Rande
Maybe we should invest in some
lawyers stocks if their are any.....
2k legal battles to heat up new year
By Peter Coffee, PC Week Online
December 30, 1998 11:40 AM PT
Year 2000 action is
shifting from solving
the problem to
determining who will
pay.
Federal courts got into
the act last week:
Cincinnati Insurance
sought a partial shield
from growing Y2K
costs, and a software developer started
class-action moves against Microsoft.
In the first case, Cincinnati Insurance sold a
business liability policy to Source Data Systems,
and Source Data sold hospital management
software to the Pineville Community Hospital
Association.
In 1996, five months after the software's
installation, the hospital group determined that its
newly acquired software would not perform
correctly post-Y2K. The Pineville parties seek $1.25
million to cover the cost of replacing the system,
and Source Data seeks coverage of the costs
under Cincinnati Insurance's policy.
Of course, everyone denies liability, but there are
plenty of deep pockets. In particular, Source Data is
now owned by Keane, whose annual revenues are
quickly approaching $1 billion. Keane gets about a
quarter of its revenue from Y2K work, according to
Gartner Group estimates earlier this year.
Now, watch closely: Source Data says that its
contract with Pineville did not guarantee post-Y2K
operation. Cincinnati Insurance asserts that its
policy does not cover the costs of curing defects
before they actually cause harm.
Are we having fun yet? Let's look at the precedents
that are waiting to be set.
In custom software development, is operation
beyond Y2K an implicit requirement unless
specifically disclaimed?
In sales of mass-produced software, is post-Y2K
usability an element of implied warranties (which
may vary from state to state)?
If implied warranties are disclaimed by shrink-wrap
licenses, are these effective? Or are they void due
to either unconscionability or lack of fair bargaining
power?
Is it in the public interest to wait until someone gets
killed, then count the bodies and send the
insurance checks, instead of preventing the harm?
If not, should insurance companies assist in
preventing foreseeable harm?
Is there anyone reading this column who doesn't
have a large amount of money riding on the
answers?
At least as broad are the implications of Ruth
Kaczmarek's lawsuit against Microsoft. She
asserts that Microsoft sold versions of FoxPro and
Visual FoxPro with knowledge of the products'
date-handling defects. No, really? And exactly
where is the boundary between "defect" and "bad
design"?
Kaczmarek demands compensation and punitive
damages. Can you imagine the upper limit on a
jury's punitive-damage award? Neither can I,
especially if the suit does become a class-action
case.
I wonder, who will the class be? All FoxPro
developers? All buyers of FoxPro-based
applications? All users of FoxPro-based
applications? And their children and pets? This isn't
a can of worms--it's a barrel of rattlesnakes.
What we're seeing here is the same thing that my
civil engineering department head at MIT, Frank
Perkins, called the abdication of the engineers.
When a problem doesn't get handled by the people
who can actually solve it, it slouches toward the
courthouse or the statehouse to be reborn. The
result is always a combination of messy lawsuits
and misguided laws.
Suppose, to be (I think) conservative, that the
number of court cases doubles monthly from now
through the end of 1999. We'll have 4,000 cases in
progress before the odometer even flips to 00.
When we return from the holidays, the Y2K
marathon will start its last mile. Enjoy the season;
next year's will be far more naughty than nice.
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