The buzzards are waiting !!!!!

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Y2K Law Suits Trickle In, May Be Start Of A Flood Full Coverage Year 2000 Problem NEW YORK (Reuters) - The Millennium Bug that promised to swell U.S. courts with lawsuits arising from damage that may occur if a computer system fails to recognize the Year 2000 so far has resulted in only 74 cases filed, according to a report released Monday by PricewaterhouseCoopers.

The trickle has the potential to turn into a full fledge flood after the clock strikes midnight 1999, some experts said.

As of June 30, there were only 74 cases filed in state and federal courts against 45 defendants that related to the Year 2000 computer glitch (Y2K), according to the report.

In the first half of 1999, only 13 cases were filed, compared to 21 in the second half of 1998, excluding multiple filings against the same defendant, the report said.

Law firms have created special sections devoted solely to the Y2K issue. They are poised to both defend their clients from law suits and initiate suit on their clients' behalf, the report said.

``If both are positioning for a wave of litigation, we can expect the trend to develop,'' Philip Upton the author of the PricewaterhouseCoopers report wrote.

``I really don't know what it's going to be,'' Upton told Reuters. ``There is a potential for them to create litigation. It's all very speculative. Y2K hasn't happened yet. I'm trying to get away from the hype.''

When the Y2K problem first came to the national attention nearly three years ago, some experts expected the much ballyhooed problem to disrupt everything from banking to flying to elevator rides when the year 2000 begins. Some expects at that time predicted the legal bills resulting from the onslaught of lawsuits would hit $1 trillion.

In June, the actuarial firm Milliman & Robertson Inc. estimated that legal costs for Y2K problems ultimately could range between $5 and 10 billion.

The first lawsuit involving the problem was filed in 1997 by a small fruit and vegetable store in Warren, Mich. The owner of Produce Palace spent $100,000 for a new computerized cash register system. The owner sued the maker of the system when it could not process credit cards with expiration dates after 1999. The case has since been settled for $260,000.

Although the projections of the legal costs associated with Y2K have been trimmed, experts say the legal lull may come to an abrupt halt after the ball comes down in Times Square on New Year's Eve.

``I think it's the calm before the storm because we're going to see a spiking of activity as failures actually occur next year.'' said Pete Whalen, partner in the Y2K group of the San Francisco law firm Hancock Rothert & Bunshoft. ``It's still one of the biggest litigation problems since pollution and the asbestos problem.''

If a computer system -- predicated on recognizing only the last two digits of a year -- reads 2000 as 1900 its information may be inaccurate, or worse, the system may crash.

Some legal, computer and financial analysts have said the results could result in disruptions to a variety of services such as airline traffic, banking and even elevator operations.

Remediation, correcting the problem before it starts, may have prevented some lawsuits, the report said, but created others. As companies spend millions correcting and reprogramming their systems, they are turning to their insurance companies to foot the bill.

GTE Corp. (NYSE:GTE - news) filed a federal suit against five of its insurers hoping to reclaim some of the $400 million it spent upgrading its computer systems to accept the year 2000. Xerox Corp. and Unisys Corp. (NYSE:UIS - news) have also filed suits against their insurers.

Another reason for the unexpected low number of lawsuits filed is the recently enacted Federal Year 2000 Readiness and Responsibility Act, which encourages alternative ways to resolve problems associated with the Y2K problem. It also gives defendants time to correct the problem and caps damages, according to the PricewaterhouseCoopers report.

But that law could result in even higher legal costs as plaintiffs argue that it doesn't apply to their situation, said attorney Dean Morehous Jr., chairman of intellectual property group of the San Francisco law firm of Thelen Reid & Priest.

``They could spend time arguing about the law before they even get to the merits of the case,'' he said.

Lawyers representing those who may bring suits also could be taking a wait-and-see approach, according to the PricewaterhouseCoopers report. Many courts have dismissed cases on the grounds that no problems have occurred...yet.

Although most of the suits filed so far, about 65 percent, have alleged some type of product defect, Upton said in his report that he expects the number of shareholder lawsuits stemming from Y2K problem to rise as the problems companies experience become public and begin to affect stock prices.

He also expects insurance claim disputes to rise. Milliman & Robertson estimate such disputes could cost between $15 billion to $35 billion.

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-- justme (justme@justme.net), August 24, 1999

Answers

The main, if not only, mitigating factor in Infomagic's devolutionary spiral would be ... No more damned law suits.

-- first we (killall@the.lawyers), August 24, 1999.

One of my regular golfing buddies, who works with a large insurance operation and who dismisses the whole y2k thing, claims the legal firms they do battle with on a daily basis are seriously staffing up for y2k litigation.

The sharks smell $$$$ and are circling in for the kill. Watch out for the feeding frenzy!

-- Hawthorne (99@00.com), August 24, 1999.


If he thinks Y2K is a 'nothing' then he (we) should have nothing to worry about with the lawsuits. :) I bet all the lawyers hope that Y2K will be bad because of the lawsuit potential, never thinking of the personal ramifications to themselves and society. Talk about a disconnect!

-- Jim (x@x.x), August 24, 1999.

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