Promoting future technological developments with a holistic and flexible legal framework

by Patrick Ayad, Global Leader Mobility and Transportation, and Susanne Schuster, Senior Associate, Hogan Lovells

Technology for autonomous vehicles (AVs) will continue to rapidly evolve in the next few years.  This rise in innovation is accompanied by the emergence of new mobility players (new entrants) as well as commercial and corporate partnerships, resulting in further transformation of the industry landscape.  While widespread testing of AVs is already being conducted on public roads worldwide for several years, the next step is to create a legal framework sufficient to ensure safety of AVs and facilitate their series deployment and commercialization.

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We are already seeing a lot of legal, regulatory and policy developments for AVs at the international, EU and national level.  Germany has been the first country to adopt an Act on Autonomous Driving allowing the regular operation of AVs on public roads up to SAE/ISO Level 4, and is currently finalizing an Ordinance on the technical requirements and procedure for national approval and operation of AVs.  France recently adopted a Decree allowing the deployment of automated passenger transport services.  Other positive examples are set by the Dutch testing regime and the UK Law Commission’s promising consultations for regulating AVs.  Also, the EU Commission presented a draft for a Regulation for the type-approval of a fully automated vehicle with regard to the automated driving system (ADS) in March.  The recently published updated draft is expected to be final soon and intends to pave the way for an EU-wide ADS type-approval as of mid-2022.

Current efforts made are encouraging in that they seek to provide a legislative framework for safe deployment of AVs.  The shift from conventional vehicles to AVs is a completely unique and disruptive scenario with great economic, environmental, societal and safety value: it is the first time that not only a vehicle is regulated and type-approved, but at the same time also the driving function, which is performed by the ADS.  This calls for a flexible legal framework – an approach that has proven successful for AV testing over many years.

Flexibility is of particular importance when defining the entity responsible for AV type-approval, i.e. the “manufacturer”.  The broad definitions of “manufacturer” which can, e.g., already be found under the type-approval framework Regulation (EU) 2018/858 should at least be retained or taken as a reference.  The use of wider and more open terms (e.g., “manufacturer” instead of “vehicle manufacturer”) will prevent misleading interpretations and delay.  We have seen some legislators somewhat deviating from this, however, the second draft for an EU ADS Regulation steers into a positive direction again.

The question of who can obtain type-approval should primarily depend on the aspect of safety and not on corporate identity or traditional roles.  Safety is the key aspect for consumer trust and achieving and maintaining consumer trust is what the long-term success of AVs will depend on.  The entity assuming the role of the “manufacturer” toward type-approval authorities is the key party as it takes over numerous responsibilities.  This includes regulatory responsibilities (for all aspects of type-approval, conformity of production and market surveillance matters as well as further responsibilities throughout the life cycle and the end-of life), general safety obligations (e.g., related to software updates or cybersecurity) and more.  The legal framework for AV type-approval must therefore be designed in a way that allows the appropriate parties to assume the roles they have sufficient expertise for to fulfil requisite obligations and guarantee safety.  Since the ADS performs the entire dynamic driving task of the AV, the entity that has designed, developed and validated the ADS, including its integration into the vehicle, needs to play a central role in establishing the basis of the type-approval of the vehicle equipped with the ADS.  This may be the traditional supplier or vehicle manufacturer, but also a new entrant or any kind of commercial or corporate partnership among industry players in this field.  Thus, a broad understanding of the term “manufacturer” need to be adopted.

European legislators have an exciting opportunity to regulate the future of mobility including AVs.  They can now make use of their pioneering role by setting best practices that may be adopted worldwide and may help avoid significantly divergent approaches across the global regulatory AV framework.  Long term success and sustainability can only be achieved if the legal framework is receptive to future technological developments, e.g., by adaptable definitions and a flexible system.  Innovation calls for flexibility. Regulating innovation calls for the same.

About Hogan Lovells: Hogan Lovells one of the world’s leading law firms in its dedication to an industry sector focused-approach, enabling us to advise our clients in a sector-focused manner, across practice groups, borders and industries.  Our global Automotive industry sector team has one of the largest and most experienced group of lawyers representing both traditional automotive companies and emerging mobility industry players.

The above article provides a first insight into our recent “Hogan Lovells White Paper: The Road to Autonomous Vehicles”.  To request a copy of our White Paper please contact us at automotive@hoganlovells.com and visit https://www.hoganlovells.com/en/industry/automotive for further details and publications.