Y2K: It ain't over till the fat lady sues

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Y2K: It ain't over till the fat lady sues

Wednesday January 19 9:06 PM ET

Lawyers Gear Up for Millennium Bug Attack By Neil Winton

LONDON (Reuters) - ``It ain't over till the fat lady sues.'' That's the message which greets visitors to the web page of Ross & Co, a law practice in South Wirral, northwest England, which specializes in millennium computer bug law suits. www.y2kalert.com/fatladyis a reminder to those who believe that the lack of mayhem caused by the millennium computer bug over the New Year proves it was a non event.

``Stories about the death of the millennium bug have been exaggerated,'' said Mark O'Conor, a lawyer with Bird & Bird. Law suits worth hundreds of millions of dollars are in the pipeline, seeking damages for a range of problems.

Some corporations will allege over-charging by information technology consultancies, or that consultants induced work that was unnecessary. Other companies might seek to recover huge sums spent on new computers because they were persuaded that unless they were installed, the business might disappear into a cyberspace blackhole.

Justify Spending

Also expect law suits from shareholder groups who wonder why companies in Britain and the United States spent vast amounts to insure their equipment against the bug, while state-owned enterprises in countries like South Korea and Italy, with similar equipment, spent nothing and had no problems.

The lack of any spectacular evidence of millennium bug problems did not surprise experts like the Gartner Group of the United States. The information technology research company said such expectation showed a lack of understanding of the nature of the bug, which resulted from some computers, programmed with abbreviated years like 87 or 92, tripping over the zeros in 2000 and crashing or spewing out erroneous data.

The Gartner Group, which reckoned that the global cost of repairing the bug would be between $300 billion to $600 billion, said fewer than 10 percent of problems would occur during the two weeks surrounding January 1, 2000. Fifty-five percent of problems would hit over the rest of the year.

Any problems would be the result of computer systems being gradually degraded, like sand in an engine.

``It's too early to say what (legal action) might come out of the woodwork,'' said Alistair Maughan, a London partner with law firm Shaw Pittman of Washington, D.C.

Grounds For Legal Attack

Graham Ross, partner at Ross & Co, said companies which were persuaded to repair software or buy new computers to avoid being hit by the bug might sue, alleging that the original equipment should have withstood the changeover to 2000.

Other companies might seek to invoke the so-called ``Sue and Labour'' principle. ``Sue and labour'' originated in marine insurance and covered a shipping company if it was forced to take emergency action against an imminent threat, which, if not taken, would sink the vessel. The expense of the purchase of new computers or expensive IT advice to avoid the millennium bug could in theory be charged to insurance on these grounds, Ross said.

Smooth talking sales staff might have persuaded companies to make unnecessary purchases.

``You might have been advised to buy new PCs (personal computers) when all that was needed was a simple bios (internal clock) fix. If the company was motivated by a plan to sell more computers rather than just fixing the problem, if you spent money unnecessarily you might have a claim,'' said Ross.

Shareholders may also be wondering if huge sums spent to stop the bug might mean company directors have breached fiduciary obligations. According to Ross Anderson of Cambridge University's Computer Laboratory, British Telecommunications and South Korea bought similar telephone hardware in the late 1980s. Speaking in the middle of 1998, Anderson said BT would spend around 500 million pounds ($800 million) making sure it was not destroyed by the millennium bug. South Korea up to that point had spent nothing because it didn't see a problem. ``They can't both be right,'' Anderson said at the time.

In the event no big problems were reported from BT or South Korea. Shareholders will want to hear convincing reasons for spending on this scale and could seek compensation from directors if huge sums were judged to have been spent unnecessarily.

Allegations Difficult To Prove

But most company directors and consultants can breathe easy, according to Julian Stait, partner at Dibb, Lupton Alsop. ``It would be extremely difficult to prove a case against consultants. How would you show that they actively misled or fraudulently convinced a company to spend money,'' said Stait, the firm's lead technology lawyer.

It would be tough to prove that company directors were to blame for excess spending.

``You would have to show a breach of duty of care and that huge sums were spent when they did not need to. The fact that they spent lots of money and then had no problems might show completely the opposite, might show they spent the money well,'' Stait said.

Last year, when some commentators still worried about some kind of millennium meltdown, estimates from the United States reckoned that litigation induced by millennium bug failures could lead to claims of up to $1 trillion.

Would there still be a wave of law suits or a trickle?

``Somewhere in between. There were lots of disputes in the U.K. last year; a couple went to mediation. One was worth about 200 million pounds ($330 million) and one or two still remain to be resolved,'' Stait said.

``Windowing'' Safe Until 2020

Some Y2K experts still cling to the belief that there are more dates that could trigger computer failure. There's February 29, 2000, which may not appear on some calendars because of a complicated scientific formula in which years marking the start of a century are leap years only once every 400 years. 2000 is such a year.

October 10, 2000 is the first date in 2000 with eight digits. A few diehards expect trouble there. A long range trigger date which might well be forgotten when it arrives is the year 2020. It is a theoretical problem because of the ''windowing'' technique often used to cure software from millennium bug attack.

``Windowing'' has no connection with software giant Microsoft's Windows products.

It was a cheap way to fix the problem which kept old software, but ordered computers to add ``19'' to numbers which were 20 or more -- so 94 became 1994. Numbers of less than 20 -- 05 for instance -- would be allocated a 20 to become 2005.

Unfortunately this would mean 2020 would become 1920.

``Were companies told that this method was used,'' asked Ross. ``If a supplier says he's given you a compliant system but used the Windowing technique, you still haven't been supplied with proper software, but you've got 20 years to do it,'' Ross said. ($1-.6079 Pound)



-- Carl Jenkins (Somewherepress@aol.com), January 20, 2000


I have been off line for over a week, but for what it means... I heard nothing about refinres shuting down or nuke plants or over seas junk, I am puter stupid and also poor, I do not live in a trailer park ,tho... I wish I was smarter, I feel what is coming...just don't see it. THANKS ED. YO ANT sandy

-- sandy (rstyree@overland.net), January 20, 2000.

And it was all kind of interesting until they made that bizarre 2020 windowing claim. There's no standard for windowing; some companies may have used 20, but British Energy used 10 (bizarre but true), and many of the developers I spoke to used 50 (bonus points to anyone who knows the significance of 1950 in dating). Heck, some will have used 90.

Goes to show how useful "facts" are even when they're provenanced.

-- Servant (public_service@yahoo.com), January 20, 2000.

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