Navigating the future of autonomous vehicles in Australia is fraught with challenges - from fragmented state laws to unresolved issues around liability, insurance, and privacy.
This article delves into the complexities and potential of driverless technology, emphasising the urgent need for a unified national approach by 2026. It explores the necessary infrastructure, legal frameworks, and the role of innovative companies in shaping this future – as well as Australia’s urgent need to catch up with global advancements.
Roadblocks facing autonomous vehicles in Australia
Our last article on autonomous vehicles, ‘Automated Safety Law 2026?’, referenced the 2020 KPMG Autonomous Vehicles Readiness Index, which ranked Australia 15th out of 30 for overall readiness. The most recent review, Dentons Global Guide to Autonomous Vehicles 2023 (the Guide), featured Australia in eight of its 148 pages. A significant portion of this coverage focused on government programs, which, when compared internationally, highlighted how far behind Australia is in the field of autonomous vehicles.
Notably, there was no attempt to rank Australia – which is probably a good thing, as we would likely score much worse than 15th.
The Guide also referred to each State and Territory having its own Civil Liability Act covering personal injuries caused by motor vehicle accidents. By focusing solely on this, it overlooked the complex laws in this area, as only a small part of the Civil Liability reforms apply to motor vehicle accidents.
Barry Nilsson’s national Compulsory Third Party (CTP) team recently conducted a comprehensive analysis of the various CTP legislative and common law approaches across Australian States and Territories regarding personal injury from motor vehicle accidents: Australian CTP Insurance Schemes: A national overview and cross-jurisdictional guide.
It is a complex and messy mix of laws which, together with criminal law, road rules, design standards and other elements, the Federal Government’s National Transport Commission (NTC) is navigating in preparation for additional legislation for autonomous vehicles by 2026 – see the April 2024 public consultation: Automated vehicle safety reforms Public consultation.
Added to this are questions relating to privacy law - who can access what data from autonomous (and other) vehicles and for what purposes? This article does not cover the data and privacy aspects of this complex issue, and readers may instead look to the Association of British Insurers’ recently published Automated Vehicles: Data Sharing Principles August 2024 as an example of the UK experience.
Australia faces significant challenges in preparing for autonomous vehicles, from fragmented state laws to unresolved issues including questions of liability, insurance and privacy. While the 2026 legislative target is ambitious, it highlights the urgency for a unified national approach.
What are autonomous vehicles and what infrastructure do they require to operate in Australia?
Autonomous vehicles offer varying levels of driving assistance, ranging from L0 (no assistance available, not even cruise control) through to L5 (full autonomy, with no steering wheel and a jacuzzi in the back seat… ok, we’re joking about the jacuzzi).
Without infrastructure such as a reliable 5G mobile network, autonomous vehicle performance will be hampered. Some vehicles rely on cameras for input, and without 5G, necessary software updates aren’t available. Additionally, many of these vehicles are fully electric, raising issues like battery life and access to recharging stations, especially in rural areas.
‘Cooperative Intelligent Transport Systems’ (C-ITS) is a term for interconnected systems that allow vehicles to communicate with other vehicles, road infrastructure, data services, and other road users, including pedestrians and cyclists. Ideally, after being established, C-ITS would both enhance the performance of autonomous vehicles and support other vehicles (once adapted). An example of impressive innovation in this space is Cohda Wireless, now part of the India-based Danlaw Group.
Cohda Wireless began its research in 2004 in Adelaide. Their wireless V2X (vehicle-to-everything) sixth generation unit can be retrofitted to vehicles, connecting them with each other, as well as smart city infrastructure to enable collision avoidance and reduce congestion. For more details, you can visit their history page.
An example of a partially autonomous vehicle is the Mercedes-Benz L3, which has been available in Germany since at least 2023 and can be driven on public roads. In 2024, the EQS Sedan and S-Class models with L3 autonomous capability were released in the US. In September 2024, Mercedes-Benz announced that the German Federal Motor Transport Authority was expected to provide certification, allowing these models to drive on motorways at up to 95 km/h by early 2025, with drivers potentially able to watch TV or surf the internet. See the Mercedes-Benz Group official page for more information.
