Senate examines Y2K liability bill

The Senate is considering a controversial bill that looks to limit lawsuit costs arising from the Year 2000 technology problem.

3 min read
The Senate is today considering a controversial bill that looks to limit lawsuit costs arising from the Year 2000 technology problem.

The bill could be approved by the Senate as soon as today, Senate staffers said.

Back to Year 2000 Index Page Crafted by Sen. John McCain (R-Arizona), who is chairman of the Committee on Commerce, Science, and Transportation, and Sen. Ron Wyden (D-Oregon), also a member of the Commerce committee, the bill would curb so-called millennium bug suits against computer, software, and other technology companies.

As demanded by Wyden and other Democrats, the new bill would give small business owners and consumers more leeway in court if the glitch strikes their computers next January 1.

Late yesterday, the bill, S.96 - the "Y2K Act," made it to the Senate floor for the first time and, as expected, sparked heated debate before it was moved for further discussion later today.

Sen. Fritz Hollings (D-South Carolina) outlined one of the major gripes by many in his party that the bill engages in tort reform rather than limiting Y2K costs.

"No one can deny there cannot be a glitch on January 1 of the year 2000. However, there is not really a problem that would cause us to try to change tort law. That is what is in the offing here," said Hollings.

Hollings argued that consumers and business owners would rather find a fix to their computers than go to court and be engaged for years awaiting a judge or jury's decision.

"So I thought, fine, let's get together on what could be called a glitch. Nobody wants to go to court. Give them some time to fix the glitch, and then move on in the business world," said Hollings. "However, we have some friends down at the National Chamber of Commerce who are really bent on actually trying to pass product liability and do away with trial by jury and all the other State tort systems."

McCain said his bill is not tort reform but a measured way to prevent frivolous lawsuits regarding the Year 2000 computer problem, and he offered an amendment to the bill that Democrats on his committee had requested.

The amendment provides for "proportional liability in most cases, with exceptions for fraudulent or intentional conduct, or where the plaintiff has limited assets," said McCain. It protects governmental entities, including municipalities, schools, fire, water, and sanitation districts, from punitive damages.

The amendment eliminates limits on punitive damage for "egregious conduct," while providing some protection against runaway punitive damage awards. And it provides protection for those not directly involved in a Y2K failure.

"It is my hope that S.96 will be the catalyst for technology producers to work with technology users to ensure a seamless transition from the 1990s to the year 2000. The goal is to make January 1 a nonevent."

McCain added that the purposes of this legislation is to ensure that the nation solve the Y2K technology glitch rather than clog our courts with years of costly litigation. "The purpose is to ensure a continued, stable economy, which obviously is beneficial to everyone in our country."

Since its inception the "Y2K Act" has been backed by Republicans and criticized by the White House, and Senate Democrats.

Sen. Chris Dodd (D-Connecticut), a leading Democrat and vice chairman of the Senate Special Committee on the Year 2000 Technology Problem, is one of several legislators who still find fault with the bill.

"It's still something we can't sign off on," said one of Dodd's staffers last week. "It still has caps."

McCain asked for and received consent by the Senate to continue debate on the bill later today.