Vehicle Technology and Aviation Bill (Second sitting)

Andy McDonald Excerpts

Tuesday 14th March 2017 Public Bill Committees

[The Chair]

Q We will now hear oral evidence from the Association of British Insurers and the Centre for Connected and Autonomous Vehicles. Could the witnesses please introduce themselves for the record, starting with Mr Forbes?

Iain Forbes: My name is Iain Forbes. I am head of a team called the Centre for Connected and Autonomous Vehicles, which is a policy team based in the Department for Transport and the Department for Business, Energy and Industrial Strategy.

Ben Howarth: I am Ben Howarth. I am policy adviser for motor insurance at the ABI. As part of that I have led all our work on the Automated Driving Insurance Group and drafted our response to the CCAV consultation that pre-empted the Bill.

[Andy McDonald (Middlesbrough) (Lab)]

Q Good afternoon, gentlemen. Thanks for coming. I have a number of questions. At the beginning of the Bill, we are told that automated vehicles are what the Secretary of State says are automated vehicles. Clearly, some thought has gone into the criteria for so-designated vehicles. What are your own thoughts and observations on how we can be sure we are getting that set of criteria correct?

Ben Howarth: From an insurance perspective, that is one of the clauses we particularly welcomed when we saw the Bill. One of our concerns in advance was that it would not be clear to the customer what cars needed this new insurance system, so the clarification that the Government are going to take responsibility for doing that is really welcome. It means basically that we know what cars we need to have this new insurance for, and the customers will know that as well.

In terms of criteria, it is relatively simple. It is more about the user than the technology. I think the technology might not move that much, but it is the point where the user can feel confident that, when the car is in automated mode, it can deal with everything. Thinking about the worst-case scenario of an accident, if the car senses it is going to go into emergency mode, the car is able to do something to deal with that, which does not require the driver to come back in. We feel that if there is any point where the driver needs to come back in, it is not really an automated car. It is that tipping point where the car is completely capable of dealing with every situation. It might not carry on driving, but, at the very least, it would do an emergency stop and get you into a safe stop manoeuvre. That is the tipping point, or distinction, that we see.

Iain Forbes: Just to underline that, the measures in the Bill are designed to deal with the sorts of situations where a vehicle can drive itself in automated mode and not require the oversight of a human when the driving test is being operated. The particular mechanism by which those vehicles are going to be certified is an active topic of discussion at international regulatory forums. We have actively participated in those discussions, but we felt it was important to flag at the outset of the Bill that that would be clear to people in the insurance industry and elsewhere, to make sure they were able to understand which vehicles these measures apply to and which ones they do not.

Ben Howarth: In practice, we would be hoping that, from an insurer’s perspective, it is pretty easy to find that out, just by looking at the licence plate or the VIN number. There would be a clear definition that this is a car with automated functionality.

[Andy McDonald]

Q Of course, we are now entering a major shift, because we have to have insurers who are going to be picking up the tab for accidents involving automated vehicles. Presumably, as we progress, we will be getting errorless driving in automated vehicles. That is the objective, and incidents will result. Therefore, we should be looking forward to cheaper insurance policies, but that may not automatically be the case, if you pardon the pun. How progressed or how ready is the insurance industry to deliver products that would make fully automated vehicles accessible to people in terms of costings, including the cost of insurance?

Ben Howarth: We are very advanced as an industry, particularly in the UK. Because of the clear message that the Government have given, we are perhaps ahead of our contemporaries in other countries. The two really important criteria in terms of the cost of insurance will be the volume of accidents. We are fairly confident—Thatcham Research has done quite a bit of research that suggests the number of accidents is going to come down a lot once we get automated driving. That will obviously reduce the number of insurance claims, which will inevitably have an impact on the cost of insurance.

One factor that we probably do not know about at this point is the actual cost of the vehicles themselves, and how much they cost to repair. We might have considerably fewer claims, but very high costs associated with repair might have an impact. That said, that is something that is happening already. Vehicle technology is changing a lot already, so it is not a case of a huge tipping point in technology once we switch to fully automated cars. The technological change will happen more steadily, so I am very confident that the insurance industry is ready to deliver competitive insurance products that will be affordable, will help people and will make them want to take up this technology.

[Andy McDonald]

Q Will you help me on another matter? When an accident is caused by an automated vehicle, we are told in the Bill that the insurer is liable for the damage, but when the automated vehicle is involved but is not insured, it is the owner of the vehicle who is responsible for the damage. I am wondering what your view is on whether that ought that to be the person in charge of the vehicle, rather than the owner. We might have the perverse situation of a stolen vehicle being involved in an accident but, according to this, the owner of the vehicle would be in the frame. Do you understand?

