clock menu more-arrow no yes

Filed under:

White House and Congress compromise on Y2K bill
Firms to get time to fix bugs before suits can be filed

WASHINGTON -- Congress and the White House, after days of negotiations, have agreed on legislation to restrict lawsuits relating to losses resulting from Y2K computer problems.

Business and high-tech groups were delighted, saying the legislation could save them billions of dollars better used to fix computers. Consumer groups, though, faulted the White House for sacrificing consumers in favor of business special interests.After five days of intense negotiating, White House Chief of Staff John Podesta said in a letter Tuesday that he would urge President Clinton to sign the compromise.

With that commitment, the bill could be approved by the House and Senate and sent to the president by the end of this week.

Earlier, the White House had made clear that Clinton would veto the bills coming out of the House and Senate because they went too far in taking away the rights of consumers to take legal action when they are wronged.

The Year 2000 problem -- also called Y2K and the millennium bug -- occurs because some computer programs, especially older ones, might fail when the date changes to 2000. Because the programs were written to recognize only the last two digits of a year, such programs could read the digits "00" as 1900 instead of 2000.

The compromise over the bill made several changes somewhat favorable to consumers, including making it more difficult to move a class action suit to federal courts, where it can be tied up for years.

A controversial measure ensuring that a business will be liable only for the proportion of damages it causes was also modified to say that "bad actors" won't be eligible for this legal status. Proportionate liability is supported by business groups who say lawyers often target companies with the deepest pockets, regardless of their involvement in a case.

The main tenets of the bill were provisions giving companies 90 days to fix computers before lawsuits can be filed and encouraging mediation. It also puts some limits on class action suits and caps punitive damages for small businesses.