Fact Sheet: Autonomous Vehicles and The Importance of Banning Forced Arbitration Clauses

Autonomous Vehicles:
The Importance of Banning Forced Arbitration Clauses

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Autonomous vehicle (AV) technology has great potential but it is also complicated and dangerous. Consumer and safety groups have expressed tremendous concern about this technology and have outlined what needs to happen from a regulatory standpoint to protect public safety moving forward.[1]

Equally important is making sure that the AV industry is held accountable for harms they cause as AVs are not currently safe[2] and experts now believe improved safety is years away.[3]Crashing into other cars, hitting pedestrians, privacy and hacking dangers – these are current problems and ongoing risks for which companies in charge of AV technology and manufacturing must be legally responsible or AVs will never be safe.

Repeatedly throughout history, traditional auto manufacturers have been held legally accountable for placing unsafe cars on the market.[4] However, because the public will access AVs differently than they do traditional cars, AV manufacturers will be able to dodge their legal responsibility for safety. Congress’ failure to change the law could have devastating consequences for both public safety and overall confidence in the technology moving forward.[5]

Under our system of laws, companies that make defective vehicles historically have been brought to court for causing harm and are liable to pay compensation to the people they recklessly hurt, saving lives.

• The financial risks of liability, as well as the publicity around court cases that allow regulators and the public learn about problems, are sometimes the only reason why unsafe cars have been redesigned or removed from the market, and certainly why cars are much safer today than they were decades ago.[6]

• During May 18, 2021, Congressional testimony, Jason Levine, Executive Director of the Center for Auto Safety, put it this way:[7]

Americans’ access to courts has literally saved thousands if not tens of thousands of lives. …[O]ne perfect example is the General Motors ignition switch defect which killed over 174 people and injured many more, [which] was only brought to light because of a civil action that someone brought after there was a death. That’s what uncovered it and led to the  recall, that’s what led to the fix. … Going forward, those same issues remain vitally important. If we have a circumstance where Americans are interacting with autonomous vehicles [and] they lose their right to bring an action should something go wrong, that not only injures that person financially but their injury may not be able to open up what might be a problem and help everyone else.

• Court cases also allow injured victims to be compensated, ensuring that wrongdoers pay for injuries they cause instead of shifting costs onto taxpayers and preserving a free-market approach to holding negligent companies accountable for the deaths and injuries they cause.

AVs will be offered to the public in such a way that companies will be able to use forced arbitration clauses to undermine this effective, centuries-old liability and accountability structure.

• Unlike traditional cars, AVs will be offered to the public most often as an automated mobility-as-a-service platform, similar to an Uber model, or they will be sold directly to the public as Tesla cars are sold today.[8]

• To access an AV, the public will have to agree to a company’s broad take-it-or-leave-it contract, much like they must do for any app or online agreement for any other kind of service today including vehicle-for-hire services like Uber and Lyft.[9]Often these clauses are extraordinarily broad and anti-consumer.[10]

• These contracts include broad forced arbitration clauses, which mandate that disputes be resolved in secretive, rigged proceedings that the company controls, and which keep information hidden from regulators and the public.[11]  In the context of AVs, forced arbitration clauses mean injured consumers “are unlikely to be able to seek justice, unlikely to hold the manufacturer accountable and perhaps most importantly, whatever they do determine will be done in secret so the rest of the public won’t learn what happened.”[12]

• Moreover, courts have already shown a willingness to force arbitration onto parties who never signed such contracts.[13]That means AV companies may be able to block court access for not only AV occupants, but also people in traditional cars that AVs crash into, and even pedestrians who are hit. As the Center for Auto Safety’s Jason Levine put it in Congressional testimony, forced arbitration clauses pose a “real threat” to pedestrians.[14]

• When U.S. senators sought to determine if AV companies intend to use forced arbitration clauses to cover AV crashes,[15]major automobile trade associations responded by praising arbitration and touting their legality.[16] Without a prohibition from Congress, AV companies will have free rein to use these clauses.

Notes