NCPA - National Center for Policy Analysis

Lawyers See Gold In Y2K Liabilities

March 29, 1999

Firms whose computers crash this coming January 1 will generate a lot of discontent among their business associates -- and a potential welter of lawsuits against them. The prospect has lawyers smiling.

  • By some estimates, American business is spending $2 to $3 in litigation associated with Y2K for every $1 it spends on remedying the problem itself.
  • At that rate, according to Lloyd's of London, millennial litigation could be a trillion-dollar industry.
  • Y2K-liability laws introduced in the House and Senate in February would cap punitive damages against companies at $250,000, require a 90-day waiting period to allow a prospective defendant to fix the problem before having to go to court, and limit attorney fees to $1,000 per hour -- which is higher than any attorney currently charges.
  • The Association of Trial Lawyers of America -- which gave campaign donations totaling $2.4 million last election cycle, 85 percent of it to Democrats -- loathes the legislation and intends to lobby intensively against it.

Observers predict the political battle between business and the lawyers will get very ugly.

Source: Jonathan P. Decker (USA Radio Network), "Why Y2K Makes Lawyers Cackle With Glee," Fortune, April 12, 1999.


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