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Senators compromise on Y2K bill

A bipartisan agreement is reached by a group of key senators on a controversial bill before the Senate that looks to limit litigation costs brought on by the Year 2000 computer glitch.

A bipartisan agreement has been reached by a group of key senators on a controversial bill before the Senate that looks to limit litigation costs brought on by the Year 2000 computer glitch.

The agreement clears the way for the bill's approval, which could come tomorrow.

The deal reached by Sens. Chris Dodd (D-Connecticut), Back to Year 2000 Index Page Bob Bennett (R-Utah), John McCain (R-Arizona), Ron Wyden (D-Oregon), and Dianne Feinstein (D-California) would retain some, but not all, punitive damage caps for businesses, protect municipalities and governmental entities from punitive damages, and preserve state court standards, thus watering down some of the controversial points in the "Y2K Act" that have tied up the bill in political wrangling for weeks.

Compromise was reached after McCain, the key sponsor of the bill, agreed to eliminate caps on punitive damages for big business and dropped a provision that would have protected individual corporate officers and directors.

"I think we have an agreement that would be able to move this issue forward," McCain told Reuters.

With the deal reached late yesterday, there are still some procedural hurdles left to iron out, preventing a final Senate vote on the bill until tomorrow, Senate staffers said.

The deal came on the same day the White House criticized the bill and threatened a Clinton veto if it was approved by the Senate without some key changes. The White House has not commented on the revised bill.

As reported, the original McCain-Wyden bill would curb so-called millennium bug suits against computer, software, and other technology companies by encouraging "efficient" resolution of Y2K failures by allowing defendants the opportunity to correct the situation before facing a lawsuit, setting punitive damage caps for all suits, and 90-day grace periods for businesses to fix their Y2K problems.

The newest agreement, based on an amendment submitted by Dodd, retains punitive damage caps for small businesses; eliminates punitive damage caps for large businesses (more than 50 employees); eliminates personal liability caps for officers and directors of businesses and corporations; and preserves state evidentiary standards for claims such as fraud.

The bill will still require a 30-day notice, requiring a plaintiff to submit a 30-day notice to the defendant on the plaintiff's intention to sue with a description of the Y2K problem. If the defendant responds with a plan to remediate the problem, then an additional 60 days is allowed to resolve the problem. If the defendant does not agree to fix the problem, the plaintiff can sue on the 31st day.

The bill also will ensure that defendants don't pay more than the damages for which they are responsible. Exceptions include plaintiffs worth a modest net worth that aren't able to collect from one or more defendants and defendants that have intentionally injured plaintiffs.

The bill would not interfere with parties who have already agreed on Y2K terms and conditions. It also supports existing law that plaintiffs have to limit damages and can't collect damages that could have been avoided.

The measure also would encourage alternative dispute resolution such as mediation. Personal injury and wrongful death claims would not be covered under the bill.

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.

Reuters contributed to this report.