Join us as we take a drive down AV boulevard with the experts at Dykema to put you in pole position for a career working on the self-driving revolution.
Joel Poultney, January 2020
Who remembers the horse and cart? Not us. As technology has continually trundled forwards, it has pulled with it the automotive industry. And right now, how we get from A to B looks poised to undergo a particularly radical transformation. The conversation around self-driving, or autonomous, vehicles is now serious. In fact, talk has turned to significant progress. Autonomous vehicles are in use, on streets in the US, right now. Waymo, a subsidiary of Google’s parent company Alphabet, has taken its tests the furthest, operating ‘robo-taxis’ in Phoenix. Driver assistance systems, such as Nissan’s ProPilot Assist, which take control of a car in particular situations (e.g. when coasting on a freeway, or parking) are pretty common. There’s Tesla too, whose autopilot systems have been the subject of international headlines.
"For the producer, for the true believers who are pushing the industry forward, they think they’re saving lives. And that’s why they do it; it’s the driving force of what they do.”
The wider picture is this: faced by intensified safety fears, climate change concerns, overburdened urban transport systems and decreasing car ownership among millennials, traditional car companies are teaming up with tech giants to put self-driving cars at the forefront of their business plans. But will their plans really become a reality? The money at play would suggest so. Big investors, like Japan’s Softbank, are channeling capital into development, while the business models of companies such as Uber and Lyft simply aren’t viable without an AV future. If you have any doubts about the future of AV, you have only to realize how much is at stake if things don’t head in an autonomous direction. And, thankfully, that doesn’t just apply to money. Mark Malven, co-leader of Dykema’s mobility and advanced transportation team, feels one motivation stands out: “I think a lot of people in this space are driven by safety concerns. For the producer, for the true believers who are pushing the industry forward, they think they’re saving lives. And that’s why they do it; it’s the driving force of what they do.”
In fact, fully autonomous vehicles present many opportunities: they could reduce accidents, pollution, and traffic; save time, labor, and resources; provide an energy storage solution for renewables, increase mobility for the immobile... the list goes on. But questions abound about their implementation, regulation and the effects they will have on the industries, jobs and livelihoods with which they intersect.
The legal industry won’t escape these effects. Lawyers won’t be in the passenger seat either: they’ll be instrumental in facilitating and shaping the revolution that looks set to arrive. One law firm that’s put itself firmly behind the driver’s wheel is Dykema. Born in the Motor City, the firm has a storied history with clients from the automotive industry. Its lawyers, adapting to an industry in flux, have sped ahead of the AV curve. We picked the brains of three of the firm’s experts - Laura Baucus, Mark Malven, and Brian Smith - to explore the intricacies of this transport revolution, and to discover the opportunities and challenges it presents to the legal profession.
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So where is this road headed? Every expert, it seems, has their own vision of what a world with effective, safe AV technology will look like. Half the challenge of working in an emerging sector is seeing the wood for the trees, and without a truly developed understanding of the commercial issues at play, attorneys will be left floundering. This applies to transactional, regulatory and patent attorneys, as well as litigators. Mark Malven has this advice for any young hopeful eyeing the sector: “First pick an existing discipline – for example insurance, transactions or litigation – and then grow to understand and remain on top of what’s happening. You should be thinking, researching, writing, and speaking about the legal issues that will emanate in your field as autonomous vehicles are introduced. The aim is to connect the dots and build yourself as an expert within your discipline. I do believe that those who do that and become thought leaders will become involved and acknowledged as experts in their discipline and opportunities will come their way.”
So let’s get started. To see the world as those pursuing an AV future do, the perspective of John Krafcik, Waymo’s CEO, is useful. He believes public reliance on cars is typified by the “occasional-use imperative.” His observations that they routinely sit idle, that they depreciate in value, and that the accidents they cause – in partnership with human error – account for untold financial, emotional, and physical damage, form a shopping list of problems to solve.
Let’s examine the first: for how long each day is a car actually in use? Unless you’re carrying out some dangerous multi-tasking right now, the car-owners among you are probably picturing your pride and joy sitting forlornly in a vast parking lot. It spends hours like this: occupying space, costing you money, and serving nobody any actual good. You’ve heard this before of course. This is the argument for public transport. But cars are more flexible – they don’t need static infrastructure (e.g. railway tracks) and can therefore provide links to those harder to reach locations.
“The younger, millennial generation are much more accustomed to ride-sharing. They are more used to the idea that you don’t need to own a car; you just jump in a vehicle and it transports you from point A to B without you having to pay the traditional overhead."
One vision of our AV future therefore sees cars as public transport. Imagine a world where cars are shared, controlled centrally, and orderable just like an Uber or Lyft. Cars would be full, meaning less traffic and less pollution. Traffic would be managed efficiently. And there’d be far less need for parking facilities, freeing up crucial space.
But shared ownership is scary to many. The car is one of the true American symbols of freedom. Brian Smith, a member of Dykema’s litigation group who focuses on product liability, believes “people aren’t ready to surrender their current vehicles. They want to hold on to their traditional, gas-powered, combustion engine vehicles.” Smith even jokingly describes how he typifies one side of a generational divide. “The younger, millennial generation are much more accustomed to ride-sharing. They are more used to the idea that you don’t need to own a car; you just jump in a vehicle and it transports you from point A to B without you having to pay the traditional overhead. Someone like me still feels very awkward with that idea. I want my car! I want the autonomy that makes America resistant to mass-transportation in general.”
Regardless of resistance, respected thought suggests things might head in that direction some day. For now, a more tangible vision of AV implementation would involve shuttles for campuses or small towns. Away from personal use, the commercial applications could be widespread. UPS has already begun using trucking startup TuSimple, to move goods between Phoenix and Tucson.
