Congress OKs Y2K liability bill

By Patrick Thibodeau, Computer World |  Business

WASHINGTON -- Congress has approved legislation limiting a company's Y2K liability, but the bill, which is expected to be signed by the White House next week, has triggered mixed reaction about its fairness and need.

The final version of the much debated bill, the end result of several different proposals, sets a 90-day cooling-off period before litigation can commence. It also limits, with some exceptions, a company's damages to its actual responsibility -- preventing plaintiffs from seeking damages from the company with the most money. In addition, the bill makes it more difficult for plaintiffs to launch a class action lawsuit, among other things.

The bill won bipartisan support and was backed by a large coalition of trade association groups. But doubts remain.

Stephen J. Humes, an attorney at Southern Connecticut Gas Co. in Bridgeport, said the bill most benefits those companies that have ignored the problem, expecting federal legislation to bail them out.

"Is that fair to those [companies] that spent the money and invested the resources to be ahead of the curve?" Humes said. "That's not a competitive business approach to the problem."

In any event, companies aren't going to rely on the courts for Y2K remedies, information technology professionals said.

Chris Apgar, year 2000 project manager at Providence Health Plan in Beaverton, Ore., which has 670,000 members, worries about the bill's impact on smaller companies -- those without the vendor clout or resources his company has.

The bill gives some vendors "more breathing time to respond to problems, and this doesn't help the small business out there,'' Apgar said.

But proponents say the bill doesn't replace a company's contract with a vendor, nor does it prevent a company from taking legal action, said Marc Pearl, legal counsel for the Information Technology Association of America.

It does, however, require plaintiffs to do everything they can to mitigate damages and show that they developed a Y2K action plan that included contingencies.

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