Year 2000 Liability Bill Moving Through Congress

(September 22, 1998)  Legislation to limit the liability of businesses and organizations that share Year 2000 conversion information is working its way through the Congress.  A "consensus bill" supported by the administration and many legislators active on the issue passed the Senate Judiciary Committee last Thursday.  Prospects for passage this session are very good.

The prompt and thorough disclosure and exchange of information related to the Year 2000 conversion problems of entities, products, and services would greatly enhance the ability businesses and government to improve their Year 2000 readiness.  However, many are not sharing information because of concerns about the potential for legal liability associated with the disclosure and exchange of year 2000 compliance information.

On July 14 both Vice President Al Gore, and Bill Clinton, gave speeches on the overall Year 2000 problem, which also advocated passage of "Good Samaritan" legislation to address this litigation problem.  (See, Gore Speech and Clinton Speech.)

An "administration bill" was then introduced in both houses on Congress on July 30.   The Senate bill, S 2392 IS, titled the "Year 2000 Information Disclosure Act," was sponsored by Sen. Bob Bennett (R-UT) and four Democratic Senators.  The House bill, HR 4355 IH, bears the same title and content.  It was introduced by Rep. Dan Burton (R-IN).  A majority of its 27 cosponsors are Democrats.  Both bills were referred to the judiciary committees.

In addition, bills were introduced which offered stronger protections against lawsuits.  Rep. David Dreier (R-CA) and Rep. Chris Cox (R-CA) offered a bill promptly after the Gore and Clinton speeches.  On July 16 they introduced HR 4240 IH, the "Y2K Readiness and Antitrust Reform Act."  It would treat certain Y2K related suits as contract law suits, thereby eliminating some huge awards for pain and suffering and punitive damages.

On August 6 Rep. Dreier and Rep. Anna Eshoo (D-CA) introduced HR 4455 IH, the "Year 2000 Readiness Disclosure Act."  Most of the 25 other sponsors are Republicans.   This bill would protect against liability for unknowing false Y2K statements, like the administrations bills, but in addition, would make inadmissible in evidence in a Y2K suit accurate information conveyed in a written and  labeled "Year 2000 Readiness Disclosure."

A "consensus bill", bringing together most legislators, was worked out and announced last week.  This bill, an amended version of S 2392,  was adopted on Thursday, September 17, by the Senate Judiciary Committee.  S 2392 RS, takes the combined title of "Year 2000 Information and Readiness Disclosure Act."  It is widely supported in the Senate, and will likely be passed by the full Senate later this week or next.

This "consensus bill" would then be taken up by the House.  The House Judiciary Committee Chairman, Rep. Henry Hyde (R-IL) may let the bill go straight to the full House.

The consensus bill is also supported by the administration.  John Koskinen, head of the President's Council on the Year 2000 Problem, endorsed this version of the bill the day before the Senate Judiciary Committee met to vote on the bill.  Koskinen stated in a press release that:

On behalf of the President, I am pleased to support the "Year 2000 (Y2K) Information and Readiness Disclosure Act." Prompt passage of this legislation will make a vital contribution to our efforts to address the year 2000 problem.

...  To increase their chances of overcoming the problem, organizations must be able to exchange information about their experiences with products, their system fixes, testing protocols, and test results. This bill encourages the sharing of such information, either directly by companies or through republication of such information by others, by limiting liability for such disclosures as long as they are made in good faith.

The day after Sen. Orrin Hatch's Judiciary Committee reported out the amended version of the bill, the White House issued a Statement of the President endorsing it.  Clinton stated:

I am pleased that the Senate Judiciary Committee yesterday approved S. 2392, the "Year 2000 Information and Readiness Disclosure Act," which builds upon a proposal my Administration submitted to Congress in July. I urge Congress to act quickly to approve this critical legislation before the end of this session so that I can sign it into law. If it is not enacted this session, we will miss an important opportunity to help our Nation prepare its computer systems for the new millennium.