Belgian liability lawyer here.
To be awarded damages you carry the burden of proof regarding three things:
1) that a certain party acted in a careless or erroneous manner;
2) that you suffered damage;
3) that aformentioned damage is caused by aformentioned error/carelessness.
In the common law system of the U.S. the burden of proof will of course be worded differently, but the gist will be the same.
The Latin phrase "Actori incumbit probatio" is used: "He who claims, must provide proof".
So the family of the Apple engineer must convince the Court of the following:
1) That Tesla acted carelessly by releasing AP in beta / That AP did not function as promised.
2) That they suffered damage, this is a given.
3) That the crash is directly caused by Tesla's carelessness and/or AP's errors.
Both number 1 and 3 are in my opinion not so easy.
First of all: you can easily prove that AP did steer the car towards the barrier and crashed into it. The logs probably show this and the many videos online show that the current AP 2.0 does this at that location.
However, the Court will have to question if said behaviour of AP equals AP not working as promised. Tesla has never claimed the current rollout of AP can be trusted as a hands-off system. It is beta after all.
You could possibly convince the Court that - knowing the above - releasing the current version of AP 2.0 is careless, 'cause it might endanger users. You could argue about this (Tesla gives ample warning, but I could sell a dangerous object and warn the consumer, this still might get me in trouble legally), and regarding this point Tesla might lose. We will have to wait and see.
Concerning the causality, this is were it gets really interesting (for legal nerds).
Let's assume the Court rules Tesla's releasing AP as careless. And it rules the current AP to malfunction.
Then this has to be the direct cause of the crash. A legal chain of causality can however be broken by another (stronger) factor.
An example from a real Belgian Court case: a driver makes an error and hits another car, injuring the other driver lightly. The paramedics are called to transport the injured person to the hospital. On the road to the hospital, the paramedics crash, killing the patient. The family of the killed person sued a whole bunch of people, including the driver that hit him in the first place. The reasoning would be that "had the victim not been hit by the first driver, he would never have been in that ambulance, thus not being killed".
Technically this train of thought is valid, but the chain of events is 'broken' by the paramedics van crashing - an event not caused by the first driver.
Applying this to the Model X crash you could easily hold Tesla accountable for releasing faulty software, but in my opinion you can argue that the actions of the Apple engineer (= not touching the steering wheel for at least 5 seconds before impact, whilst being warned multiple times by the car) are careless in itself, breaking the chain of causality from Tesla's faults to the damages suffered by the family.
TL;DR: There are arguments to be made on both sides, but I think Tesla should be safe in Court.
Great post, as a Scottish (non-liability) lawyer I agree with you, as far as countries where judges apply the law according to strict legal tests is concerned, like Belgium and Scotland.
What I am not so sure of is that the US court (possibly State court?) that hears the case will have the matter decided by a judge. In the US, there is likely to be a jury (as I understand) and juries have a degree of latitude to "do justice as they see it". My concern is that, even with a direction to the jury about the applicable legal tests, the jury might rule in favour of the pursuer of the action at least partly out of sympathy with the family or a desire to punish Tesla for releasing beta safety tech.
Is there a US lawyer out there (California ideally) who can speak about the role of the jury in these cases in determining liability. I would be most interested.
