The government is to review the law before the arrival of self-driving cars on UK roads, considering issues such as whether this type of transport requires new criminal offences.

The development of autonomous vehicles is at the heart of the government’s industrial strategy and the three-year law review is considered necessary if it is to stick to the timetable announced in November last year when the chancellor, Philip Hammond, promised driverless cars on the road by 2021.

The Treasury’s post-Brexit economic survival strategy is to invest heavily in technological innovation to get ahead of more conservative rivals elsewhere in Europe.

This latest announcement makes it clear that the government anticipates the UK pioneering the use of autonomous vehicles on Britain’s highways in the near future. That throws up huge challenges to the existing system of law which starts from the presumption of human responsibility.

The three-year review, to be conducted by the Law Commission of England and Wales, and the Scottish Law Commission, will look at how traditional laws need to be adjusted to take account of issues including self-driving vehicles not having a human at the wheel or even a steering wheel.

The roads minister, Jesse Norman, said it was a milestone. “Driving technology is advancing at an unprecedented rate, [and] it is important that our laws and regulations keep pace so that the UK can remain one of the world leaders in this field.”

The issues to be examined by the review include the allocation of civil and criminal responsibility by law where there is shared control between humans and computers; the role of automated vehicles in public transport, car sharing and on-demand passenger services; any need for new criminal offences; the impact on other road users and how they can be protected from risk; and determining who the responsible person is in a self-driving vehicle.

The government announced funding of more than £22m for 22 research and development projects relating to the development of driverless vehicle technology last month. The funds are aimed at innovative uses of the technology, on and off road. Altogether the government has invested £120m so far of more than £1bn pledged, in a range of projects, including involving the use of autonomous vehicles in difficult and hostile environments.

There have been some serious incidents in trials in the US where driverless vehicles have failed to “see” obstacles. The first recorded death involving a driverless vehicle was in July 2016 when a car under autonomous control failed to brake as a tractor and trailer crossed its path.