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Personal Injury, Privacy

Self-driving vehicles face insurance, privacy concerns

Autonomous vehicles (AVs) — also known as self-driving vehicles — are a reality and all levels of government in Canada need to start exploring their impact on our roads, on the insurance industry and on citizens’ privacy, Toronto lawyer Sharon Bauer writes in The Lawyer’s Daily.

Although countries such as the U.S., Britain, Singapore and New Zealand have created legislation to oversee the development and deployment of AVs, says Bauer, a partner with Wolfe Lawyers, Canada has not been as liberal with regard to this technology.

“While our federal government set a budget of $7.3 million over two years to develop AV regulations, the U.S. invested $200 million toward research, development and infrastructure to support the vehicles. Twenty-one states in the U.S. have enacted AV legislation in some capacity. In Canada, only Ontario has engaged in dialogue about autonomous vehicles,” says Bauer.

In January 2016, she writes, Ontario enacted Regulation 306/15, Pilot Project – Automated Vehicles, which enables the province to issue permits to pilot AVs on public roads under strict conditions.

“For example, AVs on public roads must have steering wheels and pedals, and a driver must always be present. Rigid regulations like these likely detract AV manufacturers from testing in Ontario. Instead, they flock to other countries that offer a more liberal, hands-free approach,” writes Bauer.

Although she says Ontario has taken a step in the right direction by opening its doors to automated vehicles, Bauer adds that there is only so much it can do without Ottawa’s financial and regulatory support.

Legislatures, she explains, must also consider public safety and liability when creating regulations around automated vehicles.

“Collisions involving automated vehicles will inevitably give rise to claims concerning the malfunction of hardware and/or software. Various companies, such as Audi, have already accepted liability of their AVs if they are involved in collisions while in autonomous mode. We will also see claims against third-party applications, which help operate the vehicles. Municipalities may also be held accountable for infrastructure adapted for AV use, without consideration for various safety issues,” writes Bauer.

This technology will also cause disruption within the auto insurance industry, she says, which will require it to transform as regulations are created in response to automated vehicles.

Although insurers rely on historical data to calculate risk, due to the novelty of AVs, Bauer says they lack data on the vehicles.

“The inability to calculate risk causes a significant problem for insurance companies. To overcome this, they will look to automotive companies to share data with them. We will likely see a more collaborative relationship between insurers, who need data, and AV manufacturers, who need the support of insurance companies to protect them,” she writes.

In addition, Bauer says in the article, the data collected on AVs and shared with third-party organizations — such as insurance companies, governments and other manufacturers — give rise to significant privacy concerns that legislatures must consider when drafting regulations.

“In order for vehicles to be automated and interact with their surroundings, they must capture their real-time environment. AVs rely on laser scanners, which are constantly scanning and retrieving data. They also learn personal information about passengers, including their daily routine. All of this data is then stored, likely in a cloud, and shared with other vehicles so they can interact on the road. This is also known as vehicle-to-vehicle communication. The data may also be sold or transferred to third parties,” she writes.

It is unclear whether passengers in AVs will be able to turn privacy settings on or off, or request that their data not be shared, says Bauer.

“If they do, are they ultimately limiting the automation of the vehicle and therefore exposing themselves to liability risk?”

AV manufacturers must be aware of the Personal Information Protection and Electronic Documents Act and ensure they comply with it, says Bauer, and consider the privacy implications when crossing borders and sharing information in a jurisdiction that legislates protection of privacy in a different way.

Cybersecurity is another concern, she says, because if an AV data hub or a connected third party gets hacked, not only can the malicious party obtain sensitive personal information, but it may also take control of the AV, and potentially cause harm by remotely operating the vehicle.

As such, writes Bauer, “It is vital for manufacturers to recognize their vulnerabilities and implement security safeguards when handling sensitive information. They should obtain bare minimum personal information, store this information securely, and dispose of information they no longer require in a safe and secure manner.”

Ultimately, she says, obtaining and maintaining cyber insurance may be inevitable for all AV manufacturers.

To Read More Sharon Bauer Posts Click Here
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