Gov't Reaches Deal on Y2K Lawsuits
WASHINGTON, Jun 29, 1999 (AP Online via COMTEX) -- Putting aside
politics to confront what many fear could be an economic disaster,
Congress and the White House agreed Tuesday on legislation that would
put restraints on lawsuits arising from Year 2000 computer problems.
Both President Clinton and Vice President Al Gore were involved in the
sometimes-hectic negotiations to find a compromise and avoid a
presidential veto of a bill that was avidly sought by the high-tech
industry, an important financial backer of the White House.
''Nobody is naive about the politics,'' said Sen. Ron Wyden, D-Ore.,
who with Sen. Christopher Dodd, D-Conn., acted as liaison between
congressional Republicans and the White House. He said Gore was ''very
heavily involved in the substance'' of the talks.
Dodd said he talked to Clinton in Connecticut Monday and was again on
the phone with him about 1:30 a.m. Tuesday to discuss progress in the
negotiations. Clinton wanted a bill, he said, but insisted on consumer
protections.
The bill, strongly backed by the business community, would try to head
off predatory lawsuits resulting from Y2K computer breakdowns by giving
companies 90 days to fix computer systems before lawsuits can be filed
and encouraging out-of-court mediation.
It would also limit punitive damages for small businesses and make it
harder to file class-action lawsuits. In one of the last points to be
resolved, the two sides agreed to increase the monetary threshold for
class-action lawsuits from $1 million to $10 million before a case can
be moved to federal court.
The final compromise also added some consumer protection language to
provisions ensuring that in most cases a defendant is liable only for
that proportion of the damage he causes. The consumer-oriented language
ensures, for example, that consumers can get full benefit when in cases
of bad faith.
But Sen. Patrick Leahy, D-Vt., an opponent of the legislation, called
it ''a closed-door deal that will hurt consumers.''
With the deal, White House Chief of Staff John Podesta wrote in a
letter to Dodd, he was prepared to recommend that the president sign
the bill.
Supporters hope to get House and Senate approval of the compromise this
week, so they can send it to the president before Congress leaves for
its July 4 recess.
Sen. John McCain, R-Ariz., the chief Senate sponsor, said that late
Monday, with negotiations going poorly, he didn't think an agreement
was possible. ''But there was a realization on both sides that this is
so critical to American business.''
Negotiations began at the end of last week after lawmakers withdrew a
threat to send the president a bill he was sure to veto.
McCain said that a flood of lawsuits resulting from computers not
updated to read the year 2000 date could have a ''crippling effect on
our economy,'' with some estimates of $1 trillion in civil action.
Business groups and the high-tech industry pushed hard for the
House-passed bill that would have gone further in clamping down on
lawsuits and protecting both big and small companies from legal
harassment.
McCain's Senate bill, after extensive negotiations involving Dodd,
Wyden and other Senate Democrats, added more protections for consumers,
but the administration said it still didn't go far enough to protect
the legal rights of people to be compensated for wrongdoing.
Thomas J. Donohue, the U.S. Chamber of Commerce's president and CEO,
said that even with the concessions to the White House, the compromise
was a ''watershed achievement for business and the American economy.''
''Millions of small businesses, communities, hospitals and high-tech
entrepreneurs can now focus on fixing any remaining Y2K problems
instead of worrying about a group of trial lawyers looking to get rich
off Y2K.''
''Both Republicans and Democrats have put politics behind them to work
together on a solution to a potential global technology crisis,'' said
National Association of Manufacturers president Jerry Jasinowski.
Copyright 1999 Associated Press, All rights reserved.
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By JIM ABRAMS |
