Senate Committee Approves Bill That Would Limit Y2K Lawsuits
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Y2K and insurance: What's you liability for
The industry-backed measure, endorsed by the Commerce Committee on a party-line 11-9 vote, would limit damages from economic losses, allow a "good faith" defense for companies trying to make the needed repairs and establish a 90-day waiting period for filing suits so companies can make those repairs.
The chief sponsors, committee chairman Sen. John McCain (R-Ariz.) and Sen. Slade Gorton, (R-Wash.) would ensure that companies can concentrate on fixing computers rather than fending
ff lawsuits. Being "distracted by the potential for litigation in an almost unlimited sense," Gorton said, "is not socially desirable."
But Sen. Ernest Hollings of South Carolina, the ranking Democrat on the panel, said the market is already adjusting to the problem, with companies cutting suppliers that aren't addressing the Y2K issue.
Giving laggards a three-month grace period, Hollings said, was "monkeyshines replacing fundamental contract law."
The administration, in hearings earlier this week on a similar bill introduced by Senate Judiciary Committee Chairman Orrin Hatch (R-Utah) and Sen. Dianne Feinstein (D-Calif.) also expressed concern that limiting lawsuits could be a disincentive for companies to prepare for Y2K problems and a restriction on the rights of victims to sue for redress.
McCain said he was willing to amend his bill to meet some Democratic objections. "I don't think our goal is to just have this go to the floor and have it killed," he said.
Sen. Christopher Dodd (D-Conn.) one of the Senate's leading experts on the Y2K problem, said Tuesday that keeping lawsuits from getting out of control was a critical issue.
"We've got a chance of passing some limited liability legislation if it's focused on this issue and is not used as an opportunity to drive a fleet of Mack trucks through the tort system
f this country," Dodd said.
Dodd and Sen. Bob Bennett (R-Utah) on Tuesday issued a comprehensive report concluding that most Americans will not experience major disruptions on Jan. 1, 2000, when computers that use only two digits to delineate the year might mistake 2000 for 1900. But the report also pointed to serious concerns in such fields as health care, foreign oil supplies and some government
ervices.
The National Association of Manufacturers on Wednesday released a survey of its members showing that nearly 90 percent of large companies were confident that their vendors and suppliers will have tested and fixed Y2K systems by the end of the year.
Smaller companies were less sure, with 72 percent optimistic about their business partners, while 2 percent said those partners would not be ready and one-quarter saying they didn't know.
