A Massachusetts court has approved a settlement in a Y2K
lawsuit--a first in the state--worth $50 million.
The class action lawsuit filed against RealWorld, a New Hampshire software
maker, alleged that the company failed to upgrade certain
accounting software products to make them Y2K-compliant.
Under the terms of the settlement, approved by a judge April 16,
RealWorld agreed to provide certain free upgrades and other discounts
worth an estimated $915 to each of its 40,000 business customers whose
software might not function through the date change to January 1, 2000.
Users have until September of this year to claim the benefit, according
to Gary Greenberg, an attorney at Goldstein &
Manello in Boston, the plaintiff's attorney in the local suit.
Only a few such suits have been resolved in the United States to date, out of the
more than 60 cases tracked by a national litigation service.
"There's likely to be more litigation concerning responsibility for
Y2K-type issues," said Greenberg.
The number of complaints is expected to sky rocket as lawyers and
companies wrestle with the question of just who should pay for the
billions of dollars that it will eventually cost to stave off widespread
system problems at the start of next year. Some analysts estimate the
cost of Y2K litigation could reach $1 trillion.
While the court's order approving the settlement only concerns
Massachusetts businesses, as part of the agreement, RealWorld agreed to
offer identical benefits to as many as 40,000 of RealWorld customers
nationwide, according to Greenberg's law firm.
As part of the settlement, through September 30, 1999, RealWorld will
provide one free upgrade module of the user's choice of its version 8.03
or RealWorld's then current software. It also gives users the right to
purchase additional upgrade modules of RealWorld's current software at a
discount of 15 percent off the last list price and a free software
subscription maintenance through December 31, 1999 for the software
acquired pursuant to the settlement.
The lawsuit comes as debate rages on Capitol Hill on how far to limit
litigation related to the Year 2000 computer problem.
The debate, taking place in state legislatures as well as Congress, is over
how to control rising Y2K litigation costs. But consumer advocates and
some members of Congress fear this desire to control litigation may
strip consumers of their legal rights.
The Y2K computer glitch, often referred to as the millennium bug, arises
because many older computers record dates using only the last two digits
of the year. If left uncorrected, such systems could treat the year 2000
as the year 1900, generating errors or system crashes.