California bill would curb millennium bug lawsuits

California state legislators are due to hear a proposed bill that would severely limit the amount software makers can be asked to pay in damages for so-called Year 2000 problems.

If passed, Assembly Bill 1710 would prevent consumers from asking courts for punitive damages, or payments for pain and suffering, related to Year 2000 computer failures. Customers would only be allowed to seek compensation related to business lost as a result of the failure, and for the cost of fixing or repairing equipment.

"Some sort of reasonable public policy in this area has to be implemented, or we're going to put our high-tech industry at a severe disadvantage to computer companies in other nations," said Matthew Hargrove, an aide to California Assemblyman Brooks Firestone, who co-authored the bill.

While legislation has been proposed or approved in California, Georgia and Nevada protecting the state from liability for millennium bug glitches, this is the first legislation proposed in the US that would extend such protection to businesses, said Barbara Wheeler, a legislative advocate for the Association for California Tort Reform, which is sponsoring the bill.

AB 1710's proponents, which also include Intel and the American Electronics Association, say the bill will help stave off an expected avalanche of lawsuits when such problems roll around. In addition, they say, limiting liability claims will give consumers an incentive to make sure their software is ready for the date change.

To qualify for protection under the bill, software makers would be required to provide a free upgrade for all off-the-shelf products introduced after 31 December 1997; to notify registered users that their system may experience problems, and tell them how they can get it replaced or repaired, Hargrove said.

"If they sit on their hands and do nothing, they would not be protected by this bill," Hargrove said.

AB 1710 has stirred opposition, notably from a band of trial lawyers who call themselves the Consumer Attorneys of California. In a press conference last week, trial lawyers said the bill is too broad and gives too much protection to software makers. In addition, they said, passing legislation now would be premature given that the scope of the 2000 problem is not yet known.

Firestone and the bill's co-author, Assemblyman Jim Cunneen, shot back at the lawyers in a press release, charging them with exploiting the 2000 issue for personal gain by bringing "frivolous" lawsuits to trial.

If approved, the bill would outlaw repeats of the kinds of class-action lawsuits that have been filed already against a handful of California software makers.

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