The introduction of Connected and Automated Vehicles (CAVs) of SAE level 3, 4 and 5 raises high expectations of reduction of traffic congestion, road crashes and vehicle emissions. The automated era might also have potential shortcomings, especially during the transitional phase, where conventional and automated vehicles of different levels of automation will share the road. The interaction of CAVs, conventional vehicles and vulnerable road users (VRUs) will introduce new challenges for road safety. In that context, the objective of this paper is to provide a comprehensive review of current literature in order to identify critical knowledge gaps especially in the development of effective legal frameworks and the implications of liability distribution on CAVs adoption and operation. By addressing these issues, the paper aims to guide interested stakeholders such as, policymakers, researchers and industry leaders in fostering a safer, more efficient, and especially legally sound transition to automation.