One thing is for certain: the investment is already there for this sector. Firms like Dykema are busy working on the finance and corporate elements of the prolific investment, incorporation and production which is now underway. Where money flows in such vast amounts, transactional lawyers will find much work.
Regulators, mount up
As it stands, there isn’t specific Federal regulation regarding Autonomous Vehicles. Instead, there are simply ‘voluntary guidelines,’ put out by the National Highway Traffic Safety Administration, an approach labelled as laissez faire by some. A bill was proposed in 2018, but didn’t make sufficient progress in the Senate. Instead, individual states have been the driving force, though it’s anticipated that Federal action will soon pre-empt these state laws. Malven outlines the approach of regulators thus: “Because they don’t understand the technology, or which technologies are going to be paramount, they’re taking a hands-off approach to regulation and being more trusting of the companies than in other areas.” One fear is that other countries may push ahead while the US delays.
Laura Baucus, leader of Dykema’s financial services litigation practice group and member of its Automotive Industry Group, also has her say on the government’s approach to AV: “There’s a very substantial, very detailed, standard that US automobiles need to meet by NHTSA. There’s some draft guidelines that exist for autonomous vehicles, but there’s absolutely going to be legislation federally. That was the same with other new technology from ten, twenty years ago – like airbags. This isn’t a totally new game changer; there have been new technologies introduced to automobiles over the past 30 years. In 10 years the tech supplier will just be another type of supplier that works with the OEMs [original equipment manufacturers.]” All the same, the current legal situation provides intrigue for Baucus in her work: “It’s definitely an interesting legal exercise as you’re taking the cases and the laws that have been developed over a century that pertain to standard automobiles and you’re looking at the best way to apply them to autonomous vehicles.”
A safe new world
While regulators must deal with the tricky points of implementation, the clear and attractive advantages of AV remain. Brian Smith puts it like this: “As a consumer I can’t wait to get in a car and say, ‘take me to work!’ That change will allow me to do what I want on that commute. I’m terribly excited for it.” Then there’s safety. Over 37,000 people die each year in the US in car accidents, with many more being injured or rendered disabled due to incidents on the road. Predictions around AV see those numbers being reduced dramatically. For Mark Malven, “the safety thing really is it. Obviously all those advantages come, but as by-products. It’s all about safety.”
With accidents becoming a rarity, what does this mean for the insurance industry (and insurance lawyers)? Laura Baucus isn’t so sure that product liability defense teams will become obsolete. “The insurers will just sell different products for autonomous vehicles, and it’s likely to be much more expensive while the technology is new. Once the technology becomes standard like any other product, the price will go down.” Malven also sees a shift: “Assuming that all the experts are right with a lot less crashes, and therefore cases, the stakes will be higher in each case. There will be less of the routine, small dollar incidents and far less uncertainty, too. When there’s an autonomous vehicle involved, there’s so much information about what happened, what caused the crash etc. There just won’t be a whole lot of doubt about what happened.” Shared ownership might kill the private car insurance market, but someone still owns those cars, and they’ll need insurance.
But the ultimate safety dream relies on near universal AV usage. We’ve already touched on why this won’t happen immediately, so we must consider a transition period where traditional vehicles still exist on the road. “As long as these two have to coexist,” posits Smith, “there are always going to be challenges with road sharing.” One problem which has received the most coverage rests on the AI guiding AVs. As Smith points out, the ethical coding exercises required for autonomous technology (generally dubbed ‘trolley problems’) tackle the potentially “chilling thought of artificial intelligence ‘deciding’ life and death,” when faced with a choice of unavoidable collisions.
“As a consumer I can’t wait to get in a car and say, ‘take me to work!’ That change will allow me to do what I want on that commute. I’m terribly excited for it.”
Debates around liability underpin much of the AV conversation, and this is where many litigators will join the party. Baucus rightly draws focus to how historically, “IT and technology suppliers might not have had an impact on safety. Those companies are not used to having a term in their contract that requires them to indemnify the customer for safety or product liability concerns.” But as a car becomes more computer, the tech will become responsible for the safety of the driver and passengers.
Take the cameras fitted to AVs to allow them to monitor their surroundings. Smith suggests that if a vehicle were to get into an accident following a malfunction, the camera suppliers have now “created a huge liability issue that they’re not traditionally prepared for.” It’s murky territory. From the contractual side, Baucus explains, the challenge is “making sure you draw the line broad enough so the OEM is protected if things go awry, while narrow enough that the tech vendor will actually sign it.”
The traditional chain of responsibility – from the part’s manufacturer, to the person who puts it into assembly, to then ultimately the person who puts it in the vehicle – is also shifting. Where in the past, liability could be determined when a vehicle left a manufacturer’s control, functionality will now be both affected and determined by consistent and incremental software updates, which Smith sees as becoming a real “battleground in the future.”
“If you [the manufacturer] have the ability to update a vehicle’s software and make changes remotely,” asks Smith, “are you still exercising control over that vehicle? If you’re under this continuing duty to provide support for vehicles, when does that obligation end?” As a user, can you tell your car not to accept a new update if the software manufacturer is pushing it through to correct something? “And who’s responsible if an individual refuses to update their software?”
The home stretch
As you can see, there are still so many questions. But that’s precisely what makes this sector intriguing from a legal standpoint. Firms like Dykema will provide an opportunity for attorneys to work at the forefront of these truly game-changing projects. And the change is definitely coming – be in no doubt about that.
The Inside View on Dykema: This Detroit dynamo has expanded across the states, offering a deluge of work for budding litigators and deal-doers alike.