STORY:
Y2K Lawsuits Limited By A Plan Approved By U.S. House

In a measure approved by a 236-190 vote, the House approved legislation to help limit an estimated US $1 trillion of litigation from the millennium bug problems, according to a Reuters story. The plan was passed even after the White House had threatened to veto the measure.

The measure would delay lawsuits during a 90-day "time-out" period, cap punitive damages and limit the liability of company executives.

House Representative, Republican David Drier of California told Reuters "This legislation does not eliminate anyone's right to sue."

The measure is aimed at stopping frivolous claims, not legitimate ones, and to better allow efforts to solve the problem.

The bill was pushed by computer and software companies and a wide range of other business groups. But the White House and many House Democrats opposed it, arguing it would give too much protection to big business at the expense of consumers.

The story reported from Rep. David Bonior of Michigan, the second- ranking Democrat in the House, "This act would effectively strip consumers of their right to pursue justice in the courts and it would send a terrible message that some corporations can defraud consumers and just walk away."

A similar measure stalled in the Senate, but could be revived next week. The White House has also threatened to veto the Senate bill.

A White House Office of Management and Budget policy statement said "This legislation goes far beyond what is reasonably necessary to address litigation concerns associated with Y2K computer problems."

It was the pressure from business groups like the U.S. Chamber of Commerce and National Association of Manufacturers, that Republicans in both chambers of Congress proposed liability limits in Y2K-related lawsuits.

Like its companion in the Senate, the House bill would cap punitive damages at $250,000 for many businesses and limit the personal liability of corporate officers and directors to $100,000 in many cases.

Some opponents of the legislation said it was ripe for abuse and could undermine Y2K readiness by reducing pressure on companies dealing with the problem.

Source: Reuters

DATE: 5/13/99

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