-Caveat Lector-

U.S. lawmakers chase deal to curb Y2K lawsuits

By Adam Entous

WASHINGTON, April 9 (Reuters) - U.S. lawmakers hoped to strike a deal in the
coming weeks on legislation limiting lawsuits against companies stemming from
the year 2000 computer bug, after influential business groups said they may
be willing to drop a demand for caps on punitive damages to win Democratic
support.

Competing legislation by Senate Judiciary Committee Chairman Orrin Hatch and
Senate Commerce Committee Chairman John McCain would delay year 2000 computer
bug lawsuits during a 90-day "cooling-off" period, as well as cap punitive
damages and limit the liability of company executives.

Both Republican-sponsored bills have the support of a politically powerful
coalition of businesses, dubbed the "Year 2000 Coalition", representing the
nation's leading computer makers and software companies, banks and
manufacturers. But the bills have drawn fire from the Clinton Administration
and many Democrats, who complain they would give too much protection to
companies at the expense of consumers.

Aides for Republicans Hatch of Utah and McCain of Arizona said they were
working with Democrats on compromise legislation and said progress was being
made. A major sticking point has been a provision in both bills capping
punitive damages to $250,000 for many businesses, but aides said that might
be dropped.

The coalition of business groups had sought the caps, but members now say
that they would be willing to give up that provision and others to win
broader support for a compromise bill.

"If that's the price to get support, we have to look at it," an official with
the coalition said.

To gain Democratic votes, members of the business group said they might also
give up a provision limiting the personal liability of corporate officers and
directors to $100,000 in many cases. That provision has been criticized for
giving too much protection to rich company executives.

The coalition is desperate for the Republican-controlled Congress to work out
a compromise well in advance of Jan. 1, 2000, when the computer bug would
strike. They say lawsuits were already starting to pile up.

The millennium bug, often referred to as Y2K for year 2000, arises because
many older computers record dates using only the last two digits of the year.
If left uncorrected, such systems could treat the year 2000 as the year 1900,
generating errors or system crashes next Jan. 1.

In a letter this week to Senate Republican Leader Trent Lott of Mississippi,
the coalition urged the leadership to bring a compromise to the floor as soon
as possible.

"Congress must act soon. Every day of delay...will add to the uncertainty and
anxiety of business owners all over America and inhibit efforts to be Y2K
ready," the letter said.

Coalition members include the U.S. Chamber of Commerce, the National
Association of Manufacturers, the Securities Industry Association and the
American Bankers Association, as well as the Information Technology
Association of America, which represents IBM <IBM.N>, Microsoft Corp.
<MSFT.O>, AT&T Corp. <T.N> and other high-tech companies.

Supporters say legislation was needed to cut down on the number of frivolous
Y2K lawsuits, which could cost more than $1 trillion worldwide, according to
some experts.

The U.S. Justice Department says the McCain and Hatch bills, in their current
form, were ripe for abuse and might undermine Y2K readiness by taking
pressure off the very companies charged with fixing the problem. Consumer
advocacy groups say small businesses and computer users should have every
right to sue big companies for Y2K problems.

The House Judiciary Committee will consider a similar bill limiting Y2K
litigation at an April 13 hearing.

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