Lawyers in the US are gearing up for what may be the most calamitous aspect of the Year 2000 (Y2K) problem - the spillage of a messy technical issue into the even messier realm of the courtroom.
At least 16 lawsuits have been filed around the United States in connection with Year 2000 problems, including six against Intuit concerning older versions of its Quicken personal finance program.
The New York law firm of Milberg Weiss Bershad Hynes & Lerach, a prolific filer of shareholder class-action suits, has swiftly moved into the Year 2000 arena, setting up an expert inhouse group that has filed four Y2K lawsuits already. In the overall scheme of things, these early suits are over minor issues, typically the failure of some companies to offer free fixes for older programs.
They do, however, give a sense of the legal swarming that could occur when 2000 actually arrives. On the horizon are potential suits involving fraud, breach of warranty, liability, personal injury, and a variety of shareholder actions against company directors for failing to prepare for the Year 2000. The possibilities are endless.
What lawyers have awakened to is the same sense of ubiquity, unpredictability and entanglement that engineers have long seen as the core of the Y2K problem. It has created an equation of liability with a potentially unlimited pool of plaintiffs set before a universe of potential blame.
Although the ultimate effect of the Year 2000 bug is unknown - ranging from a global shrug to a temporary meltdown of highly computerised societies - the threat of widespread lawsuits has cast the issue into a different dimension.
"Lawyers, of course, are going to come out of this beautifully," said Brian P. Parker, a Michigan attorney who filed the first Y2K lawsuit in June 1997. "There will be hundreds of thousands of these cases. "
Capers Jones, of Software Productivity Research, a software consulting firm in Massachusetts, has put the global cost of the Y2K problem over a 10-year period, including damage and repair, at $3.6 trillion. He estimates that compensatory and punitive damage awards could amount to $300 billion. The first Y2K case in the United States was filed in June 1997 by a Michigan company, Produce Palace, that had purchased a computerised cash register system in 1995 which they said didn't work properly. The suit was filed against the manufacturers of the cash registers, TEC America, and the installers, All American Cash Register.
TEC America has denied that their devices were defective and filed their own suit against All American Cash Register, claiming human error in the form of improper maintenance and installation.
In many ways, blame has become an almost random issue with the Year 2000 since there are so many potential targets. Out of the thousands of flawed products, the lawsuits so far have landed on just a select group of companies.
Intuit has been hit with six class-action suits, although the problems with older versions of its Quicken software are relatively minor. The defect involves the inability of Quicken's online banking feature to accept dates past December 31st 1999.
The suits claim that Intuit knowingly sold a defective product and was forcing users to buy the latest Quicken version because there was no fix available for the older programs. But soon after the first suit was filed in April, Intuit announced that it would fix the programs free by the first quarter of 1999 at the latest. Despite the announcement, five more similar suits were filed in the ensuing weeks.
The first case filed by Milberg Weiss was dismissed last month. Inuit has either filed or plans to file motions to dismiss the remaining cases.
At least three suits have been filed against Symantec on essentially the same grounds. Symantec has taken a harder line, refusing to provide a free upgrade of Norton AntiVirus versions older than 4.0.
The program will continue to find viruses after 2000, but its automatic scheduler and activity log will not work, according to the company. After 2001, the scheduler and log will work properly again.
Jeffrey Klafter, of the New York law firm of Bernstein Litowitz Berger & Grossman, said these early cases are just the beginning. They were filed as much for marketing reasons as they were for legal ones, said Klafter, whose firm has filed three Y2K lawsuits so far.
"We want Bernstein Litowitz associated with this issue," he said. "For our firm, this is going to be a significant area of litigation."