Conflict over Y2K lawsuit limits

As a Senate-approved Y2K bill moves to the House for a vote, some in the legal sector are voicing concerns that it's too friendly to big business.

4 min read
As Senate-approved Y2K legislation moves to the House of Representatives for a vote, some in the legal community are voicing concerns that the bill is overly friendly to big business.

A source at the Association of Trial Lawyers of America (ATLA) reaffirmed that the lawyers group will "actively oppose" the bill, which was passed by the Senate yesterday, because they believe it provides too much protection for companies against potential lawsuits from consumers.

But the bill's defenders say it only limits liability against companies to free up information exchange between companies specific to the Year 2000 bug.

Back to Year 2000 Index Page According to language within the bill, the legislation will give corporations the "capability" to freely disseminate and exchange information relating to Year 2000 readiness, solutions test practices, and test results with the public and other entities without undue concern about litigation.

Corporate executives have expressed fear that they will be engulfed in 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.

See related story: 
Senate backs Y2K lawsuit limit But lawyers at the ATLA said that a lot of this protection lies within disclaimers provided on company Web sites already, adding that the legislation is a solution to a nonexistent problem.

Administration officials and industry groups hope the trial lawyers will not make their stand now and instead will wait until next year, when the Senate Judiciary Committee is expected to address broader liability questions.

"I urge the House to pass this critical legislation before the end of the legislative session," President Bill Clinton said in a statement.

The bill provides "limited liability protections to encourage greater information sharing about solutions, while also protecting consumers from misleading advertising or other statements when purchasing products for their own use...I look forward to signing it into law so that Y2K information sharing will enable the nation to prepare for this global challenge," he added.

Over at the House of representatives there already appears to be bipartisan support mounting for passage of the bill.

U.S. Representative Steve Horn (R-California), chairman of the House Subcommittee on Government Management, Information, and Technology, said he was "delighted" by the quick passage of the bill in the Senate. "If some of the experts over here don't have a problem with it, maybe we can get it passed and on to the President's desk soon," he said.

The Senate's approval of the bill came just 11 days after the Senate Judiciary Committee approved the legislation.

The measure came as a result of earlier testimony before a special congressional panel on the Year 2000 issue, which revealed that there was a reluctance to share information for fear of litigation.

The Y2K bug is rooted in the way dates are recorded and computed. For the past several decades, systems programmers have typically used two digits to represent the year in an effort to conserve memory. With this two-digit format, however, the year 2000 is indistinguishable from 1900, or 2001 from 1901.

Although the bill found widespread support in the Senate it did not come without some debate and some amending of the original measure.

During Senate debate, Senator Fred Thompson (R-Tennessee), chairman of the Committee on Government Affairs, said he had a number of concerns with the legislation in its original form. "First of all, this legislation preempts state and local liability law. Typically, neither I nor many of my colleagues would support such preemption of state authority. However, this problem warrants drastic action. In fact, state and local government associations have expressed their support for this bill."

The Tennessee senator went on to say the legislation reduces the standard of care required in providing accurate information as currently defined in state and local statutes. Due to the critical nature of this problem, "I can support this provision for cases where business are sharing information with the intent to identify a common solution and prevent a potentially catastrophic failure. However, in its original form this bill would have extended this protection to sellers of Year 2000 remediation products and services whose statements might be motivated? by financial interests."

As a result, Thompson worked with the Judiciary Committee to develop language with in the bill that will mitigate false and inaccurate year 2000 solicitations while promoting the open sharing of information needed to solve the Y2K problem.