Stanford Law Professor Robert Rabin: Rethinking Tort Liability

It’s hard to imagine a morning traffic report that doesn’t mention a significant number of automobile accidents. Yet that’s what the future holds when driver error, currently the cause of the vast majority of these accidents and consequent injuries and deaths, should be largely eliminated with driverless cars. But even with the advent of these highly automated vehicles (HAVs), accidents will happen. And for Robert Rabin, A. Calder Mackay Professor of Law, this raises an interesting question: Does it make sense to retain the tort liability system to compensate victims of HAV-related accidents once HAVs have become a significant mode of transportation and driver negligence is no longer a major cause of accidents?

According to the forthcoming article in the Virginia Law Review, “Automated Vehicles and Manufacturer Responsibility for Accidents: A New Legal Regime for a New Era,” co-written by Rabin with Kenneth Abraham, the David and Mary Harrison Distinguished Professor of Law at UVA, the answer is a resounding “no.” Instead, Rabin and Abraham propose replacing the tort remedy with a no-fault system, similar to the workers’ compensation model. Just as the Industrial Revolution called for a new method of compensating victims of workplace accidents, so too, they say, does the transportation revolution require revamping the compensation mechanism for accidents involving HAVs.

Rabin’s focus on HAVs flows from his career-long effort to combine his interests in historical and doctrinal developments in tort—especially as they relate to health and safety issues—with critical current developments. This has led him to the study of tobacco control, which included a three-year stint as the program director of the Tobacco Policy Research and Evaluation Program at the Robert Wood Johnson Foundation and to authorship of a series of articles focused on 9/11 compensation, to cite just two examples.

“I’ve always gravitated to policy issues that are in the forefront,” Rabin says. “Automated vehicles fall into that category. I’m not particularly interested in cars; it’s the policy that I find interesting.”

As an initial matter, the new system would go into effect only when a substantial number of all vehicles registered in the U.S. are HAVs, defined for this purpose as vehicles that incorporate “high automation” or “full automation.” While Rabin and Abraham propose that it should start when HAVs are 25 percent of all registered vehicles, this is “not set in stone,” Rabin says.

Stanford Lawyer Magazine Issue 99
Illustration by: Jeffrey Decoster

ONCE THE DESIRED THRESHOLD HAS BEEN REACHED, the need for a non-tort compensation system will stem largely from the difficulty of determining product defects in HAV-related accidents. “Because the contributions of drivers and other third parties will become minimal in these accidents,” Rabin explains, “the focus will be on highly complex and esoteric alleged engineering failures, rather than on blameworthiness.” At this juncture, “the concept of ‘reasonable alternative design,’ which is currently used in the tort system to evaluate design defects, will likely become distinctly unhelpful, in particular, as HAV software increasingly incorporates machine learning and thus continuously revises and updates the algorithm-based driving instructions. Judges and juries are not well-equipped for assessing those sorts of issues.”

Rabin proposes replacing tort liability in HAV-related accidents with Manufacturer Enterprise Responsibility (MER), a uniform federal program that would be “a manufacturer-financed, strict responsibility bodily-injury compensation system, administered by a fund created through assessments levied on HAV manufacturers.”

MER, which would be provided automatically for all HAVs at the point of sale, would be the sole mode of recovery for HAV occupants and certain third parties, such as pedestrians, bicyclists, motorcyclists, and other bystanders who are involved in HAV-related accidents. It would cover “all bodily injury arising out of the operation of the vehicle, up to specified benefit limits,” says Rabin, “except for injuries caused by the HAV owner’s own negligence,” such as failure to install software updates. Property damage would continue to be covered by conventional insurance, such as collision, comprehensive, homeowner, or similar policies.

INITIALLY, MANUFACTURERS WOULD CONTRIBUTE TO A MER fund based on annual market share. “Eventually,” Rabin explains, “contributions would be based on the frequency and severity of payouts for each manufacturer’s HAVs. This should incentivize manufacturers to optimize safety.”

The processing of claims would rely on the HAV owner’s auto insurer. The insurer would receive claims and submit them to the fund, which most likely would be a small division of the Department of Transportation.

While the devil may be in the details, Rabin and Abraham’s comprehensive law review analysis leaves little to the imagination. Instead, they provide an intricate legal road map for navigating what is sure to be a dramatic transition to a world in which a car trip may demand no more from a driver than saying, “Take me to the nearest Starbucks.”  SL