Ben Howarth: I think I know what clauses you are referring to and my understanding of them is that that covers publicly owned vehicles and Crown Estate vehicles. They would not have insurance because they do not need them. In those cases, where it is a publicly owned vehicle, the liability would fall on the public body. It is a separate arrangement for genuinely uninsured driving—private cars that are uninsured.

[Andy McDonald]

That is really helpful.

Iain Forbes: That is exactly right. That clause covers publicly owned vehicles. We anticipate the situation being similar to the situation at the moment for conventional vehicles. It is often the case that they self-insure, rather than going through an insurance company.

[Andy McDonald]

Q I do not know what your handle is on this, and that was terrific clarification, but do you not see that it is possible to interpret it in the way I did? A vehicle that has been stolen is not insured, but the owner of the vehicle is picking up the cost, not the person who stole it.

Iain Forbes: Certainly, our legal team has been through the regulations to effect that as the policy aim, but if the Committee has comments, we have to look at it.

[Andy McDonald]

Q Finally from me, we are in the world of upgrades, which will present opportunities for manufacturers to continue to engage with the vehicle, in effect. I was wondering whether you had applied your minds to any future product liability exposures with the advent of new software. What does that mean in terms of those future liabilities and in terms of limitation, because current liability, once you part with the vehicle, has a 10-year limitation, although we have got some issues around extensions for people with disability insurance and so on? But if it is a product liability issue, there could be a succession of products that could give rise to liability. Is that factored into your thinking? Is it relevant? Have you dismissed it?

Ben Howarth: That is very relevant. When the consultation first came out, one of the questions was, “Do we bolt product liability into the motor insurance policy?” We looked at it in quite a lot of detail, and that was our initial assumption for how it would work. When we thought about it, those issues that you referred to and the fact that product liability lasts for only 10 years made it feel like too much of a change for product liability to be put directly into a Road Traffic Act situation. That is why we came to the conclusion that it should be a primary motor insurance policy, with the option then to recover from manufacturers.

Our conclusion is that you probably do not need to change the product liability, as it is kind of a backstop and it will not affect the original claimant. There might be a case on some occasions, if it is an older vehicle. We do not know quite how the market is going to develop—whether cars will be on the road for 10 years or longer in this situation, or maybe the product liability will renew itself every time there has been an upgrade. Let us assume that it does not, and you do expire at 10 years. My understanding is that there will still potentially be the option for a civil liability claim, so you might be able to argue that the manufacturer is not product liable, but they are in effect acting as the driver, so there is another claim that you might be able to bring.

[Andy McDonald]

Q You could be caught with a person with a disability, or a child, who is not subject to ordinary limitation; it would be from the date of their majority. There could be an action on the attaining of that majority and your product liability recompense from the manufacturer is effectively null and void.

Ben Howarth: Yes. I think that is factored in. The Bill means that that is a problem for the insurer, rather than the victim. I suppose part of the calculations that insurers will make is how many of those claims they will be likely to face. Are they insuring vehicles that are over 10 years old? That might have an impact. What is important in the Bill is that it makes that a problem for us as an industry. It will not affect, say, a disabled person who is using these vehicles. I think that is the insurance we need at the moment.

[Mr Hayes]

Q On this insurance issue, there has been quite a lot of speculation about what might happen to the products that the industry offers, which will clearly have to evolve. We were told that again this morning. Is it your estimation that that will affect premiums? One would expect premiums to fall, given the fact that these cars will be safer; many of your claims are related to human error, after all. Is that how you see things developing? However, we are also told that many people who cannot currently drive will now be able to—the infirm, the elderly, some disabled people. In a way, that is the most exciting thing about this development. How would that affect your assessment of premiums?

Ben Howarth: On the first case, I would think of it more in terms of claims costs than actually speculating on what the premiums would be. Obviously, if the number of accidents comes down dramatically, that is going to have a significant impact on the costs that insurers face. Motor insurance is very competitive, and it is inevitable that, if we see a significant reduction in costs, we will see a significant reduction in the premiums charged. So I think we can be pretty confident of that. As far as we know, it is still four or five years before these products will come to market.

Looking ahead to the cars you are referring to, where, say, there is a severely disabled person who possibly cannot drive at all at the moment, we are probably thinking about a level 5 car that can go from A to B in fully autonomous mode. It is fair to say that this legislation is primarily aimed at cars that will be manual for some of the time, automated for the rest: more of a level 4 car. Once you get to level 5, that is probably the point at which the insurance system is going to have to change more significantly.

