The settlement will cover all purchasers of the company's Medical Manager software versions 7 and 8, as well as any users who bought an upgrade for the software to version 9, on or before today. The settlement is still subject to approval by the Federal District Court of New Jersey.
As reported earlier, Medical Manager in August was hit by a class-action suit alleging the company violated the New Jersey Unfair Trade Practices Act, when it marketed computer software without disclosing that the software was not able to process dates after 1999.
The software is a management system for physicians, covering patient care, clinical, financial, and management applications.
The complaint alleges that Medical Manager used "false and misleading representations and omissions of material facts regarding the defective nature of prior versions of software until as late as November 1997."
In the first-ever suit filed over Y2K issues, a Detroit-area retailer and the maker of the retailer's computerized cash register system settled their dispute over alleged flaws in the register system--including Year 2000 recognition problems on credit cards-for $260,000.
A California judge dismissed a similar suit against Intuit in August, but that lawsuit has now been revived. Three New York suits, which have since been combined, question whether some of the online banking functions in certain versions of Intuit's Quicken personal finance software were free of Y2K problems.
Intuit argues that no customers have been harmed, as the software will continue to work until the end of next year, when the company promises to have free fixes available.
Attorneys for one of the plaintiffs in the Medical Manager case said their suit was substantially different then the one filed against Intuit.
"This case was different because Medical Manager was charging customers to upgrade to another version of the software," said Jonathan Shub. "They looked at it as a marketing possibility."
Under the terms of the settlement, the company will provide Version 8.12, an upgrade version of its 8.11 software, containing a Y2K patch.
In addition, the settlement also provides that users of Versions 7 or 8, who had purchased a version 9 upgrade on or before December 16, 1998, will have the option to obtain one of four add-on modules from the company without a license fee, or to elect to share in a cash settlement fund.