End users need to put their legal defences in place now as lawyers around the world prepare to make a killing out of the once in a lifetime opportunity presented by the Year 2000 crisis.
That was the stark warning issued by Steven Hook, a lawyer with San Francisco law firm Thelen, Marrin,Johnson and Bridges, to end user delegates attending last week?s Year 2000 Conference and Exposition in New York. He predicted a post 2000 scenario in which shareholders sue companies, customers sue suppliers and in which the only winners will be the lawyers.
?Think about it - how many $400 to $600 billion social problems have been resolved without copius legislation?? demanded Hook, illustrating his point by citing the example of the thousand of lawsuits related to asbestos poisoning.
There is, he claimed, no way of avoiding an outbreak of Year 2000 litigation. But it is possible to minimise the risk of being on the receiving end of legal action, he told his audience, if action is taken now to take preventative measures.
To begin with, end users must put their own houses in order by ensuring that their systems are Year 2000 compliant. ?I know it?s easier said than done,? admitted Hook,? but its is the most obvious solution to preventing legal exposure and by far the best one.?
But he acknowledged: ?No matter how hard you try, some degree of failure is almost inevitable.? With this in mind, Hook advised that users must keep a written record of diligence of their efforts to solve the problem. This has to be couched in terms understandable to a non-technical audience in court.
Hook emphasised that the principle of being judged by a jury of peers will not apply in the overwhelming majority of Year 2000 law suits. ?It?s an IT problem. You will be facing a non-peer jury,? he warned. ?If you start explaining why your computers failed in terms of the cost of memory chips in the 1960s, you?re just going to get a lot of blank stares.?
It is also important to ensure that all written material relating to Year 2000 issues follows a tight party line.Wherever possible, beware of people writing ?rogue? memos and emails. ?Emails are particularly dangerous because people don?t think as much about what they?re writing,? said Hook. Companies should establish guidelines to avoid creating evidence that can later be used against them in court.?
But the law can be used in favour of end users as well, added Hook. He told his audience that they should begin to document and examine all existing licences, warranties and maintenance agreements relating to their IT infrastructure. This should also involve sales brochures, advertising and any material that played a part in the procurement process. As well as providing the user with a clearer picture of the IT inventory, this process can provide unexpected rewards. ?You may find something in one of the documents that obliges the suppliers to help defer the cost of your Year 2000 work,? explained Hook.
Equally important is to produce an inventory of existing insurance policies and to subject them to close analysis in the hope that the terminology used is open to interpretation that can accomodate the Year 2000 expenses of conversion. This is not as unlikely as it may seem, insisted Hook.?Year 2000 costs might be recoverable under the terms of some first party insurance schemes,? he explained. ?Such policies are usually thought of as covering loss in circumstances such as the building burning down, but it could also cover the loss of business records. non Year 2000 compliant systems are likely to lose business records.?
Any new insurance policies must not be signed without taking into account Year 2000 related liabilities. Hook predicted that the insurance industry will begin to build in Year 2000 exclusion clauses, but added that some specialist firms will offer specific millennium risk policies.
Hook concluded his address with what he acknowledged in advance was undoubtedly an unpopular suggestion: include some form of legal representation on the corporate Year 2000 planning group. ?No-one likes this idea,? he said,? but the legal counsel can assist businesses in working through the legal issues at the same time as the project management and technical issues. They are inextricable.?
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