Where the Bill is really helpful is that it allows us to learn from the first developments, get an insurance function in place and see that that system works. It is probable that we are going to have to evolve further once we get to a fully automated car. David Williams, who was one of your witnesses this morning, is one of the insurers involved in trials of fully automated technology. There is a significant degree of interest from insurers in the next generation of technology as well; but it is probably fair to say that this Bill is more around a level 4 car. I prefer to think of it as a binary distinction between automated and not-automated. I am not completely convinced about the levels and how useful they will be for consumers. It is probably fair to say that we think of it as level 4.

--- Later in debate ---

[Tom Tugendhat]

It makes up about 50% of insurance profits in the UK.

Ben Howarth: I am sure that individual insurers will look at the potential impact on other parts of the market, but we have not.

[Andy McDonald]

Q Returning to the issue of software, clause 4 devotes a lot of attention to when insurers will not be picking up the can—something that we are familiar with. Can you say a little bit about how you are expecting software to be updated? What is the process for doing that? We all update our phones; we plug them in and press “install”, and the phone tells us when it is done. What is the current state of knowledge? Where are we, scientifically, on achieving that?

Linked to that, what responsibilities should there be on manufacturers to provide updates and tell the owners or users of vehicles that those updates have to be made? As I read it, there is nothing in the Bill that places any obligations on manufacturers to do that. A lot of time is devoted to when the software has not been updated, but where is the principal obligation for the manufacturer to do it? There are a lot of questions, but I am wondering whether that loops back to the definition and whether that needs attention to ensure that we have addressed the obligation. So how is it done and what are the obligations on the manufacturer?

Iain Forbes: Those are good questions. To answer the second one first, what is important about this Bill is that it is looking just at the insurance regime for these vehicles. It will have to work in concert with other parts of the law, including the system by which vehicles are approved for sale. You might imagine that if vehicles that operated automated systems were to be approved for sale there would be a close look at what would be necessary to ensure that the systems were updated where necessary to take account of any changes that were important to ensure safety.

[Andy McDonald]

Q Have we got this the wrong way around, then? Surely you have to establish how something happens before you start dealing with its insurance consequences. This is putting the cart before the horse, isn’t it?

Iain Forbes: We are focusing on this now because this is an area where in consultation people told us that it was important to set out a framework now to allow insurers and manufacturers to have those discussions about what might be necessary to inform the products that come to market when these vehicles do in four or five years’ time. In the meantime, we need to be working very hard to ensure that the appropriate approval regime for these vehicles is also in place. The vehicles will not come to market without that, so this will have to work in concert with another part of the law, which will say how these vehicles will be approved for sale.

Ben Howarth: If I can add one other thing, I think that the Bill is intended to do a new thing by protecting someone who is in the driving seat as, because they are not in control of the vehicle at the time of the incident, they are being treated as a victim. If they have done something to the car that means that they are responsible for the accident—perhaps they have not maintained it properly—it is reasonable to put it into their insurance policy that that is not something that they could claim for, as they would not be a victim. That is what these policies are broadly intended to do. I take your point that we absolutely need to define what updates need to be made and who is responsible for them, but if you turn it the other way by insuring the person in the driving seat and ensuring that they can claim if they are injured, the situation changes if they caused their own injuries.

[Andy McDonald]

Q If we are getting into a discussion on clause 4 about failures to update software, where is your starting point? You are basically telling me, “Ah, we’ll do that somewhere else separately. We will have to get those regulations on board.” All that I am suggesting is that that is out of sync and we should be looking at the processes first, at least for what we are expecting, before we start dealing with the insurance consequences.

Iain Forbes: To answer the first part of your question about how this is done, that is likely to develop over time as new systems come to market. It is already the case that some manufacturers upgrade software systems by asking customers to take their vehicles to a dealer and some do it over the air, in a similar way to how a phone is updated, for example. That is an area that is currently the subject of international discussions, and indeed the UK is co-chairing the international regulatory group that is having a look at how over-the-air updates will function in future.

[Andy McDonald]

Q Really, what the manufacturer would say is that if a vehicle has not been updated for one reason or another, or if they discover some other technical reason to shut it down, they will make sure that vehicle does not shift. Is it within the contemplation of the industry to take it that far?

