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Legal Notes: Game-changing autonomous construction requires new rules

John Bleasby
Legal Notes: Game-changing autonomous construction requires new rules

The increased use of A.I.-driven autonomous vehicles on construction sites appears to address major challenges facing the industry. These devices have the potential to improve productivity by undertaking repetitive work, both consistently and without pause, over longer periods than is possible with human operators. Autonomous vehicles can also help address skilled worker shortages as well as a number of worksite safety concerns.

“The increased use of autonomous construction equipment will likely pave the way for the automation of construction workflow altogether, involving the synchronous co-ordination of multiple machines and different types of devices, creating a data-driven site capable of improving productivity while minimizing execution risks and site hazards,” write Marin LeciRodney SmithPatricia Morrison and Grace Jiyeon Shory of Canadian law firm Borden Ladner Gervais (BLG).

Mining and agriculture have been the early adopters of autonomous machinery. For example, Komatsu devices have reportedly hauled billions of tons of surface materials at various mining sites around the world. The company expects to deploy an additional 150 autonomous trucks at Canadian oilsands project sites over the next few years.

However, construction sites are typically more complex and unpredictable than mining sites and crop fields, writes Keri Bedeau, senior associate at BLG in Toronto. As a result, there are unique legal and insurance challenges that need consideration.

These new challenges and their associated risks can be summarized as follows: worker training and safety; capital costs and ownership options; liability risks resulting from property damage or delays due to malfunction; and cyber security concerns due to data sharing.

Many relate specifically to vehicle operation. Therefore, the BLG authors suggest that insurance underwriters should consider how to quantify risks and address questions concerning liability allocations, all of which must be factored into the insurance premiums charged.

For example, should an autonomous machine suffer a software failure, need replacement, or its third party owner become insolvent, it may cause a domino effect of project delays for which someone must be liable for any increased costs.

The BLG team also suggests the construction industry will require flexibility when it comes to the nature of autonomous vehicles ownership itself.

“Autonomous software guiding and controlling autonomous equipment is far more valuable than any individual piece of equipment it may control. As a result, akin to the movie rental industry, economic forces and the need to protect intellectual property may require industry players to accept something less than full ownership of a piece of equipment. Much like a piece of computer software, an end user may own a physical copy but uses the actual software as a licensee, not a property owner.”

Due to the potential imbalance of power between licensor and licensee, BLG suggests contracts between the licensor and licensee outline responsibilities and liabilities very clearly.

There are also what BLG terms “novel perils” such as autonomous system malfunctions and cyber security issues. Operators, owners and insurers will be required to share massive amounts of data, not only to monitor current usage, but to further develop A.I. innovation while developing and pricing the protection coverage that will be required in the future. Therefore, operational A.I. programming and data ownership must be contractually established and safeguarded.

Bedeau writes, “autonomous machinery will be disruptive to traditional approaches to construction contract negotiation, risk-sharing and liability.”

The high capital costs may also be disruptive to the construction business model itself.

“Autonomous vehicles and equipment may create a competitive advantage or disadvantage for large or small contractors with regard to their capacity to make large capital investments. Adopting new technologies represents a risk and can be more difficult for smaller businesses, which may have less financial stability.”

Yet, despite the costs and unique contractual complexities resulting from increased A.I. usage on worksites, the march of progress will proceed, says the BLG team.

“The rapid development of autonomous machinery, coupled with their successful use on construction sites today, means widespread use of autonomous equipment on construction sites is inevitable.”

John Bleasby is a Coldwater, Ont.-based freelance writer. Send comments and Legal Notes column ideas to editor@dailycommercialnews.com.

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