In short
An automated driving system does not automatically remove access to compensation. The incident, jurisdiction and responsible parties determine which insurance, negligence or product-liability pathway applies.
The Legal Framework
1. Adapting Existing Liability Rules to Automated Driving
Road laws developed around human driving. Highly automated vehicles require clearer rules for the automated driving system entity, safety operators and insurance. That challenge is not a blanket absence of legal duties or remedies.
Critical Legal Issues for Victims
2. The barriers injured claimants face when autonomous vehicle technology causes harm.
1Identify the Responsible Parties
Responsibility can extend beyond the person at the wheel
A manufacturer, operator or another entity may have a relevant duty. Removing the human driver changes the analysis; it does not mean negligence can apply only to a human actor.
Key Points
- Identify who designed, supplied and operated the system
- Check the vehicle and insurance arrangements
- Preserve evidence of the alleged failure
- Separate system faults from supervision failures
What This Means
The defendant and cause of action must fit the incident.
2The Development Risks Defence
A statutory defence the manufacturer must establish
Under ACL section 142(c), the manufacturer bears the burden of establishing that knowledge at the time of supply could not have revealed the safety defect. A claim that a failure was unexpected does not by itself prove the defence.
Key Points
- The claimant must establish the defective-goods claim
- The manufacturer must establish any relied-on defence
- The statutory test concerns discoverability at supply
- Technical evidence may be central
What This Means
Do not reverse the burden of proving the defence.
3Safety Operators and Supervision
Human supervision is assessed alongside system design
Where a safety operator is present, their instructions, attention and ability to intervene matter. The negligence assessment is fact-specific. Imbree concerns human driving; it is not an Australian judgment deciding autonomous-system liability.
Key Points
- Examine the operator’s duties and instructions
- Check warnings and opportunities to intervene
- Contribution between defendants differs from claimant fault
- Preserve system and supervision records
What This Means
More than one party may bear responsibility.
4Check the Applicable Motor Insurance Scheme
Coverage cannot be reduced to a blanket yes or no
The NTC identified possible gaps under existing schemes and recommended coverage for injuries while an automated driving system is engaged. It did not conclude that every automated-vehicle incident is excluded from CTP.
Key Points
- The state or territory scheme matters
- Vehicle use and the cause of injury matter
- Queensland CTP remains fault-based
- Negligence and product-liability pathways may also be relevant
What This Means
Assess the actual claim before ruling out motor insurance.
5No Uniform National Framework
The National Transport Commission's recommendations have not been uniformly adopted across jurisdictions
In 2019 the NTC recommended, and transport ministers agreed, that CTP schemes should cover people injured or killed while an automated driving system is in control, with insurers able to recover their costs from whoever is at fault. That approach has not yet been uniformly adopted across Australian jurisdictions, creating inconsistent protections.
Key Impacts
- Victim rights vary depending on the state or territory where the incident occurs
- Interstate travel creates jurisdictional uncertainty
- Manufacturers and fleet operators face inconsistent regulatory obligations
- Legal precedent in one jurisdiction may not apply in another
The Consequence
The applicable scheme must be checked; reform seeks more consistent treatment of automated-system injuries.
Case Study
3. The Uber ATG Arizona Crash: Safety and Responsibility
The fatal Arizona test-vehicle crash illustrates failures of system design and human supervision. It is an overseas example, rather than a ruling about Australian compensation law.
How the System Works
4. The Current Legal Framework for Autonomous Vehicle Liability
Insurance, negligence and product liability may overlap. The correct pathway depends on the jurisdiction, vehicle operation, alleged failure and available evidence.
Product Liability Under the ACL
ACL section 138 provides a defective-goods pathway where its requirements are met. A harmful outcome alone does not establish every element of the claim.
Negligence and Multiple Parties
System design, operation and supervision may each be relevant. Contribution between responsible parties is different from a reduction for the injured person’s own contributory fault.
Motor Accident Insurance
Existing coverage must be assessed under the particular scheme. Queensland CTP is fault-based; other jurisdictions have different benefits and conditions.
The NTC Recommendations
In 2019 the National Transport Commission recommended that CTP schemes cover injuries caused while an automated driving system is engaged, with insurers able to recover from whoever is at fault. In 2020 it recommended a general safety duty on the Automated Driving System Entity, the company that certifies the system. Neither is yet in force across Australia.
Essential Reforms
5. Legislative Changes Needed to Protect Injured Road Users
Reform should give injured road users a clear insurance pathway, define automated-system responsibilities and support access to technical evidence. Existing rights should be preserved while specific gaps are addressed.
