Congress wants to avoid Y2K lawsuits |

Congress wants to avoid Y2K lawsuits

Rick Chandler

The Millennium Bug may not be the unmitigated disaster that many people are predicting – at least not the way you think.

Most experts agree that the vast majority of date-sensitive computer programs will work fine when the calendar rolls over to the year 2000.

But in the courtroom, it could be a different story. Many are predicting a spate of Y2K-related lawsuits as 2000 approaches, which is why Congress is debating SB91 – a U.S. Senate bill that would protect companies against lawsuits stemming from year 2000 computer problems.

“We are likely on the verge of an explosion of Y2K coverage actions, at least comparable to the environmental and asbestos claims of the 1980s,” said Lawrence Eisenstein, a New York attorney who spoke at the ACORD Technology Conference ’99 in Orlando, Florida last week.

In fact, the fun is already beginning. There have already been 83 significant Y2K-related lawsuits since January 1998. And regardless of how these cases are resolved, there is still the question as to whether insurers should be responsible for Y2K claims under liability policies.

Many insurance companies offer Y2K insurance, but it is expensive and requires policyholders to undergo audits.

Early examples from the Y2K law file:

n Intuit, Inc., maker of the financial software Quicken, is being sued by a group of consumers unhappy with the product’s Y2K readiness. Apparently, Quicken’s Version Five and Six are not able to handle online banking transactions after December 31, 1999, according to ZDNet. The case is pending in Santa Clara, Calif.

* Symantec Corp. is facing a second lawsuit alleging that it is forcing computer users to pay for upgrades to its Norton AntiVirus software, instead of fixing the problem for free. The complaint, filed in March 1998, is still pending.

But cases such as these are, as they say, only the tip of the iceberg.

This is why Congress is attempting its preemptive strike – a little late, according to many – which would place a 90-day waiting period on Y2K-related lawsuits, establish proportionate liability in class action suits, and send most Y2K suits to federal court.

Proponents of SB91 say that Y2K lawsuits could clog the courts and result in more than $1 trillion in legal costs. But opponents claim that the bill could harm small businesses.

“Without some kind of restraint, I think there will be a considerable amount of litigation,” said South Lake Tahoe attorney Dennis Crabb. “This kind of litigation is something that can take on a life of its own, such as what is happening with smoking and asbestos recently. I think that considering the consequences, restraint is a very good thing.”

Crabb, who represents many small business owners, said that it only takes one lawsuit to cripple a small company.

“The large corporations are going to be fine, they can weather (Y2K lawsuits),” he said. “But with some of the small business people I represent, a rash of litigation would cause them to fold up.”

But are attorneys really gearing up for Y2K battle?

“Let’s put it this way,” Crabb said. “The last two bar journals I read had significant articles on building Y2K practices. And I’d be very surprised if any conferences between now and the end of the year did not include several Y2K items.

“In America today, this is a legitimate concern.”

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