Government report finds few Y2K-related lawsuits

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by Patrick Thibodeau

(IDG) -- One of the fears surrounding the year-2000 problem was its potential to result in litigation against companies. But in a report made public Monday, the U.S. General Accounting Office (GAO) said it identified fewer than 100 federal and state lawsuits that raised Y2K-related issues. The GAO added that just 18 of those suits invoked provisions of the liability-limiting bill passed in 1999 by Congress.

When that measure was being considered, some legal experts estimated a possible price tag of $1 trillion in legal costs and damages stemming from Y2K-related suits. Concerns about that kind of out-of-control litigation prompted Congress to adopt the controversial Y2K Act, which set a mandatory 90-day cooling-off period before any legal action could commence and restricted the use of class-action lawsuits, among other provisions.

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U.S. Sen. Patrick Leahy, who asked the GAO to study the issue, said the report "confirms that in the courts, the Y2K bill was mostly used by big companies to delay or sidetrack relief to consumers." Leahy called the findings "a lesson for the next time special interests ask Congress for special legal protections."

But Harris Miller, president of the Information Technology Association of America, a trade group in Arlington, Va., said the intent of the legislation was to prevent an onslaught of groundless litigation and the potential diversion of resources earmarked for repairing Y2K problems to fight legal battles.

"That's what the legislation was all about," Miller said. "It wasn't prohibiting anyone from going to court." As a result of the Y2K Act, he added, companies "didn't get sidetracked into a legal firestorm that would have benefitted only the lawyers."

In its analysis, which was dated Sept. 21, the GAO said most of the cases that were filed involved end users who had taken action against a hardware or software vendor to bear the cost of replacing or upgrading existing systems.

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U.S. General Accounting Office Y2K-litigation report
(Adobe Acrobat required to read this .pdf file)

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