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Y2K Act Limits Lawsuits over Software Bug Skeptics fear that widespread computer failure at the beginning of the year 2000 could cause significant disruption for businesses and individuals that are computer dependent. While the impact, if any, of the Y2K Bug is hotly debated even among computer experts, no one knows for certain the exact consequences of the Y2K Bug. Due to the inherent nature of the Y2K Bug, the extent of Y2K Bug damage will not be understood until January, 2000. The legal implications of the Y2K Bug first attracted the attention of Congress when major equipment vendors, such as IBM and AT&T, were sued for not informing customers who purchased their products in recent years that the equipment is not Y2K compliant, as well as for not providing free upgrades that would inoculate the software from the Y2K Bug. As the year progressed, the media circulated an estimate that the Y2K Bug could produce up to $1 trillion in damage claims against the software industry. The Y2K Act, which President Clinton signed into law this year, addresses the widespread concern that computer glitches could produce a flood of litigation against computer software manufacturers and vendors. Under the Y2K Act, if computer software malfunctions as a result of the Y2K Bug, the owner of the software must comply with specific procedures before filing a lawsuit against the manufacturer or vendor of the software. A prospective Y2K plaintiff must first send written notice to each prospective defendant describing the alleged software defect, the harm suffered as a result of the defect, the remedy the prospective plaintiff requests, as well as other basic information. Within 30 days, each prospective defendant must reply to the prospective plaintiff and describe the action that has been taken, or will be taken, to remedy the problem experienced by the prospective plaintiff. If a prospective defendant fails to respond within 30 days, or the response does not propose a remedy to the problem, the prospective plaintiff may commence legal action immediately. If a prospective defendant instead responds with a proposed remedy for the problem, the prospective plaintiff must allow an additional 60 days for the prospective defendant to implement the remedy. If the prospective defendant fails to implement the remedy within that time, legal action may be commenced. The purpose of this legislation is to create a dispute resolution mechanism outside of the courts by which software users afflicted by the Y2K Bug can resolve grievances with the manufacturer or vendor of the defective software. Many Y2K Act supporters believe that the Y2K Act is helpful to consumers because it offers them a less expensive alternative to litigation if they suffer Y2K Bug problems. Additionally, the Y2K Act states that one of its purposes is to allow software companies to channel funds away from litigation and toward development of solutions to Y2K Bug problems. Nonetheless, some critics of the Y2K Act charge that it unfairly protects the software industry by keeping it beyond the reach of litigation and by creating unnecessary and unfair hurdles that must be cleared before consumers may file a lawsuit. In addition, critics believe that the procedural requirements of the Act are so complicated that prospective plaintiffs need an attorney to help them comply with the Act's provisions, so the Act offers no real savings for consumers with respect to legal fees. The effect that the Y2K Bug will have on computer systems remains largely unknown. However, prudent software consumers should understand that the Y2K Act substantially alters their legal recourse in the event they are bitten by the Y2K Bug. § |
