US Y2K Shield Law a Success?

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US Y2K shield law a success?
Tuesday, 26th September


Post mortems take a long time in IT, so it's unsurprising that the official report on the US Y2K post mortem has still not yet been released. However, the so-called US Shield Law which limited the liability of US IT suppliers is being acclaimed a success, at least by some senators.

The Shield Law is the popular name given in the USA to the Year 2000 Information And Readiness Disclosure Act; the popular name in the UK was the Bill Gates Wealth Protection Act. It was drafted because of alarmist predictions that legal costs of up to $1 trillion could otherwise cripple the US IT industry. Essentially, the Act decreed that a company could not be held liable for Y2K compliance statements made unless the plaintiff could prove that the statement was "false, inaccurate or misleading or was made with bad faith, fraud or recklessness". At the same time, a further Act, the Y2K Act S.96, limited damages awardable in any action to $300,000: about the size of the Microsoft coffee bill.

The Shield Act was controversial from its inception and claims for its success are no exception. President Clinton threatened to veto early versions and eventually allowed it through only on the grounds that it could help to filter out frivolous claims and would encourage firms to concentrate on correcting any problems. Associated Press, which has apparently obtained a pre-release copy of the General Accounting Office (GAO) Y2K post mortem, reports that the Act was invoked just 18 times and that a congressional critic deemed this a "fitting postscript" to the Y2K issue.

Others were less impressed. AP reports Senator Patrick Leahy, who voted against the Act, as saying that the GAO study confirmed that "in the courts, the Y2K bill was mostly used by big companies to delay or sidetrack relief to consumers". In any case, the jury would appear to be still out on the issue. Of the 18 invocations, 10 cases appear to be still unresolved, with the others settled out of court or dismissed.

The UK can congratulate itself on refusing to reverse the usual burden of proof as the US did in order to offer special protection to a specific industry but that's where the congratulations end. The official UK post mortem is already out, though you could have been excused for missing it, such was level of publicity with which it was issued. It is unsurprisingly self-congratulatory in tone, focusing on the lessons which should be learned. These are almost all in the area of best practice in IT management, proposing that in future companies (and Government Departments) should have at least some idea of what IT systems they have, try their hands at change management and also, perhaps, test software before using it.

In fact, the UK Y2K report pretty well duplicates the almost simultaneously released study of why Government IT projects have such a poor success rate. It similarly ignores the best practice prescriptions drafted over the past decade in its own IT Infrastructure Library (ITIL). ITIL was commissioned by the CCTA from 1990 onwards but the Government still doesn't seem to understand it's got it. At any rate, there seems to be remarkably little pressure on Government Departments to make use of it, despite the fact that it covers virtually all the recommendations made in the recent reports.

Coincidentally, publication of the UK report occurred in the same month that the London Stock Exchange closed down for a day because of computer failures at the end of the trading year. Despite official denials, this had all the hallmarks of failure of days-per-year calculations (i.e. Y2K bugs) and has been confirmed as such by unofficial sources. But that is officially still being investigated. What chance we'll ever learn the truth, officially? Well, if we wanted to be really bitchy we could point out that the person with prime responsibility for the Government's Action 2000 programme went on to become chairman of the London Stock Exchange.

-- Jim McAteer (jim_mcateer@hotmail.com), September 27, 2000

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