BY PHILLIP PINA
The Cincinnati Enquirer
The millennium bug may lead to an outbreak of litigation.
Computer experts warn that computers originally programmed to recognize the last two digits of the year will malfunction or fail on Jan. 1, 2000, when the machines assume it is 1900. It has been estimated to cost about $600 billion to upgrade the nation's computers to handle the calendar's progression.
Early litigation
Along with the questions of how to fix the problem has arisen the question of blame, said Joe Dehner, a partner in the law firm of Frost & Jacobs LLP. Then add the question: Who will pay to fix it?
The concerns are leading to a growing number of lawyers specializing in the "millennium bug," or "Y2K" (Year 2000) problem. Frost & Jacobs, one of Cincinnati's largest law firms, has created its own Y2K committee, with about a half-dozen attorneys.
"There's a lot going on right now, and obviously companies need to be prepared," said Mr. Dehner, chairman of his firm's Y2K committee.
Corporations are seeking assurances from software firms they will be protected from the millennium bug. On the other hand, those software firms are advised to protect themselves from failures and the subsequent lawsuits.
At least 10 lawsuits have already been filed nationwide, he said. One includes a software firm that told customers they would never outgrow its software, only to find a costly upgrade would be needed to fix the Y2K problem. The firm wanted to charge its customers for the upgrade. Customers disagreed.
Heightened interest
The Y2K risks for lawsuits are plenty: Money transactions could be lost, assembly lines may stall and needed information could be lost. Utilities could interrupt power production; medical devices could fail.
Interest in Y2K liability issues has heightened the past six months. Attorneys are beginning to hold Y2K conferences across the nation. Large law firms are assembling millennium bug teams. Legal reporting services are even printing journals on the problem. Legal watchers estimate the number of lawyers working on the Y2K issue nationwide is about 4,000 and rising rapidly. Some predict the millennium bug lawsuits will overshadow the tobacco, breast implant and asbestos cases.
About a half-dozen brochures land on the desk of Bill Dorece each week warning about Y2K liability issues. An army of experts has formed, and whole seminars are held, said Mr. Dorece, vice president of business development for Tominy Inc. His Blue Ash firm has developed software to help computer users correct the Y2K problem.
Businesses have become so dependent on computer systems that most are unable to operate without them, Mr. Dorece said. Computer experts at first focused on solving the problem, he said. But in the past six to nine months, the attention has focused on the liability factor: What happens if a company doesn't fix the problem? And what if the repairs fail?
Companies used to guarantee they could cure the millennium bug, Mr. Dorece said. But attorneys have stepped in to urge caution when making promises. His firm is a customer of Frost & Jacobs.
Some estimates put the total legal cost for Y2K failures at $1 trillion -- well above the anticipated $600 billion cost of exterminating the computer bug. For every dollar spent on repair, another $1.50 to $3 could be spent on litigation, according to recent estimates by lawyers now preparing to file the suits.
Congress and President Clinton are considering laws to limit Y2K liability. But attorneys say they can't suspend basic laws governing property damage, personal injury, product liability and breach of contract.
"The potential litigation is so vast it's almost impossible to legislate against," said Washington attorney Laurence Eisenstein, chairman of his firm's 18-lawyer Year 2000 task force.
Lawyers know this. And they're preparing.
Gannett News Service contributed to this report.
