A Gaping Loophole Could Shield Autonomous Car Companies From Lawsuits

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Automakers have been urging Congress for months to pass legislation that would pave the way for autonomous cars to be deployed in droves. But consumer advocates are warning that the legislation, as it’s currently written, would prevent consumers from being able to hold manufacturers accountable in litigation, according to CNN.


The news outlet’s story highlighted how the proposed legislation, known as the AV START Act, doesn’t explicitly prohibit forced arbitration between autonomous car manufacturers and consumers.

A person badly injured while riding in a self-driving car would not be able to take part in a class action lawsuit, or sue the maker of the technology. Instead, disputes would be settled in arbitration. Experts say arbitration shifts the balance of power in the favor of big businesses, because they generally hire the arbitrator and will be its repeat customer.


The issue of forced arbitration came up last fall, when Congress passed a law that made it more difficult for consumers to band together and file class-action lawsuits against financial institutions. Instead of playing out in public court proceedings, arbitration is kept in private and provides less-than-favorable circumstances for consumers, according to the Consumer Finance Protection Bureau.

When it comes to self-driving cars, failing to prohibit forced arbitration could put consumers in a difficult position if they end up in an accident caused by an autonomous vehicle.

“The nightmare scenario is that someone is hurt because of a defect and it’s dealt with through a confidential arbitration proceeding that nobody knows about, and then more people are hurt because no one found out about it,” Ed Walters, a robotics law professor Georgetown Law and Cornell Tech, told CNN. “Congress could stick up for the right to sue by prohibiting these kind of clauses, but so far they haven’t.”

Ride-hailing companies like Uber and Lyft have forced arbitration clauses in their terms of service with passengers, CNN noted, which is significant: It’s expected that one of the first commercial uses for autonomous cars will be with ride-hailing entities.


Perhaps unsurprisingly, most companies involved in developing autonomous cars didn’t want to discuss the issue, per CNN:

The largest players in the self-driving car industry, Waymo, GM’s Cruise, Ford, Zoox, Toyota, Tesla, Uber and Lyft, all declined to comment for this story. The Self-Driving Coalition for Safer Streets, an industry lobbying group, also declined to comment.


The proposed autonomous car legislation would allow automakers to eventually deploy up to 100,000 vehicles annually that are exempt from existing auto safety standards, up from the current total of 2,500 vehicles. But the legislation has been hanging in limbo, amid the frenzy that has long consumed Washington D.C. It’s unclear if the Senate plans to vote on the bills any time soon.