Law firms are warning insurance companies and computer manufacturers they could face huge claims over their handling of the Year 2000 issue.
Jeremy Holt of Clark Holt, a firm of commercial solicitors, said strictly speaking, software supplied which does not meet Year 2000 compliance does not meet quality standards. As a result, users filing lawsuits could be in a strong position.
Lawsuits against computer software companies will result in huge claims being passed on to product-liability insurers. However, if an insurer can prove that consultants or independent software vendors were aware of the Year 2000 problem at the time they delivered the software, they would be in a position to contest claims, say lawyers.
As for customers pursuing liability cases against suppliers and consultants, Holt warns that their success would depend on the wording of their software licences. "Companies can only claim a breach of contract within six years of the licence being issued," said Holt.
He urged companies to look closely at the exclusion clauses in licences, particularly the exclusion of consequential loss. "Invariably, in any computer contract, suppliers accept liability for direct loss (resulting from running their software) not loss of business," he added.
This latest twist in the Year 2000 fiasco is another blow to big computer companies. For years they have been reaping the benefits of selling fundamentally flawed software and hardware. It's about time they took responsibilities for their actions.
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