Should Automakers Be Responsible for Accidents?

[Muda69]

https://object.cato.org/sites/cato.org/files/serials/files/regulation/2019/3/regulation-v42n1-1.pdf

Quote

Motor vehicles are among the most dangerous products sold anywhere. Automobiles pose a larger risk of accidental death than any other product, except perhaps opioids. Annual autocrash deaths in the United States have not been below 30,000 since the 1940s, reaching a recent peak of roughly 40,000 in 2016.

And the social cost of auto crashes goes beyond deaths. Autoaccident victims who survive often incur extraordinary medical expenses. Those crash victims whose injuries render them unable to work experience lost income. Auto accidents also cause nontrivial amounts of property damage—mostly to the automobiles themselves, but also to highways, bridges, or other elements of the transportation infrastructure. Finally, serious motor vehicle accidents often cause severe noneconomic injuries—that is, “pain and suffering.” According to some estimates, such noneconomic harms amount to more than twice the magnitude of the aggregate economic damages caused by auto accidents.

All of this may be about to change. According to many autoindustry experts, the eventual transition to driverless vehicles will drastically lower the economic and noneconomic costs of auto accidents. Why might this be so? Humans are bad drivers. People have bad judgment, slow reflexes, inadequate skills, and short attention spans. They drive too fast. They drive while intoxicated or sleepy or distracted. According to the National Highway Traffic Safety Administration, roughly 94% of auto accidents today are attributable to “driver error.”

The hope is that computers can do better. Fully driverless vehicles, sometimes referred to within the industry as “Level 5s” to distinguish them from vehicles with levels of partial autonomy, would not suffer from the problems that plague human decisionmaking in the driving context. These vehicles thus promise to be substantially safer than the human-driven alternative. How should the automobile tort/insurance regime be redesigned to take into account the emergence of driverless vehicles? I propose to replace our current auto tort regime (including auto products liability law, driver-based negligence claims, and auto nofault regimes) with a single comprehensive automaker enterprise liability system. This new regime would apply not only to Level 5s, but to all automobiles made and sold to be driven on public roads.

My basic argument is that while current negligence-based auto liability rules could in theory work to provide optimal accidentavoidance incentives, in practice they do not. The current system requires courts and drivers to evaluate benefit–cost tradeoffs they are not equipped to make. Also under the current system, much of auto-accident costs are offloaded onto medical and disability insurers or taxpayers. By contrast, under an automaker enterprise liability system, responsibility for those costs would be placed on the parties in the best position to reduce and insure them: vehicle manufacturers. In addition, automakers would be induced to charge enough for cars to fully internalize the costs of automobile accidents. Further, if auto-insurance contracts—and auto-insurance premium adjustments—could be deployed to improve driving habits, auto manufacturers would be induced to coordinate with auto insurers to achieve these deterrence gains. Moreover, to the extent that Level 5s reduce the cost of accidents, they would be cheaper to purchase than conventional vehicles, which would provide a natural subsidy to encourage (and potentially accelerate) their deployment.

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An interesting proposal.   Of course I can see automobile manufacturers fighting this tooth and nail.  

Edited March 18, 2019 by Muda69

[Bobref]

40 minutes ago, Muda69 said:

https://object.cato.org/sites/cato.org/files/serials/files/regulation/2019/3/regulation-v42n1-1.pdf

An interesting proposal.   Of course I can see automobile manufacturers fighting this tooth and nail.  

All I can say is “beware the Law of Unintended Consequences.”

[swordfish]

SF doesn't speak "legalese" fluently (or at all for that matter) enough to contribute to a debate on this topic, but my first thought is that the user should be the one that assumes all risk when using a product.  Except that when a consumer uses a product in the legal manner it was intended and designed for, then the factory warranty would apply and liability would stem from there.

