Personal injury lawyers beware; the
driverless car will likely wipe out automobile litigation as we know it today.
Automobile litigation has long been a bread-and-butter
business line for small and Main Street law firms. Sure, it’s not like it was
in the 1970s, when a quick letter to an insurer threatening to sue could reap
Thanks to no-fault insurance in Ontario and the
insurance lobby push to limit recovery for whiplash, automobile litigation has
become much more complex and there are a number of plaintiff-focused boutiques
that have arisen, specializing in things such as catastrophic claims.
By the same token, a number of insurance defence
boutique firms have grown to focus on the steady diet of cases that come with
Chances are, all that goes away by mid-century at the
Automobile litigation will be disrupted by driverless
cars for a couple of reasons.
First, experts predict fewer accidents once we hand
off control to sensors and algorithms, which means fewer lawsuits. In a seminal
2017 paper in the Michigan Law Review on
autonomous vehicles and liability, University of South Carolina law professor
Bryant Walker Smith writes that automated driving systems “are likely to be
safer than human-driven vehicles.”
He premises that on the fact that driver error plays a
role in 94 per cent of motor vehicle crashes and about 35,000 Americans die
each year, with another four million injured.
In Canada, the numbers are less staggering but still
concerning. According to 2015 figures from Transport Canada, there were 118,404
accidents resulting in personal injury or death. That works out to 324 crashes
per day. Car crashes killed 1,858 people — five a day — and 161,902 people were
injured, including 10,280 who suffered “serious” injuries that required
Consulting giant McKinsey & Company, however,
predicts that driverless cars could reduce accidents by a stunning 90 per cent
and shave billions of dollars off the medical costs related to crashes. That’s
a lot of litigation files that won’t see the light of day.
Second, and most important, motor vehicle litigation
will move from a system where accidents are assessed based on driver negligence
to a products liability system, where manufacturers bear more of the burden for
failure of things such as sensors and warning systems. Product liability
litigation is often the preserve of plaintiff class action lawyers and large
Bay Street defence firms, not Main Street law firms.
Robert Love, a products liability lawyer at Borden
Ladner Gervais LLP, says, “There is going to be massive change to the way the
insurance industry has traditionally responded to motor vehicle claims.
“There is definitely going to be an
increase in product liability claims,” he says, which can be complex and take
time to settle compared with traditional motor vehicle lawsuits.
However, this transition won’t happen overnight, and
Love expects that there will actually be a temporary uptick in automobile
litigation as we transition to a driverless world.
There are six levels to autonomous vehicles and we are
currently at the early levels. The challenge, Love says, is when we have a
hybrid system where drivers are interacting with autonomous vehicles on the
road. Questions of fault will involve a blend of driver and manufacturer
negligence and need to be worked out in the courts.
Once we reach level six, however, claims will focus
purely on product liability, and driver negligence will be removed from the
Already, some auto manufacturers have come forward to
say they will accept liability for accidents when cars are in autonomous mode.
Of course, there are no regulations yet governing
autonomous vehicles, so it’s difficult to say what the ultimate compensation
system will look like.
However, the insurance industry is quick to note that
people injured in accidents can’t wait for a long and complex product liability
case to play out in the courts.
Melissa Logue, national automobile underwriting manager at RSA Canada,
notes that the insurance industry is working on a framework for automated
Many are looking to the United Kingdom for guidance.
It’s the first country to introduce draft legislation on liability for
autonomous vehicles — proposing a single-policy model covering drivers when a car is
in either regular or self-driving mode.
Insurers will pay for damages and then seek to recover from the
responsible parties, including manufacturers.
There is also the threat that insurers could get squeezed out of the mix
if the manufacturers band together and create a self-funded liability pool.
Even if manufacturers don’t do that, auto insurers will be hit hard, which
will negatively impact defence lawyers.
KPMG predicts that autonomous vehicle technology will have a major impact
on the insurance business, shrinking the sector by 71 per cent or US$137
billion by 2050.
By then, most lawyers practising today will be long gone or in their
However, if your retirement plan includes selling your motor vehicle
litigation practice in 25 years, don’t count on it. There likely won’t be much
left to sell.
Jim Middlemiss is a principal at