Iain Forbes: What we need is systems that are transparent to people who are using them and that provide appropriate protections so that they feel confident using them. That is part of the discussion that we are having internationally at the moment.

[Kit Malthouse]

Q I have a couple of questions. We have a problem in this country with uninsured cars. Given that these cars are likely to be connected to the matrix in some way, do you think that it would be sensible for the Government to take a power to require that the car has to check whether it is insured before it moves? When I go and buy my tax disc, the system checks that the car is insured before it allows me to do so. Should these cars be required to do the same?

Iain Forbes: We are at too early a stage in the development of the technology to be able to consider that, but it is certainly something we could look at.

--- Later in debate ---

[Andy McDonald]

Q Good afternoon, gentlemen. Could you help me with the issue of shining or directing a laser at a vehicle? The Bill as drafted states that it will be an offence to direct

“a laser beam at a vehicle which is in the course of a journey, and…the laser beam dazzles or distracts a person with control of the vehicle.”

I am concerned about that, because I have never flown a plane and I have never, to my knowledge, had a laser shined at me. I am just thinking the matter through. Is that the totality of the thing that concerns you all, or are there other instances short of being dazzled or distracted that would cause you concern and cause you to think that something ought to be an offence? Also, although such an activity may have taken place, the driver or person in control of the vehicle might have no knowledge whatsoever of it having happened. I do not understand the experience. Does someone who is in control of a vehicle experience it only when their eyes are actually dazzled, or is there another perception of the event having taken place?

Steve Landells: From a British airline pilots’ point of view, our main concern is the distraction as well as the dazzle. As it stands, the dazzle has to be part of the offence. Our view is that it would be better to have the offence being just the pointing of a laser at a vehicle, because from an aviation point of view, if you cannot prove the dazzle and distraction—if it is not reported or the police do not know where the aircraft is going—you may not end up with the second part of that offence.

[Andy McDonald]

Q Would you even have to know that it has happened for an offence to have taken place?

Steve Landells: From our point of view in BALPA, no. It is about the act of shining a laser at the aircraft. If we see it, it will be reported, but if we do not see it, we would still like to see an offence there. The problem is that as the power of lasers gets greater and greater, there is a higher chance of injury occurring.

[Andy McDonald]

Q Thank you for that. Does anybody else want to comment on that aspect of this offence?

Paul Watts: From a helicopter perspective, again the dazzle and the distraction are the main concern, especially as helicopters operate in a much lower-level environment than airliners, and we rely on flying visually and visually avoiding other aircraft, buildings and obstructions. We also share the concern about the power of lasers and the frequency range—the fact that it may be possible in the future to have lasers that are not even visible. Again, we would like to see it being about somebody attempting to shine a laser at an aircraft, rather than having to show that it dazzled and distracted the pilot.

Martin Drake: It is possible to sustain an injury from a highly collimated laser—one where the beam is very narrow. It is possible to sustain an injury from that laser without having the dazzle and distract element. If it comes through your aircraft windscreen at a 90° angle, the dazzle and distract can be reduced, but if the pilot were to have that go into his eye, he could get retinal damage without getting the dazzle and distract element. I would say that that was fairly rare at the moment, but as the power of the lasers goes up and the frequency of the lasers changes, that is a concern that we have.

Simon Bray: Obviously the dazzling and distracting is the effect on the driver, pilot or whoever is in the cab. That is where the harm and the potential danger are. As well as having a victim, the legislation enables us to investigate more readily to prove an offence. If it were merely in the general direction of a vehicle, that would be more tricky to prove unless we were at the other end of that particular laser and had an opportunity to get into more of an investigation at that end of it.

[Andy McDonald]

Q Although we are not specifically restricting this discussion to aviation, because it could be another vessel, I think BALPA has suggested in evidence to the Committee that it is equally important and significant when lasers are shone at air traffic control towers. Have we got a history of that happening? Is it a significant risk? Would you prefer to see the legislation embrace air traffic control towers, rather than just vehicles, as currently described?

Martin Drake: There certainly is history of it in the USA, and I can think of a couple of times in the UK where a laser has been shone at the air traffic control tower. For an air traffic controller working the tower—that is the control bit that does the final approach and the controlling of the aircraft as they depart, so it is within close proximity of the airport—most of that is done visually. If his or her eyes were to be affected, it could reduce their capability of seeing aircraft close to the airport. They would then have to come off duty and be replaced fairly rapidly. It is not as common as shining at aircraft, but it does happen.

Steve Landells: Can I expand on that slightly? It depends on the airport’s procedures, but I know of one airport where, if a laser is shone at the visual control tower, they take the visual controllers out of that tower. You effectively shut down the airfield.

