from a vaccine. Not only has this structure preserved U.S. vaccine manufacturing capability, but the fund has run at a surplus. The Council recommends a similar approach to AVs …”
  • “A similar case might be made for the manufacturing of autonomous vehicles, where liability concerns will delay deployment and the significant safety and health benefits they bring. … The federal government should prepare for this eventuality by studying and considering alternative liability arrangements, including an analogue of the Injury Compensation Program. Such arrangements should be designed to retain a strong financial incentive for companies to deploy only autonomous vehicles that have been tested and rigorously certified as safe, but, at the same time, remove a significant obstacle that disincentives the deployment of autonomous vehicles and delays benefits.”

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