Digital transformation podcast - Series 1, Episode 2: Drones | Can regulators ever catch up with drone technology?

In this episode, Clyde & Co Partner Dino Wilkinson speaks to Drones specialists Maurice Thompson, Professor Julie-Anne Tarr and Patrick Slomski about the growing use of drones and the risks and opportunities surrounding the regulation of this technology in business today.

Can regulators ever catch up with drone technology?

Drones are at the forefront of digital transformation and in this podcast, Dino Wilkinson talks to three guests who have “between them literally written the book on drones and law,” with their recently-published joint work, Drone Law and Policy: Global Development, Risks, Regulation and Insurance.

• Maurice Thompson, a Melbourne-based Partner at Clyde & Co and founder and chair of Clyde & Co’s Global Drones Group;
• Professor Julie-Anne Tarr, a Senior Consultant at Clyde & Co, with extensive experience in emerging technology legislation; and
• Patrick Slomski, a London-based Partner at Clyde & Co, who works on both contentious and non-contentious matters in the aviation and aerospace group

The discussion begins with views on the state of play regarding drone technology in business, which according to Thompson has “exploded exponentially over the last couple of years,” and is advancing all the time. Use-cases are everywhere, and Tarr highlights some of the most game-changing examples, including pipeline inspections in the oil and gas sector and commercial deliveries, which range from dropping off your daily coffee to drones that can carry up to 200kg of goods. 

Moving on to the topic of regulation, Slomski says that a restrictive approach has been a “barrier to widespread use” up to now, but with efforts accelerating, “we’re at a tipping point,” with progress “likely to proceed much faster in the next couple of years.” However, regulating millions of drones is no easy task given their myriad capabilities ‒ spanning air, underwater, inside, and underground ‒ and the innumerable potential risks involved. As Tarr states: “the need for global consensus is critical”, with a range of regulators required to work together to develop a way forward.

Insurance is another key area for discussion and, according to Thompson, some insurers have been reluctant to enter the space due to the complex risk landscape and lack of data available to assess the risks to be underwritten. The solution again lies in developing the right regulation: “Regulators need to step in to give clarification,” says Slomski. Governments also have a role to play in making drone insurance mandatory, with Thompson arguing that this will “empower corporates to move forward legitimately while managing their risk.”

Focusing specifically on the data, cyber, and privacy risks, Tarr points out that drones are both collecting “information that we didn’t even know was out there” and expanding the potential for corporate espionage. All three experts agree that corporations are yet to seriously tackle the threat of drones spying on them from the air, while the counter-drone options currently on the table, such as radar, high-powered microwaves, and trained eagles, present numerous obvious issues.

Finally, our guests offer their advice to in-house lawyers who are starting to broach the introduction of drones across their operations. They all agree that due diligence is critical: from checking insurance policies to ensuring drone related suppliers and consultants have watertight risk assessments in place. As Tarr points out: “It’s like the early days of the internet when we didn’t know what we didn’t know,” and things are accelerating even more quickly. As a result, Slomski advises clients to take a step back and think strategically about how they want to use drone technology; put these foundations in place and then open a dialogue with regulators, lawyers, and industry bodies about what is possible. As he concludes: “If you understand what you want to do, you’re better able to be adaptable and flexible when new things come along.”

Listen to more episodes in the series