Fair protection from Y2K lawsuits

Federal law: Clinton, Congress give businesses protection in case computer snarls mar Year 2000.

July 10, 1999

MUCH TO the relief of the business community, President Clinton reached an agreement with Congress on shielding companies from a potential tidal wave of lawsuits if something goes wrong with their computers next year.

Local businesses weren't as lucky in Maryland's state capital.

In April, the General Assembly had passed a somewhat similar bill, but Gov. Parris N. Glendening vetoed it, claiming there wasn't enough consumer protection.

We wish the governor had been more flexible.

Many older computers, as we now know, weren't built to recognize the year 2000. The result could be as mundane as a malfunctioning ATM machine or as disastrous as an inoperative airplane navigational system.

Companies have spent billions to fix this blind spot. But 66 lawsuits already have been filed over Y2K issues. Sen. John McCain, an Arizona Republican, warned of an estimated $1 trillion in potential lawsuits.

The legislation approved and sent to the president last week should deter most frivolous litigation. It will make it more difficult to bring class-action suits and will stop plaintiffs' lawyers from shopping around to find the friendliest state court.

Small businesses get a measure of protection, since punitive damages against them would be capped. And there's a huge incentive for companies of all sizes to fix Y2K woes in a hurry: They get 90 days to rectify matters before lawsuits can be filed.

The measure also contains consumer safeguards. President Clinton insisted on a "bad actor" provision against companies that don't act in good faith or intentionally cause damage. Democrats added another clause barring residential foreclosures if mortgage-payment processing is disrupted.

It wasn't rocket science. Mr. Clinton, ever the pragmatist, found ways to compromise that gave both sides a partial victory. That kind of common sense could be put to good use in Annapolis.

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