While some people may be uncomfortable with the idea, these changes are an indication of what is soon to come. For example, the UAE and Saudi Arabia are making strides in this area, highlighted in this November 2024 article: Insights: How insurance will shape a driverless world.
While many countries have made great advancements in autonomous vehicle technology, Australia still has a lot of catching up to do.
The legal and insurance framework of autonomous vehicles
In Automated Safety Law 2026? we posed the question of whether Australia would have widely available L3 autonomous private vehicles and up to L5 public transport by 2030. It is unlikely, putting us at least five years behind Germany. Changes to road rules, criminal law, insurance, personal injury and property damage law are all needed.
For example, Germany has had laws enabling the driving of autonomous vehicles since the Road Traffic Act was amended in June 2017. The country’s laws were further updated in July 2021 with the Autonomous Driving Act, which specifically amends both the Road Traffic Act (Straßenverkehrsgesetz) and the Compulsory Insurance Act (Kfz-Haftpflichtversicherung).
Now that they have been developed, these laws enable the L3 Mercedes-Benz and vehicles like it to drive on German roads. Currently in Australia, we have nothing in place – although we might by 2026.
In April 2024, the NTC released its comprehensive public consultation paper which summarised the minimum legal changes needed for the anticipated ‘small numbers of automated vehicles’ that will operate in Australia in 2026, with changes including:
- The Australian Heavy Vehicle National Law Act 20121 and Road Vehicle Standards Act 20182 are to be amended to support automated vehicles, to be adopted by States and Territories.
- Consideration of changes to legislation affecting commercial and public passenger transport.
- Amendments to the Motor Accident Injury Insurance (MAII) schemes, with the consultation paper noting ‘More work will be required, by state and territory governments and heads of MAII schemes, to review existing recovery mechanisms and develop approaches for the inclusion of ADS [automated driving system]-caused injuries’.
- Enactment of the Automated Vehicles Safety Law (hopefully by 2026), imposing obligations on the Automated Driving System Entity (ADSE). The ADSE is expected to have an Australian-based entity. This is the ‘corporation’ (e.g. manufacturer) responsible for managing safety risks ‘in service’ with the ADS (automated driving system, including hardware and software) ‘over the course of its design life (the length of time the ADSE has nominated to support the ADS)’.
- Establishment of a Federal Safety Regulator.
The Federal Safety Regulator will have to oversee a lot, such as the following (this is only a sample and includes our own commentary):
- Safety: The ADSE will have obligations, but there is likely to be discretion given to the manufacturer regarding the extent and timing of support. If the ADSE is not a manufacturer (there are no manufacturers based in Australia, except for test vehicles), it must establish a sufficient ‘relationship’ with the manufacturer.
- Repairers, maintainers or modifiers: One option is for the ADSE to authorise these, but due to competition and choice issues, this might be impractical. Instead, legislation would impose safety obligations on the repairer. However, not just any repairer can qualify; there will be a register of authorised repairers.
This situation presents options for litigation: against the manufacturer or the repairer (product liability) - although this leads to questions around what happens if the repairer is unauthorised. What are the insurance ramifications? Exemption from a policy might mean no compensation from an insurer, causing people to suffer through no fault of their own. What happens if the vehicle has been modified after sale? - Consumer understanding: There is a requirement for the ADSE to provide education surrounding the use of autonomous vehicles. Laws against misleading marketing would apply, including offences, which we are already familiar with under existing consumer protection legislation.
One concern is the complexity of litigation in Australia surrounding product liability enforcement under existing laws, and how this will apply to faults caused by the ADS.
The proposed legislation needs to anticipate the much greater volume of CTP claims and/or product liability claims compared with the current relatively low volume of product liability claims for motor vehicles. It should ensure that the legal responsibility of the ADSE is enforceable and that the litigation process is simpler to manage (especially in such high volume), with necessary insurance covering the risk.
Even if the volume of litigation decreases due to the safety advantages of autonomous vehicles, litigation based on product liability law is currently costly and complicated. In autonomous vehicle accidents, identifying a driver at fault is not straightforward. Instead, liability may rest with software developers, manufacturers, or third-party service providers.
