Just as with railways, Germany passed legislation very early to provide compensation to the victims of road accidents. Cars were invented in Germany and the first journey was in 1888. The problem of car accidents grew rapidly. In 1907, there were 36,022 cars on the road and 4,864 injuries or deaths − there was one injury or death on the German roads for every 14 cars. By 1910, the rate had doubled − there was one injury or death for every 7 cars.
Under the German Civil Code of 1900, a driver would be liable only if the injury was caused by his fault. But cars were expensive and the rich people who owned them often had a chauffeur. The owner would not be liable to pay for the acts of his chauffeur if he could show that he had taken care to select and supervise him. The Motor Vehicles Act 1909 made it easier for the victim to gain compensation.
Under the Motor Vehicles Act, the ‘keeper’ of a car was liable to pay compensation to another person if an injury resulted from ‘the operation of a motor vehicle’. The ‘keeper’ was the person using the car for his own purposes. He was liable for his own fault as well as for the fault of his driver. He was to be liable for the acts of the driver as well as for defects in the car, unless he could show that the injury resulted from an ‘inevitable accident’. The driver would also be liable, but only for his own fault. So third parties, such as passers-by or people in another car, were well protected and would not have to prove fault. But the law was not as generous to the driver and passengers of the car. They could not claim against the keeper of the car in which they were travelling, but only against the keeper or driver of another car which caused their injury. In those days, only rich people could afford cars, and they would have their own life insurance. They would not find the cost of insuring for the cost of accidents very expensive.
Although it kept liability for fault, Swedish law in 1906 had already made the keeper of the car liable for the acts of the driver, rather than leaving the victim to sue the driver who was at fault. The Dutch followed these examples in 1924, making the keeper liability towards pedestrians and cyclists, unless the injury was the result of some external cause.