[Bobref]

9 hours ago, swordfish said:

SF doesn't speak "legalese" fluently (or at all for that matter) enough to contribute to a debate on this topic, but my first thought is that the user should be the one that assumes all risk when using a product.  Except that when a consumer uses a product in the legal manner it was intended and designed for, then the factory warranty would apply and liability would stem from there.

There is already a well-established body of law that deals with this type of situation. It’s called “product liability.” There is a huge body of case law, supplemented by statutes in many states, describing the process of making a legal claim against a manufacturer of a product that was defective and made unreasonably dangerous by the defect, resulting in harm to a user or consumer. There’s really nothing new here.

[Muda69]

But once all driving is handled by computers does that mean I will no longer have to carry as much car insurance, since any accident now has to be the fault of the manufacturer,  aka a defect?  Although I suppose one may decide to carry car insurance for non-vehicle accident damage,  like from a hail storm or a tree limb.

 

[Wabash82]

1 hour ago, Muda69 said:

But once all driving is handled by computers does that mean I will no longer have to carry as much car insurance, since any accident now has to be the fault of the manufacturer,  aka a defect?  Although I suppose one may decide to carry car insurance for non-vehicle accident damage,  like from a hail storm or a tree limb.

 

As you noted, if you own the vehicle you'd presumably want to have comprehensive insurance coverage for physical damage, like you do with your car now. How liability for damage resulting from vehicle collisions/accidents will depend quite a bit on how this level 5 technology and related driving laws actually works in practice (e.g., will the srlf-driving systems be overridable? Will the law require that there be a human "driver" responsible on each trip to monitor the vehicle's self-driving and to take control if necessary? Etc., etc.) 

From what I have read, many "futurists" believe that the widespread adoption of these self-driving cars will largely eliminate private ownership of autos, anyway -- they see a world with ubiquitous Uber-like or taxi-like companies blanketing areas with fleets of self-driving vehicles. In that future, you won't need personal auto insurance, anymore than you need it now for an Uber or taxi ride.  

[Impartial_Observer]

 

[foxbat]

On 3/19/2019 at 10:49 AM, Wabash82 said:

As you noted, if you own the vehicle you'd presumably want to have comprehensive insurance coverage for physical damage, like you do with your car now. How liability for damage resulting from vehicle collisions/accidents will depend quite a bit on how this level 5 technology and related driving laws actually works in practice (e.g., will the srlf-driving systems be overridable? Will the law require that there be a human "driver" responsible on each trip to monitor the vehicle's self-driving and to take control if necessary? Etc., etc.) 

From what I have read, many "futurists" believe that the widespread adoption of these self-driving cars will largely eliminate private ownership of autos, anyway -- they see a world with ubiquitous Uber-like or taxi-like companies blanketing areas with fleets of self-driving vehicles. In that future, you won't need personal auto insurance, anymore than you need it now for an Uber or taxi ride.  

Recent opinion piece from NYT about car ownership in the future.

https://www.nytimes.com/2019/03/22/opinion/end-of-cars-uber-lyft.html

We discuss this in class and, one of the biggest items driving personal ownership is "on-call" availability of a vehicle.  Once you have more automated cars, there will be less need for taxi drivers while allowing for even more availability of vehicles "on call."  Toss in a system of data analytics that allows vehicles to be "in the area" based on your regular schedule or even less-regular schedule, and the idea of on-call becomes more possible.  The necessity for parking garages in business districts and downtown areas would decrease.  The same would also be potentially true of most retail establishments too since people would be dropped off rather than parking a vehicle there.  This in turn would reduce costs for businesses who wouldn't necessarily need the zoning capacity for parking spaces for their establishments.  Think about homes in the future that would no longer need garages or could select the garage as a garage ... for folks who still want to own a car ... a semi-finished storage area or a more finished living area.

To some extent, the Bird scooters are a foray into this idea for transportation, except that, in the case of the autonomous cars, there would be less of the issue of the scooters causing the problems of just being left everywhere.  Those cars would drop you off and then go to pick up other passengers or return to the station for maintenance or charge.