Lawyer doubts law will have effect on 2000 disputes

How much impact will the Year 2000 Information Readiness and Disclosure Act have on
legal disputes between the federal government and contractors over year 2000-related
systems failures? Very little, one Washington lawyer predicts.


Although most civil proceedings are covered under PL 105-271, contract enforcement
actions brought by a government agency are not, said Michael Aisenberg, who represented
industry interests in drafting key provisions of the law.


The law, which won enthusiastic support from the President’s Council on Year 2000
Conversion, does not protect contractors involved in enforcement actions or administrative
proceedings brought by a federal or state agency, Aisenberg said.


Government contractors that think the law’s privileges ought to apply to them
“will have to wait to see how a magistrate or agency head rules on
applicability,” Aisenberg said.


Attorneys are uncertain whether the law would apply during appeals of contract disputes
under the Federal Acquisition Regulation. “I can tell you there’s wide debate in
the contracting community,” Aisenberg said.


The act protects contractors and vendors from liability for making year 2000 statements
that prove to be inaccurate or untrue. Companies are free to make written statements
disclosing their year 2000 readiness without fearing it could be used as evidence against
them later.


The law also permits businesses and agencies to republish year 2000 readiness
statements made by others or to create links to third-party Web sites, without bearing
legal liability if the statements turn out to be false, Aisenberg said.


A special data-gathering privilege under the disclosure law encourages organizations to
answer government requests for year 2000 data. In exchange, the government has agreed not
to disclose such information in a court proceeding or a Freedom of Information Act
request.


The administration, which has sought readiness assessments from key sectors of the
economy, wants to encourage cooperation by industry associations that will gather the
information, Aisenberg said.


The act makes a limited antitrust exemption for sharing year 2000 data, and it
recognizes the legal status of readiness statements posted on Internet Web sites, e-mail
list servers and electronic bulletin boards.


The intent of the law, which expires in 2001, is to reduce frivolous litigation and let
businesses “share information with some sense of comfort so that more remediation
work could get done,” Aisenberg said.


Speaking at an American Bar Association forum in Washington, Aisenberg said the
friction points between the government and its contractors have produced most of the year
2000 policy initiatives either completed or under way.


Still in draft form are a number of federal legislative proposals to protect industry
from liability lawsuits. Any year 2000 liability law, if passed, would apply to disputes
at both federal and state levels, Aisenberg said.


All of the draft proposals, he said, show agreement on key provisions. Contractors and
vendors would have a chance to correct a defect before being slapped with a liability
suit.


Contract language for solving disputes would prevail over alternative resolution
provisions in the law. Contractors and vendors could claim industry-standard practice as a
defense.


None of the year 2000 liability proposals being floated would protect against
prosecution for personal injury or fraud, Aisenberg said. In all cases, claims would be
limited to actual, direct damages.


Aisenberg said state legislatures have mistakenly, in his view, sought protection from
lawsuits brought by citizens if state services are interrupted.  


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