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Bill would squash Y2K bug lawsuits; Goal is to limit liability caused by computer problems; General Assembly


Life as we know it may or may not end in 10 months and 20-some days if the dreaded Year 2000 "bug" disrupts the computers that keep track of our money, run our cars and operate all manner of other gadgets.

But Maryland businesses and governments are scrambling for legal cover in case the doomsday predictions come true as digital clocks strike 12: 00: 01 on Jan. 1, 2000.

Spurred by fears that the Year 2000 will spawn a monstrous snarl of lawsuits, lawmakers in Annapolis have introduced legislation aimed at limiting the liability of government and businesses for economic disruptions caused by the Year 2000 computer flaw.

"It's our responsibility to see we avoid catastrophic litigation that comes out of this turn-of-the-century thing," said House Speaker Casper R. Taylor Jr. He and 16 delegates have sponsored House Bill 8, the Year 2000 Commerce Protection Act.

The Maryland lawmakers' push to head off Year 2000 litigation mirrors legislation being weighed in several other states, including Virginia, and in Congress, where at least one bill would limit Year 2000 computer damage claims nationwide.

Others -- lawyers mainly -- are suggesting that the Maryland House bill is the catastrophe. Critics say the measure would distort the legal system to fix a problem that may not arise, and could cause other problems.

"This may well create more litigation than otherwise would have occurred if things had been just left the way they were," said Max Oppenheimer, an associate professor at the University of Maryland School of Law.

The Year 2000, or Y2K, problem is a programming glitch that could cause some computers and electronic equipment to quit or go haywire at the turn of the century. The glitch occurs because some computers may read "00" as 1900 instead of 2000.

A cottage industry of doomsayers has warned of economic and social chaos when the new year arrives, including plane crashes and power blackouts, because of a cascading series of computer system shutdowns. Some experts say such fears are overblown.

Business is taking no chances.

Y2K liability protection is a top priority of the Maryland Chamber of Commerce, which drafted the bill that Taylor and others have sponsored.

Chamber President Champe C. McCulloch said business executives have been spooked by the flurry of lawsuits filed over computer date-reading problems, and by lawyers seeking clients who may be harmed.

"The business community has enough difficulty dealing with the issue itself without it turning into a happy hunting ground for plaintiffs' attorneys," McCulloch said.

Internet surfers can find no shortage of Web sites posted by lawyers offering to represent people or businesses in suing -- or defending against suits -- over Y2K breakdowns.

"This is the asbestos litigation of the next millennium," said David Bliden, executive director of the Maryland Association of Counties.

Lloyd's of London has estimated that Y2K-related damage claims could reach $1 trillion in the United States, according to Bliden.

Spurred by such dire predictions, many businesses and government agencies have taken steps to repair date-related glitches in their systems.

Maryland state agencies plan to spend about $100 million before year's end. So far, 39 percent of the state government's "critical" information systems have been fixed and tested for their ability to handle the year changeover. While most of the high-priority systems are in some stage of repair, the state has yet to begin work on 8 percent of them.

Considering how much public agencies are spending to try to fix the problems, officials say, they need protection from litigation if something goes wrong.

"I don't think people want to have their property taxes raised to accommodate a trillion dollars' worth of lawsuits," Bliden said.

'Out of your control'

The House of Delegates' bill would enable public agencies and businesses to fend off lawsuits if they inventory their products and services, prepare a plan to make them Y2K-ready and contact critical suppliers to find if they are similarly ready.

"It seems to me that if you've done everything you can possibly do to become Year 2000 compliant -- to avoid any catastrophes or glitches -- you shouldn't be subject to litigation because of something out of your control," said Dyan Brasington, president of the High Technology Council of Maryland.

Some lawyers worry that the bill goes too far, preventing businesses and consumers from seeking compensation if they are harmed by buying products or services that were not safeguarded from the glitch.

"If you're a business and you bought a computer from Compaq or Gateway in the last year, and it turns out it's not Y2K compliant, I think there's a problem there," said Michael Gisriel, lobbyist for the Maryland Trial Lawyers Association.

The Maryland State Bar Association also opposes the bill, saying it provides "virtual immunity" from lawsuits for government and business. The measure bars legal discovery of "readiness review" documents prepared by a company to see if its computers can handle the Year 2000 date change.

'No need for this'

Oppenheimer, the law professor, warned that the bill may prompt a blitz of lawsuits in anticipation of its taking effect. He questioned whether the Y2K problem is that different from other product liability disputes.

"I can see the need for governmental immunity," said Steven J. Fox, a lawyer with Ober, Kaler, Grimes and Shriver in Baltimore, which represents a variety of businesses dealing with Y2K concerns. "But there's no need for this. Companies have had years to prepare, and if they choose not to, the legislature shouldn't be protecting them."

House Speaker Taylor said he was not surprised by the lawyers' objections. He said he wants to keep the legal community from getting rich from the Y2K problems.

"By the time the lawyers get done litigating Y2K cases, they will surpass the professional athletes in this country," Taylor said.

'One shot at it'

Local officials, fearful that their desire for Y2K protection may fall victim to political wrangling over shielding business, support a Senate bill limited to government liability. Introduced last week, Senate Bill 232 would grant state and local governments immunity from damage claims if they have taken steps to find and fix potential computer problems.

The lawyers groups have offered to work with business and government interests in rewriting the legislation. They agree that the standard approach of holding controversial legislation for summer study will not suit this problem.

"We only have one shot at it," Taylor said.

Pub Date: 2/07/99

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