Identifying the cause(s) of an accident and ensuring responsibility can be challenging, especially when multiple parties may be involved. This complexity extends to the second-hand vehicle market, where the driver is even more remote, not having signed the original sale agreements.
The NTC is seeking to address these issues for autonomous vehicles ‘over the course of its design life’. Hope springs eternal.
How do the risks and rewards of autonomous vehicles stack up?
The unique risks associated with autonomous vehicles require special attention in the legal and insurance framework. One significant risk is that drivers may believe they do not need to pay attention, assuming the vehicle will handle everything.
This behaviour is particularly problematic with the partial autonomous features currently available, as demonstrated in a recent study by the Insurance Institute for Highway Safety – Rinse and repeat: behavior change associated with using partial automation among three samples of drivers during a 4-week field trial.
The heavy reliance on technology in these vehicles also magnifies the consequences of software failures when drivers are not attentive.
On the other side of the equation, there is a lot of support for the safety aspects of autonomous vehicles. ‘What is the risk; what volume of claims?’, the chorus cry in favour of autonomous vehicles.
As an example, Waymo has been offering robotaxis in select cities in the USA (Phoenix, San Francisco, Los Angeles, and Austin) for the past couple of years. In a review conducted in September 2024 (New Data Hub Shows How Waymo Improves Road Safety) Waymo compared their safety with human drivers. Based on their first 22 million miles driven, Waymo’s autonomous robotaxis had 73% fewer injury-causing collisions and 84% fewer airbag deployment collisions (we can infer they are low impact collisions) compared to human drivers. In San Francisco, this statistic was even higher at 91%.
This is a long way from saying autonomous vehicles are perfect. They aren’t. The argument for the safety benefits of autonomous vehicles might rest more on the comparison with how bad human drivers can be. Autonomous vehicles never drink alcohol and drive, get drowsy and have a ‘micro-sleep’, or get distracted by mobile phones. The ADS detects and responds more quickly to hazards, such as a vehicle running a red light.
There are other advantages such as accessibility, reduced traffic congestion, reduced emergency department presentations, long-haul transport efficiencies and more (see our article: Driverless law - beyond 2021).
Implementing autonomous vehicle legislation in Australia - what’s the hold up?
When you consider that L3 autonomous vehicles have been available and allowed on public roads in some countries for at least a year, it is astonishing that we must wait here in Australia. Or is it?
Australian laws are being formulated based on the experiences and lessons learned from other countries. Without insurance coverage for these vehicles, it doesn’t matter what laws are in place because people will not buy them if they are at risk. CTP personal injury insurance is compulsory to protect us (hence the ‘C’) - the problem is whether governments will step in to cover damages caused by an overseas software company at fault.
We’re not hopeful, and for insurers, this will become an additional risk.
Even if insurance was not compulsory, why would you take the risk without it? If a human driver catastrophically injures a pedestrian, their CTP insurance (with a premium measured in hundreds of dollars) covers them for potentially millions of dollars in losses. Without it, the negligent driver would have to pay out of their own pocket.
This leads to more questions, like:
- How will CTP insurers, or even property damage insurers, price the risk of autonomous vehicles to make it affordable?
- Will CTP insurance cease to exist as autonomous vehicle uptake leads to more relevant product liability insurance?
- Will the insurance be available at all?
Overseas, some insurers have stopped covering some autonomous vehicles due to their high repair costs and the complex uncertainties surrounding the market, including safety concerns.
To paraphrase APRA Executive Director Sean Carmody’s speech made at the Future of Insurance 2024 conference – insurance protects and provides individual peace of mind, enables investment in infrastructure, allows businesses to operate, and supports consumer confidence.
None of these boxes are ticked yet for autonomous vehicles in Australia.
While we wait for Australian law and insurance to cover the use of autonomous vehicles, it's clear that Australians, our hospitals, businesses, and economy are missing out on the obvious safety and efficiency benefits.
1 Heavy Vehicle National Law Act 2012 (this link is to the Queensland legislation which is an example of the legislation adopted in all Australian States and territories except Western Australia and the Northern Territory).
2 Road Vehicle Standards Act 2018