[Tom Tugendhat]

I am sorry; what did you say?

Steve Landells: They take the visual controllers out of the tower to protect them, and if that happens, the airport is effectively shut down.

[Andy McDonald]

Q What do you think should be happening to better control the availability of the devices themselves? What restrictions would you prefer to see in place to stop the devices being acquired?

Simon Bray: There have been discussions about whether to deal with some of these items as offensive weapons. Clearly, if there is an intent to shine and to harm someone’s eyesight with one of these devices, you can deal with them in that way, provided you get the evidence behind it that demonstrates possession of an offensive weapon with intent to cause harm; likewise if you assault someone with a laser. The difficulty is investigating and proving those instances.

What the Bill does do is provide blanket legislation that is suitably serious—more so than the different sorts of legislation that we are having to use at the moment. It is an advance on what we have currently got. I definitely take the point that were we to have additional powers restricting sale and possession, it would be easier for us to deal with things before they take place.

Richard Goodwin: Colleagues I have been working with in the Department for Transport are working with colleagues in the Department responsible for business employment, looking at potential import restrictions and some of the issues around how we control the sale of some of these lasers. That work has been going on for seven or eight years, and during that time the availability and power of lasers has increased and the cost has come down. There is a Department looking at that control now, and clearly we support that.

[Andy McDonald]

Q Finally, changing tack totally, can the police officers help me with an unrelated matter in the Bill about diversionary courses for road traffic offenders? Have you come prepared to speak about that at all? Could you give some indication of your experience of those courses, how effective they are and, just as importantly, the evidence base that you may or may not have on whether they are effective and reduce repeat offending? Are you able to comment on that?

Simon Bray: It is not my area of expertise and I have never had to undergo one of those courses myself. There is a good look at diversionary methods at the moment. There are certainly plans to streamline the various diversionary methods and out-of-court disposals around the country. Clearly, that would fit in that overall picture, but it is not specifically traffic.

[Mr Hayes]

Q As you know, gentlemen, the CAA says that many of the incidents involving lasers are unreported and it is probable that there are many more than those of which we currently know. Is it your view that it is a growing problem? How do you think the proposed legislation will help with reporting? If you think it does not do enough, what more could it do?

Paul Watts: I am from the National Police Air Service and we saw it as a growing problem, probably about three or four years ago. Over the last three years, we have averaged out at about 100 incidents a year, so it seems to have plateaued somewhat, but it has gone from a low level to a very high level. We would welcome any legislation that makes it easier to catch an offender, but we would also still like to see a reduction in the availability.

We did see a tailing off of offences after the first few prosecutions for endangering an aircraft came into play. Over London, there was a reduction in the number of times a laser was used and less of the casual targeting of an aircraft. That seems to have tailed off and we seem to be back to a level of use that seems fairly stable and fairly high. On average, about 100 offences a year are reported through our safety system.

Simon Bray: I do not know whether Richard wishes to comment on the Met figures.

Richard Goodwin: We took a view that this matter was so serious that, despite the fact that it is not currently a reportable and recordable offence under Home Office counting rules—the legislation will change that—on 1 April last year we started reporting all lasers reported to us as crimes in London. I know that colleagues in Scotland have done the same thing. Across the year, we are averaging around 100 to 120 incidents within London being reported to us. The CAA figures are slightly higher.

Colleagues from BALPA did a survey of their members, which indicates that the figures are drastically underreported. We can get into the reasons for that, but some of it could be the perception that as pilots they were not being treated as victims and the matter was not being taken seriously. The legislation will give the degree of gravity that we think the offence deserves and it will have an impact on the aviation community, pilots and captains. It will show them that we as the police will take it seriously, because we will have a consistent recording of all offences, particularly across aviation.

Richard Moriarty: We at the Civil Aviation Authority would strongly support the measures. Our figures show that laser incidents are at about 1,500 a year. That is probably an underestimate, for reasons that have been suggested by other panel members. To put that in perspective, that is three or four incidents a day in and around UK airports. We have talked before about injury to pilots and often these attacks are during their peak workload—either landing or take off, in and around airports—so there is a real aviation and public safety aspect, which it is very important to get right. We would strongly support it for those reasons.

Beyond the Bill, we are interested in continuing to work with other authorities and Departments on other measures to complement this, whether through import controls or working with the police on offensive weapons. The good news is that the provisions in the Bill will send a very strong signal that we all take this risk very seriously.