Biggert Backs Y2K Readiness and Responsibility Act

Legislation Will Create Incentives for Businesses to
Address the Y2K Emergency

Washington, DC – Congresswoman Judy Biggert (R - IL 13) announced today that she is co-sponsoring the Y2K Readiness and Responsibility Act (H.R. 775). This legislation would create a legal framework by which Y2K-related disputes will be resolved.

"This bill encourages Y2K fixes, not Y2K lawsuits," said Biggert, "Time is our enemy in fixing the Y2K bug. Companies need to spend money and resources on the problem, not on lawyers."

The Y2K Readiness and Reliability Act addresses the prospect of a Y2K-related lawsuit explosion. Dozens of lawsuits that are Y2K-related already have been filed in the United States, and estimates of the total costs associated with Y2K litigation approach one trillion dollars. Comparatively, the total annual direct and indirect costs of all civil actions in the United States is estimated at $300 billion.

"We are not trying to give businesses and corporations a pass on the costs of not being prepared," Biggert said, "Those who have been irresponsible and negligent will be held liable. This legislation provides incentives to both potential plaintiffs and defendants to work together on solutions."

Some of the key provisions of the Y2K Readiness and Reliability Act are:

• Limitations on Damages – Punitive damages are limited to $250,000 or three times the actual damages, whichever is greater. For small businesses with fewer than 25 employees, the amount is $250,000 or three times the actual damages, whichever is less.

• Alternative Dispute Resolution – Parties are encouraged by this legislation to resolve their Y2K disputes through alternative dispute resolution mechanisms, such as mediation and non-binding arbitration.

• Attorneys fees are limited to $1,000 per hour

• Minimum Injury Requirement – A majority of the plaintiffs in a year 2000 class action must have suffered a real injury before a year 2000 class action can be brought.

• Pre-Trial Notice – Before filing a lawsuit, potential plaintiffs would have to give written notice identifying their Y2K concerns and provide potential defendants with an opportunity to fix the Y2K problem outside of the courtroom. The potential defendants then would have to respond within 30 days, detailing what actions they have taken or will take to fix the problem. If the potential defendants agree to fix the problem, they would have 60 days to fix the problem. If the plaintiffs are not satisfied after the 60 day period has expired, they still could file a lawsuit. (This provision is expected to accelerate the remediation process if failures occur, and thereby eliminate the need for many lawsuits.)

"Punitive damages are designed to deter defendants from continuing harmful practices in the future," said Biggert, who sponsored tort reform in the Illinois General Assembly, "But the Y2K problem is a special one-time event where the deterrent effect of punitive damages is not applicable. This legislation addresses that fact."

Biggert is the Vice-Chair of the Government Reform Subcommittee on Government Management, Information and Technology, which oversees the federal government’s Year 2000 compliance efforts. Last week the Subcommittee released a progress report for government agencies and departments. While 18 of the agencies received a grade of B- or higher, three received grades in the C range, and three (the Department of State, the Agency for International Development, and the Department of Transportation) were given failing grades.

The Year 2000 problem is a computer glitch that dates back to the 1960s and 1970s when programmers designated the year by only two digits rather than four to save memory space. The year "1999," for example, appears as "99." Unless corrected, these date sensitive computer systems and microchips may misinterpret the two zeroes in "2000" as "1900." This confusion may cause the systems to generate erroneous information, corrupt other systems or possibly shut down.