Academic journal article The Review of Litigation

State and Federal Year 2000 Legislation

Academic journal article The Review of Litigation

State and Federal Year 2000 Legislation

Article excerpt

I. Nature of the Year 2000 Problem

The Year 2000 problem, known as the "millennium bug," is caused by a commonly used programming shortcut in which two-digit fields are used rather than four-digit fields to represent dates. This programming shortcut was originally used because of the high price and limited amount of computer memory available in the 1950s and 1960s, the early days of computer architecture. Although memory storage subsequently became more available and more economical in the 1970s and 1980s, programmers did not begin to modify datesensitive computer coding to accommodate four-digit date fields until the middle of this decade.

Year 2000 problems occur when date-sensitive programs using two-digit fields try to perform functions with the number 2000. Reading the year 2000 to be "00," non-compliant programs will calculate 2000 to represent 1900. As a consequence, these programs will yield inaccurate date calculations or may completely malfunction. Many systems, particularly those that process credit cards, have already begun to experience Year 2000-related problems.

Computer systems play an integral, and sometimes unknown, role in our daily lives. They process our paychecks, calculate our employment benefits, and tell our lawn sprinklers when to operate. Inevitably, Year 2000 failures will occur, particularly with respect to older software and control systems that contain embedded microchips. The extent and magnitude of harm caused by these Year 2000 failures, however, is not easily predicted.

Because of the complexity and breadth of the Year 2000 problem, businesses are expected to spend billions of dollars identifying and remediating their computer systems. The Gartner Group, based in Stamford, Connecticut, is an information technology research, analysis, and consulting firm. The Gartner Group estimates that United States businesses will spend between $300 billion and $600 billion addressing the Year 2000 problem.' For instance, AT&T estimates that it will spend $900 million, Chase Manhattan estimates that it will spend $363 million, Sears estimates that it will spend $143 million, and McDonald's estimates that it will spend $30 million identifying and remediating Year 2000 problems.2 Regardless of the ultimate severity of the problem, it undoubtedly is and will be an alarmingly expensive issue for businesses in the United States.

The business expense of curing internal Year 2000 problems, however, could be exceeded by the legal expense created by the problem. One commentator has estimated that the total losses arising from Year 2000 litigation could exceed $1 trillion in the United States.3 Unfortunately, the specter of mass Year 2000 litigation may be exacerbating the effects of the problem. Many businesses are hesitant to provide a cure for known Year 2000 problems for fear that such action may be construed as an admission of negligence or misconduct that could have an adverse effect in future litigation. Likewise, many businesses are reluctant to communicate with their vendors, suppliers, and customers about Year 2000 compliance because of the concern that the information that is exchanged may be used to impose legal liability in future litigation. In short, the fear of potential legal liability appears to be impeding the necessary process of identifying and curing Year 2000 problems. As a result, Congress and many states have begun legislative efforts to minimize the consequences of the Year 2000 problem.

II. Federal Legislation

Congress, cognizant of the risks associated with the Year 2000 problem and its potential effect on the United States economy, has already passed one piece of legislation addressing the Year 2000 problem and is presently considering other Year 2000 legislative initiatives. Specifically, Congress has passed legislation intended to encourage the exchange of information about Year 2000 readiness, and is considering legislation designed to limit or manage private and governmental liability for Year 2000 failures. …

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