> the automated driving problem:
>> If self-driving cars cut the roughly 40,000 annual US
traffic fatalities in half, the car makers might get not 20,000 thank-you notes, but 20,000 lawsuits.
> I'm convinced this is an area that deserves serious thought.
My fringe opinion on this topic is that automated cars actually simplify insurance and liability considerably.
The case history of product liability isn't common knowledge, nor are maybe the history and fundamentals of insurance, but both areas are instructive. Each area hints that when accidents are caused by automated or designed processes, rather than spontaneous human decisions, everything gets a lot less messy.
Here's a case very commonly taught to law students around the country:
http://online.ceb.com/calcases/C2/24C2d453.htm
In it, a coke bottle explodes, and Justice Traynor explains in concurrence essentially how the industrial revolution had shifted the optimal way to allocate the cost of freak accidents. There's a parallel shift for automation.
If you have manufacturers absorb all the risk and damage of accidents involving automated cars, then the incentives are in the right place. This doesn't work right now. You can't just automatically assign manufacturers all liability with manual cars, because after an accident you have to sort out how much of a dumbass or how drunk the driver was, with lengthy determinations as to percentages of fault for all involved.
Automation strips that whole problem out of the equation (so long as one party wasn't driving a manual car). It would drastically simplify liability and insurance in this area.
Corner cases where a highly uncommon set of conditions prompt accidents? We have those now. Look at all the cases about delayed recalls in the auto industry. They're almost all about whether they expected the set of conditions to occur or not. Companies already deal with these issues, because we're already using complex machines.