E-scooters present challenges for our liability framework
This article first appeared in Insurance Day, September 2021.
New technologies bring both opportunity and risk, the balance of which is most often finely balanced. Success or otherwise is largely dependent on the impact on the particular ‘ecosystem’ in which that technology will operate.
Micromobility vehicles (including e-scooters) are an emerging technology that offer several potential benefits, but also presents a number of perils and challenges to our transport ecosystem and the liability framework that underpins it.
The pandemic has prompted a socially distanced commuting public to largely avoid public transport, and has accelerated the role that micromobility vehicles – by their nature single-user vehicles – may have in the future. Recognising this, the UK Government is currently undertaking rental e-scooter trials - brought forward a year and expanded in scope across the country. However, several trials have been curtailed or cancelled by local authorities because of misuse and abandonment of e-scooters.
Outside of those trials and despite it being illegal to do so, an increasing number of privately owned e-scooters are also being used on public roads and in public places. Enforcement of the law appears sporadic and very few users of e-scooters take out third-party liability insurance. The proverbial genie is out of the bottle.
With e-scooters capable of causing significant or fatal injury, and/or property damage to other road users and adjoining properties to roads, cycle lanes and other public places – the spotlight is firmly on how micromobility vehicles should be classified.
Under the existing regulatory regime most, if not all, micromobility vehicles are considered motor vehicles. As such they require registration, licensing, testing, plating, an appropriate level of driving license and critically, mandatory third-party motor insurance cover.
Classification more akin to electrically-assisted pedal cycles or bicycles and less akin to mopeds or motorbikes would remove the need to carry mandatory third-party insurance cover. This may leave a non-fault party who has suffered injury or loss at the hands of a micromobility user, without redress to compensation.
The existing mechanisms and frameworks that provide a safety net for innocent parties injured in road traffic accidents caused by uninsured and/or untraced drivers would not provide protection. The fear of there being no insurer of last resort for innocent parties in those circumstances is a very real one.
However, the very valid point has been made that bicycle users have no need to have background third-party insurance cover in place and this has never presented a significant mischief to either other road users or the insurance market. However, if e-scooters are deemed a significantly higher risk profile and cause more or more serious road accidents than bicycles, the point very quickly becomes invalid and no-cover issues start to look daunting again.
First and third-party cover has been afforded to the various hire companies now trialling e-scooters under test conditions. Insurtech companies are likely to play an important role in providing insurance products in this space. It remains to be seen to what extent household or motor insurers will offer bespoke insurance or will extend and provide gap insurance to cover first and third-party loss on privately owned e-scooters.
Whilst it seems unlikely that existing household policies would extend to cover third-party cover for privately-owned e-scooters, it is at least possible this could happen if e-scooters are categorised as a non-motor vehicle. With the future direction of regulation as yet to be determined, insurers will certainly need to check to ensure their primary or add-on products do not unintentionally extend to cover e-scooters.
Other stakeholders will equally have concerns. Local authorities will be wary of the implications of mass introduction of e-scooters to urban centres and the related infrastructure costs, the potential requirement for wider provision of and capacity for lane segregation of micromobility vehicles. Whilst many e-scooters will be charged in public areas and off site, some larger employers will need to start to address charging and storage facilities on-site and will need to risk assess the potential public and employer liability claims that may follow.
Our recent research and report on the behavioural changes and risks associated with COVID-19 identified that over one-in-ten people (11%) envisage that they will use either an e-scooter or e-bike to form part of their journey to work. With that in mind, a cautious approach will be necessary to ensure that innovative new vehicles such as e-scooters are introduced in a safe and structured manner.
Perhaps other countries can provide a useful roadmap that the UK can consider. France is one country that has introduced such legislation for the use of motorised personal transport: ‘engins de déplacements personnels motorisés’. The legislative framework enables mayors to adapt the traffic rules for these vehicles to local issues, including restricting authorisation of their use to certain categories of public roads. Civil liability insurance was made mandatory, with failure to have such punishable by a fine of €3,750.
Despite such safeguards, it is reported Paris may yet ban the use of e-scooters following at least three fatal incidents in the city. A lack of enforcement of the rules cited as a particular problem and illustrates that the legislative framework – whilst an essential foundation – is just one of many components required.