Congressional Republicans and the White House on Tuesday reached a compromise on legislation to protect companies against Y2K lawsuits, settling a dispute that threatened Vice President Al Gore's ties with the high-tech community ahead of the 2000 presidential race.
Negotiators for the Republican-led House and Senate said the legislation would delay the filing of Y2K lawsuits for up to 90 days, giving companies time to fix any problems. It would also make it harder for consumers to bring and win suits stemming from the Y2K computer glitch, and would cap punitive damages in certain cases.
To satisfy the White House, which had threatened to veto earlier versions of the bill, lawmakers agreed to changes aimed at boosting consumer protection and divvying up liability if computers crash on 1 January.
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Republicans in Congress and the White House were eager to settle their differences. Republicans count on big business for support. Gore, the Democratic front-runner in the 2000 presidential race, can ill-afford a backlash from the high-tech industry.
"There was a realization on both sides that this is so critical to American business," Senate Commerce Committee chairman and Republican presidential hopeful John McCain of Arizona told a hastily assembled news conference announcing the compromise.
The House and Senate are expected to vote on the legislation later this week. In a letter to lawmakers, White House chief of staff John Podesta said he would "advise that the president sign this bill."
The millennium bug arises because many older computers use only the last two digits of a year to record dates. Unless corrected, such systems could treat 2000 as 1900, generating errors or system crashes.
Congress approved legislation earlier this year to curb Y2K lawsuits at the urging of politically powerful business groups representing IBM, Microsoft, AT&T, and the technology industry at large.
Business groups said legislation was needed to rein in lawyers plotting a millennium bug offensive against technology companies. According to some experts, Y2K-related litigation costs could add up to US$1 trillion.
But the White House said the legislation provided too much protection for big business at the expense of consumers. It threatened to veto the bill unless McCain and other Republicans agreed to an overhaul.
Under the compromise announced Tuesday, the filing of Y2K lawsuits would be delayed during a 30- to 90-day cooling-off period. It would make it harder for lawyers to bring class-action lawsuits and limit punitive damages for small businesses with fewer than 50 full-time employees.
Lawmakers and the White House agreed on rules for proportionate liability, class action suits, determining economic losses and enforcing existing contracts. Under the compromise, private security claims would not be affected.
"Nobody got exactly what they wanted," said Senator Ron Wyden (D-Oregon). But he added: "I think we struck a good balance."
Business groups hailed the agreement.
"Millions of small businesses, communities, hospitals, and high-tech entrepreneurs can now focus on fixing any remaining Y2K problems, instead of worrying about a group of trial lawyers looking to get rich off Y2K," said US Chamber of Commerce president Thomas Donohue.
Copyright© 1999 Reuters Limited.
