The Laws Have Changed: Telematics & Liability

But utilizing telematics for better control over inventory, tracking driver performance, and getting less expensive usage-based insurance for the vehicles can open a Pandora’s Box of sorts for exposure to liability in a dynamic, changing legal landscape.

“Let me quote, depending on your preference, Voltaire or Spider-Man: ‘With great power comes great responsibility’,” noted auto technology legal expert Bryant Walker Smith half-joked about the power of telematics and greater autonomy in vehicles.

“Telematics is increasing power, assertion of control over products that you previously couldn’t (control); access to systems and users of these systems.”

He also told attendees of the TU Automotive Connected Fleet conference, “There are new ways of being negligent, new ways of doing harm. Today if someone is drunk and crashes, you’re not liable. But in the future, what if you know a person is speeding or based on their record or metrics from vehicles they are a reckless driver—or they are probably inebriated given the time, circumstances, and behavior. What if you can shut off the power or change their speed you may have an obligation to act. This could mean significantly expanded obligations for fleet owners.”

Smith regularly poses these types of ethical and procedural questions to college students; he taught the first course on the self-driving car and is currently assistant professor at the School of Law and School of Engineering at the University of South Carolina and a fellow at the Center for Automotive Research Stanford (CARS).

Gail Gottehrer is a litigator and partner at Axinn, Veltrop & Harkrider where she frequently represents insurance companies and handles employee litigation matters and class action trials before juries.

Gottehrer, who also teaches at Columbia University, agrees that using telematics may put more of the onus on the fleet owner: “If you can monitor someone driving erratically, you suspect they’re drunk or too tired to drive, a court may say you reviewed the data and chose to do nothing or you did something ineffective. On the flip side, if you have (data) and didn’t choose to review it, you have constructive knowledge. The courts are skeptical…you could be found liable–you the company—under those kinds of theories which we’re likely to see.”

The experts say that in current practice the decisions will vary not only from state to state but also from court to court as judges rule on matters that are not always covered by current legislation. “You can’t count on what you’re going to get in court,” says Gottehrer, the litigator, adding, “A lot of it comes down to who’s your judge.”

One issue still disputed is the burden on companies for discovery—how much data can be required even for firms not actively in a dispute? Gottehrer said judges are not showing a lot of sympathy to arguments that it can be too costly and burdensome for companies to produce data even though it may be sensitive, expensive and time consuming for IT departments to comb through and compile the data.

She argued that a company tracking vehicles could be compelled to produce data as evidence in cases of drug deal locations or child custody battles to show whether state lines were crossed.

On the upside, “if you can show a driver is not negligent, it can be used to exculpate you in the best situation”—which would be evidence showing a driver in the fleet has an excellent track record.

As for privacy issues when it comes to tracking fleets, the geolocation data can uncover patterns and private matters such as frequent visits to AIDS clinics or a psychiatrist—conditions that might have been reasonably protected under HIPAA security laws but could be revealed by a breach.

Gottehrer does not see fleets or insurance companies faring well in court when it comes to such breaches. “Transparency is the best bet, there’s no silver bullet. The courts are reactive, the law can not possibly keep up with technology so while we’re trying to catch up, using these legal terms that judges are confident with, such as informed consent, is a good strategy to adopt.”

Meanwhile, global companies need to consider varying definitions of privacy from region to region and country to country. There’s less of an emphasis on personal privacy in the US than in Europe, according to Smith.

But harking back to his philosopher/Web-Crawler quote, the professor noted with collecting great data there are “increased obligations to monitor and supervise and not act negligently to dangers you could know about or discover…If you’re hacked, you could be subject to all kinds of liabilities, legal and non-legal issues. Data is a blessing and from a legal perspective, a bit of a curse.”

Get the latest on Safety, ADAS and Autonomous at TU-Automotive Detroit (June 3-4). It will answer the big ethical, human and legal questions facing the automotive industry right now.

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