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Bill would keep Y2K out of courts

The Senate is debating a new bill that would offer companies making good-faith efforts to solve the Y2K glitch protection from lawsuits.

The Senate is debating a new bill that would offer companies making good-faith efforts to solve the Y2K glitch protection from lawsuits.

The Senate Committee on Commerce, Science, and Transportation, chaired by Senator John McCain (R-Arizona), heard from critics and supporters of the bill, which would also encourage "efficient" resolution of Y2K failure and correcting the situationBack to Year 2000 Index Page before it reaches the courts.

McCain, who submitted the bill, said the purpose of this legislation is "to ensure that we look to solving the technology glitch rather than clog our courts with years of costly litigation."

"I have worked with a number of other colleagues who are similarly concerned and who are, or will become, cosponsors...," he said in his opening statement. "Opportunistic lawyers are already filing suits to reap the benefits of this issue, and the calendar still reads February, 1999. These lawsuits are sheer craziness and represent ambulance chasing at its worst. They are clear and convincing evidence that we will face a rash of Y2K lawsuits in the coming year."

McCain cited recent estimates of Y2K litigation nearing $1 trillion and said such costs would be a "major impediment" to the stability of the nation's economy.

The issue of providing Y2K litigation protection for companies has become one of the more heated controversies of the technology problem, cutting across party lines and law firms alike.

Prefacing the Congressional passage and presidential signing of the Year 2000 Information and Readiness Disclosure Act, which provides limited liability protections to encourage companies to share information about products, methods, and best practices, legal experts debated whether it protected consumer rights. Some members of Congress argued it didn't provide enough litigation protection.

As with the Disclosure Act earlier, the Association of Trial Lawyers of America (ATLA) have said publicly it will "actively oppose" McCain's bill because they believe it provides companies too much protection.

At yesterday's hearing critics of the bill said it would help business leaders who procrastinated against the inevitable arrival of January 1, 2000; who acted irresponsibly by failing and refusing to address the Y2K problems of their companies; and who failed to exercise due care and are now asking legislators to provide litigation protections.

"It seems appropriate to inquire how a grant of immunity to procrastinators and irresponsible business leaders who seek to avoid accountability for their own bad business judgment would solve the Y2K problem," Howard Nations, attorney of Law Offices of Howard Nations, said in his testimony before the committee.

Nations said an essential point of Y2K litigation is that it will primarily be business suing business. "Effectively, it will be businesses which acted responsibly suing businesses which acted irresponsibly."

A major problem with the McCain bill, Nations said, is that it not only grants immunity to the irresponsible but also abolishes the rights of the responsible corporate businesses leaders who acted within the law, who exercised reasonable judgment, and who met their duty of due care to their corporations and their customers.

But McCain and his supporters see otherwise.

"The approach we are taking with this bill is simply to encourage corrective actions--both proactively before January 1, 2000, and as the problems become apparent after the New Year. It is my belief our nations will be better off if people work together on solving the Y2K problem rather than spend their time and money in court," McCain said.

The Year 2000 problem, also known as the millennium bug, stems from an old programming shortcut that used only the last two digits of the year. Many computers now must be modified or they may mistake the year 2000 for the year 1900 or may not be able to function at all, causing widespread disruptions in services in the transportation, financial, utility, and public safety sectors, observers warn.

McCain put some critic's concerns at ease by saying that the bill is still a "work-in-progress" and that he is looking forward to work with his colleagues to complete drafting efforts soon, hopefully before October.