More than 30 states seek armor against Y2K litigation
By Karen Pierog
CHICAGO, March 15 (Reuters) - Lawmakers in more than 30 states are mobilizing against an expected onslaught of litigation related to Year 2000 computer problems, despite warnings that such moves might actually make the computer bug worse.
The lawmakers are considering a blizzard of legislation, including bills that would give state and local governments immunity from litigation.
And since businesses like banks, utilities, and software vendors are also likely targets of lawsuits, should their computer systems wreak havoc in January, some of the proposals would curb class-action lawsuits or limit damages for them as well.
Other legislation would prohibit enforcement action against citizens unable to pay their bills because of a Y2K failure.
''Clearly there are going to be a lot of lawsuits,'' said Wisconsin State Sen. Bob Jauch, D-Poplar, who chairs a Year 2000 subcommittee for the National Conference of State Legislatures.
Despite the mountain of bills, only seven states -- California, Florida, Georgia, Hawaii, Nevada, South Dakota, and Virginia -- have actually enacted laws, most of which provide for governmental immunity.
Opposition to the effort is focused mainly among business organizations and trial lawyers, who argue that the lawsuit immunity
efforts could discourage attempts to fix the problem before the January 1, 2000, deadline. That's when some older computers, programmed to record dates using only the last two digits of a year, could fail to recognize the date. If left uncorrected, the computer systems could cause errors or crash entire systems.
But the U.S. Chamber of Commerce is ''adamantly opposed'' to giving state and local governments immunity from Y2K-related lawsuits, Jim Wootton, executive director of the organization's Institute for Legal Reform, said.
''The only people plaintiffs will turn to are businesses,'' he said. ''It's not fair to put the whole burden on business.''
The Chamber this month urged its state organizations to support a model Y2K bill in their legislatures that would encourage remediation of the computer bug, not litigation, and establish a uniform liability standard for the nation. The model bill, which would limit liability and damages for businesses in Y2K lawsuits, was based on legislation introduced in the U.S. Congress resulting from a business consensus.
''What business wants is to make sure there is no litigation explosion because of Y2K,'' Wootton said, adding that a fair, fast and predictable mechanism for resolving disputes arising from Y2K glitches was needed.
The Association of Trial Lawyers of America, which opposes the federal bill, is also opposed to any form of immunity or reduced liability for governments and businesses. The group contends that such moves provide a disincentive to correct Y2K defects.
''This legislation on the state or federal level is not going to fix a single computer chip,'' the group's spokesman said. ''It it not going to reduce any litigation.''
The fact that few states have passed legislation so far underscores a belief that existing laws dealing with immunity and liability are sufficient and that new laws could create more exposure, according to Wisconsin's Jauch. New laws may also protect entities that were lax in dealing with their computer problems, he warned.
''It is clear in every state I deal with that everyone is concerned with small institutions, private or public, because they lack the
resources, expertise and maybe the desire to do anything,'' Jauch said.
Fears over wide-spread computer problems may ease as 1999 winds down and more systems are fixed and tested, diminishing the need for states to pass new laws.
But if those fears remain, Jauch said, states may rush to enact the slew of immunity bills now under consideration. |
