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House passes Y2K liability bill

The House joins the Senate in allowing companies to share information about solving Y2K, meaning it should soon become law.

Following the Senate's lead, the House of Representatives last night passed controversial legislation that will allow U.S. companies to share information for purposes of solving the Y2K bug, and President Clinton pledged to sign it into law.

The Year 2000 Information and Readiness Disclosure Act provides limited liability protections to encourage companies to share information about products, methods, and best practices, while protecting consumers from misleading statements. But the bill does not provide liability protections for failures that may arise from Year 2000 problems, such as selling products that do not work.

Several influential groups, including the U.S. Chamber of Commerce, Back to Year 2000 Index Pagethe National Association of Manufacturers, and the National Governors' Association have endorsed the bill. But the Association of Trial Lawyers of America will "actively oppose" it, worrying that consumer protections aren't sufficient, and that it is too business friendly.

However, the Information Technology Association of America strongly supports the bill. "Information sharing is critical to expediting the pursuit of Year 2000 remediation programs, allowing firms to share information without fear of lawsuits for either the factually accurate but nevertheless damaging statements or the inadvertently erroneous statements they make concerning this unprecedented situation," the group said in a statement.

Cosponsor Sen. Bob Bennett (R-Utah) lauded fast passage of the bill but said more such efforts are needed. "Today's action is an important first step, but that's all it is. We will aggressively address other vital Y2K demands when the Congress reconvenes next year," he said.

Corporate executives have expressed fear that they will be engulfed by multimillion-dollar class-action lawsuits spawned by financial losses from malfunctioning computers, broken contracts, and product liability issues caused by computers' incompatibility with dates in the new millennium.

The legislation, titled the Year 2000 Information and Readiness Disclosure Act, would not stop lawsuits based on Year 2000 computer failures, but instead would make it easier for businesses to have conversations with their suppliers and service companies, according to the legislation.

The president is expected to sign the bill.