Statement of Sen. Orrin Hatch (R-UT).
Re: Introduction of S 461, the Year 2000 Fairness and Responsibility Act.
Date: February 24, 1999.
Source: Senate Judiciary Committee. This document was created by scanning a fax copy, and then converting it into HTML.

STATEMENT OF SEN. ORRIN HATCH
PRESS CONFERENCE TO ANNOUNCE
INTRODUCTION OF THE YEAR 2000 FAIRNESS AND RESPONSIBILITY ACT

I am pleased to announce today the second major bipartisan agreement in the last six months concerning the year 2000 computer problem, more popularly known as the "Y2K Problems" or the "Millennium Bug."

As you may recall, I made a similar announcement on September 16, 1998, regarding bipartisan agreement on legislation, which the President signed into law about a month later, that facilitates information disclosure concerning this vexing problem.

Stated briefly, the Y2K Problem involves the inability of computer systems to recognize 21st-century dates. When first invented, computers were programmed to interpret years by only the last two digits. Thus, 1999 would be expressed as simply 99, the assumption being that the first two digits would always be 19.

Although this may have been an acceptable business practice at the time, because computer memory was very expensive, it was destined to create the year 2000 problem. This so-called "Y2K" glitch means that computers would either mistake 00 as meaning 1900, or they would shut down for failure to understand it at all. Technicians and economists have predicted that this problem, if not corrected in time, could result in either a recession or at least serious economic dislocation.

Last year, we forged a bipartisan agreement that resulted in a unanimous Congress passing a Senate Judiciary Committee-reported bill that fosters the sharing of remedial information on the Y2K Problem. In so doing, we helped unleash the genius of the American private sector, which, freed from the fear of an avalanche of lawsuits, could focus on exchanging critical information about Y2K problems and solutions.

As I mentioned last September, I felt that the bill we passed then was only an emergency first step that would allow businesses and consumers to start sharing information immediately. I said that further legislation would be necessary early in the 106th Congress, which is why Senator Feinstein and I announce today our introduction of the Year 2000 Fairness and Responsibility Act.

The bill is essentially follow-up legislation to the bill we successfully passed last year in that it encourages Y2K problem solving rather than a mad rush to the court house, The bill's main feature is its requirement that there be a 90-day remediation period before any Y2K-related litigation may begin.

It is significant that the bill does not prevent anyone from litigating a valid claim. Rather, it merely imposes a brief time-out, during which plaintiffs, defendants, businesses, consumers, and, above all, innocent users will have the opportunity to resolve Y2K problems without resort to costly and time-consuming litigation. Our hope is that the remediation period will provide an incentive to all parties to solve their disputes outside the courthouse.

This is important because some experts have predicted that the world-wide cost of Y2K related litigation will amount to a staggering $1 trillion. As a result, companies of every variety will be forced to devote precious resources to litigation rather than to repairing and preventing computer problems and related economic dislocation. This bill will help prevent such a disastrous scenario.

I would also like to call attention to two provisions in the bill that significantly reform-in the Y2K context only-widespread abuses in the legal system. First, the bill limits punitive damages in non-personal-injury cases to either: (1) lesser of three times actual damages or $250,000 for individuals whose net worth is $500,000 or less and for small businesses; or (2) the greater of three times actual damages or $250,000 for all other defendants. Second, the bill prohibits frivolous class actions by allowing a class action to proceed only if a majority of the class members' claims involve material Y2K defects.

This bill reflects the high level of cooperation and broad consensus that large manufacturers, small businesses, the telecommunications industry, the information technology industry, electric utilities, and professional associations have been able to achieve. They are all to be commended for their efforts in helping us craft this vitally important legislation.

Also, I would like to express my profound thanks to Senator Feinstein, as well as to Senators Bennett and Dodd, Chairman and Vice Chairman, respectively, of the Senate Y2K Special Committee, and their Committee staff for assisting us in this effort.