Mercedes-Benz has boldly moved to become the first automaker to offer its Drive Pilot, a SAE Level 3 system for conditionally automated driving in the United States. 

The most exciting aspect of the decision is that Mercedes-Benz is assuming liability for any crashes or incidents that occur while the autonomous system is active. This approach addresses a major concern, since liability has been touted as one of the key roadblocks to self-driving capabilities being deployed among the general population.

What is a level 3 self-driving car?

Self-driving cars are classified into six stages (Level 0 to Level 5): 

• At levels 0-1, the driver is mainly responsible for managing all driving operations and tasks.
• Level 2 involves assisted driving supported by partial automation, but the driver must monitor the system continuously. 
• Level 3 introduces conditional automation, allowing the human driver not to monitor the vehicle constantly but must be ready to resume control. 
• At level 4, the car drives itself without human intervention. Nonetheless, the system still cannot fully make decisions. 
• Level 5 signifies total autonomous driving, transitioning human intervention to passenger status with no driving responsibilities.

The decision of Mercedes-Benz to sell level 3 autonomous driving technology indicates a strong confidence in the safety and reliability of the company’s Drive Pilot technology. This may positively signal other automakers that liability may not be the significant roadblock precluding the widespread adoption of autonomous vehicles anymore.

Tesla’s level 3 vehicles, with a lower autonomy level, hold the driver legally accountable for monitoring the autonomous system and taking over whenever needed. Tesla warrants that every time the driver turns on the autopilot system, there is always a visual reminder that the driver must keep hands on the wheel. 

With Mercedes-Benz’s Level 3 system, the driver can lawfully disengage and perform non-driving tasks, shifting the total liability to the automaker.

Mercedes-Benz has received certification from states like California and Nevada. The certification means that the Drive Pilot system has met the safety requirements set by these states.

Releasing drivers from any responsibility is still too soon:

Drivers cannot utilize the Drive Pilot continuously. The usage of the Drive Pilot is restricted to approved roads or specific freeways with speeds below 40 mph (or no more than 60 km/h) and only during daylight hours.

The Mercedes-Benz level 3 vehicles incorporate reliable hardware which includes driver-facing cameras, as well as Light Detection and Ranging (LiDAR) with the role of minimizing collision risks. Should a driver engage in activities such as using a mobile phone or nodding off, facing backward, or leaving the driver’s seat, the system will alert them to deactivate Drive Pilot and resume manual control. Hence, it will prevent the driver from engaging in additional activities other than driving.

The availability of such technology may suggest that determining the subject of tort liability could be accomplished by collecting internal data from the recording and monitoring system in the vehicle. 

In the event of an accident, it would be possible to only show the existence of unlawful driving conditions of the vehicle without directly implicating driver error. On the other hand, the driver must demonstrate non-negligence during driving, proving full compliance with their duty of care to avoid liability from manufacturing defects or accidents stemming from autonomous driving behavior.

Legal and regulatory considerations for autonomy vehicles:

Currently, a transition to Level 3 autonomy means that insurance companies now need to navigate into complex legal and regulatory factors, especially concerning liability. The problem is that the regulatory liability landscape in some instances requires to be appropriately framed and in others is completely absent. 

Europe

In a few European countries, there is a growing recognition of the role of autonomous vehicles in our society. This has prompted the establishment of legal frameworks to address liability concerns and set specific yet unclear guidelines for autonomous driving.

UK

In the UK, the Automated and Electric Vehicles Act 2018 defines a vehicle as “driving itself” if it operates in a mode that is not controlled or monitored by a human (Law Commission, 2018, p. 8). By definition, this can only be applied to level 5 autonomy.

France

France is the only country that has already defined rules and responsibilities for Level 3 and Level 5 autonomous vehicles since 2021. The most recent update (as of July 2021) clarifies the roles and responsibilities of the driver and the automated vehicle. This includes the level of attention expected from the driver when the self-driving system is activated. 

Germany

Germany’s Autonomous Driving Act, effective July 28, 2021, permits using motor vehicles with autonomous driving features in designated operating zones on public roads. These features enable vehicles to perform driving tasks independently, aligning with level 4 of the Society of Automotive Engineers (SAE) driving automation standards. 

A technical supervisor is still required to control the vehicle’s maneuvers externally. The law requires owners of vehicles equipped with autonomous driving capabilities to acquire supplementary liability insurance for the technical supervisor.

US

In the US, during the first half of 2023, only nine states, including California and Nevada, have taken the lead in developing autonomous vehicle laws within their jurisdictions. Many states enacted or considered legislation to enhance opportunities for autonomous vehicles use and development. 

The National Highway Traffic Safety Administration (NHTSA) has so far amended its reporting requirements for autonomous vehicle crashes in the US. Under liability issues, the levels of responsibility remain unclear.

What could be next from an insurer’s point of view?

Legal experts caution that the liability landscape surrounding autonomous vehicles is still unclear. Regulations and laws still need to fully catch up with the capabilities of newer levels of vehicle autonomy on the roads. 

The significant issue nowadays is determining the responsibility in case of an accident. Determining fault regarding autonomy requires a deep understanding of the technology, its limitations, and potential malfunctions, which still need to be fully understood.

In the meantime, insurance companies may engage in complex legal battles to determine responsibility, which will influence the design of new insurance policies. This is why liability is expected to be interpreted differently, affecting the car insurance sector overall.

As the road to full autonomy still remains far away, insurers and automakers must collaborate closely to improve accountability in accidents. As self-driving cars become more common, the insurance sector must adapt their business models and product portfolios to stay relevant.