Legislative Reform
Designate the ADSE as Primary Liable Party
The Automated Driving System Entity — whether manufacturer, fleet operator, or software developer — should bear primary liability for autonomous vehicle incidents, with the ability to seek contribution from other parties in the supply chain.
How This Works: The NTC's June 2020 decision regulation impact statement, In-service safety for automated vehicles, recommended a general safety duty on the ADSE. The EU has gone further on liability: its Product Liability Directive (EU) 2024/2853 treats software, including AI systems, as a product for products placed on the market after 9 December 2026.
Insurance Reform
Close Gaps in Motor Accident Coverage
Schemes should clearly address injuries caused while an automated driving system is engaged.
In Practice: A clear pathway can reduce disputes about the proper insurer and defendant; existing claims should not be assumed unavailable.
Consumer Protection
Review the Development Risks Defence
Whether the defence remains appropriate for safety-critical automated systems is a reform question.
In Practice: Under the existing law, the manufacturer must prove the defence. Access to technical evidence can still be a practical difficulty.
National Harmonisation
Adopt Uniform National Standards
All Australian jurisdictions should uniformly adopt the National Transport Commission's recommendations to ensure consistent victim protections regardless of where an autonomous vehicle incident occurs.
Current Inconsistency: Victim rights currently vary depending on the state or territory where the incident occurs, creating jurisdictional uncertainty and inconsistent legal protections for injured road users.
Regulatory Framework
Implement the Automated Vehicle Safety Law
The proposed Automated Vehicle Safety Law would establish dedicated national oversight and safety duties for automated driving system entities. It should complement existing compensation law, rather than be treated as the source of every existing duty.
Progress Update: The NTC’s program proposes a nationally consistent regulatory framework. Its timetable depends on the Commonwealth and state and territory changes required for deployment.
Legal References
6. Key Authorities and Statutory Framework
The following authorities explain existing duties, defective-goods claims and the NTC’s proposals. A proposal for a national safety regime is distinct from the duties and compensation rights already available.
Imbree v McNeilly (2008) 236 CLR 510
High Court decision confirming that the standard of care in negligence is objective — the question is what a reasonable person in the defendant's position would have done.
Key Finding: Its objective standard may inform an assessment of human supervision; the case itself did not decide autonomous-vehicle liability.
Impact on Victims: Examine the actual duties and conduct of the supervisor alongside any system or organisational failure.
Australian Consumer Law, Section 138
Section 138 provides a claim against a manufacturer where a safety defect causes personal injury and the statutory requirements are met.
Application to AVs: A defective vehicle or system may engage this pathway. The evidence must establish the relevant defect and causal connection.
Impact on Victims: This is one potential pathway, rather than the only remedy for every automated-vehicle incident.
Australian Consumer Law, Section 142
Section 142(c) provides a discoverability defence that the manufacturer must establish.
Manufacturer Protection: Read ACL section 142: the test concerns the state of scientific or technical knowledge at supply.
Impact on Victims: The claimant’s defective-goods case and the manufacturer’s defence have separate burdens of proof.
Motor Accident Injuries Act 2017 (NSW)
NSW’s motor accident scheme has its own statutory benefits and damages rules. Its application depends on the statutory definitions and the incident.
Limitation: The NTC identified potential gaps under existing schemes and proposed specific reforms for automated-system injuries.
Impact on Victims: Check coverage on the facts; do not assume all automated-vehicle incidents fall outside motor insurance.
National Transport Commission: In-service safety for automated vehicles, decision regulation impact statement (June 2020)
The NTC's decision paper on how automated vehicles should be kept safe once they are on the road. It set the approach behind the Automated Vehicle Safety Law now being drafted.
Recommendation: A general safety duty on the Automated Driving System Entity (ADSE), the company that certifies the system, enforced by a single national regulator under Commonwealth law.
Impact on Victims: A dedicated ADSE safety regime would sit alongside existing duties and potential insurance, negligence and product-liability claims.
General information only, not legal advice. Speak to a lawyer about your own circumstances.
Cite this paper
Carter Capner Law, ‘Duty of Care in the Age of Autonomous Vehicles: Who Bears Liability When the Algorithm Fails?’, Carter Capner Law (1 May 2026), https://cartercapner.com.au/journal-articles/duty-of-care-in-the-age-of-autonomous-vehicles-who-bears-liability-when-the-algorithm-fails/