Y2K

*  2 Digits Used Instead of 4 - "00" Instead of "2000"
*  "00" Will Be Read in Existing Code Processing as "1900" Instead of "2000" or Will Create Error in Processing
*  Incorrect Date Will Impact all Date-Related Programming Examples: Age and Product-Life Calculations, Interest Payments, Transportation Scheduling, Accounting Systems

How Extensive is the Problem?

*  Mainframe and Minicomputers
*  Work Stations and Microcomputers
*  Special Difficulty:  Microchip-Based "Embedded Systems"

Consequences of Failures . . .

*  Inability to Deliver Acceptable Goods or Appropriate Services in a Timely Manner
*  Malfunction of Systems Causing Physical Injury or Damage to Property
*  Health Hazard
*  Significant Litigation Expense or Loss
*  Loss of Clients

Examples of Potential Claims

*  Breach of Contract
*  Breach of Warranty
*  Fraud
*  Misrepresentation
*  Fraudulent Inducement
*  Negligence
*  Strict Liability

No One is Immune

*  Enormous Interdependency and Interconnectivity Across Companies, Industries and Governments
*  True Y2K Testing Almost Impossible
*  Effects Have Potential of Being Significant and Adverse

Solutions to the Y2K Problem

*  No "Silver Bullet" or Easy Solution
*  Different Approaches
*  Enterprise-Wide Project

Y2K Readiness Project

*  Involve Senior Management
*  Y2K Awareness Campaign
*  Inventory
*  Assessment
*  Conversion
*  Validation/ Testing
*  Implementation
*  Monitoring

"Year 2000 Information and Readiness Disclosure Act"

*  Public Law 105-271; Enacted on 10/19/1998
*  Intended to Promote Voluntary Sharing of Y2K-Related Information among Private Entities and Governmental Units by Attempting to Reduce or Remove Concerns over Litigation Exposure

What is a "Year 2000 Statement"?

*  Any Communication, in any Form or Medium, Concerning:
     -  Assessment, Projection, or Estimate Concerning Y2K Processing Capabilities
     -  Plans, Objectives, or Timetables for Implementing or Verifying Y2K Processing Capabilities
     -  Testing Information or Operational Problems or Solutions Related to Y2K Processing
     -  Otherwise Directly or Indirectly Relating to Y2K Processing Capabilities

What is a "Year 2000 Readiness Disclosure"?

*  A "Year 2000 Statement":
     -  Clearly Identified on its Face as a Year 2000 Readiness Disclosure
     -  In Writing or Inscribed in some other Tangible Medium or Stored in an Electronic or other Medium and Retrievable in Perceivable Form
     -  Concerning the Year 2000 Processing of the Entity Making the Disclosure or the Products or Services Offered by that Entity

Protections

*  Y2K Statements - No Liability Unless:
     -  With Respect to that Year 2000 Statement
     -  Clear and Convincing Evidence
     -  Materiality
     -  Actual Knowledge;  Made with Intent to Deceive or Mislead; or with a Reckless Disregard as to Accuracy
*  Y2K Readiness Disclosures
     -  Evidence Exclusion
     -  Exceptions

The Botton Line

*  The Act does not Change Private Contractual Rights
*  The Act:
     -  Provides Substantive Legal Protection in Certain Instances
     -  Is Complex and in some Cases Ambiguous
     -  Requires Carefull Analysis to take Advantage of its Provisions
     -  Is not a Substitute for an Aggressive Y2K Program

Coordinate and Update

*  Coordinate all External Communications (Speak with One Voice)
*  Update Standard Response to Ensure Accuracy

Y2K Readiness Project

*  Develop Client Advisory
     -  Assess Firm's Obligations to its Clients
     -  Limit Firm's Liability Exposure by Shifting Onus on Clients to Mitigate Damages
     -  Alert Past and Current Clients to the Y2K Problem
     -  "But I'll Get Sued!" - You Would Have Been Anyway
*  Ensure Y2K Compliance in Technology Products and Services
*  Attend to Technology Products Developed and Distributed by the Firm
*  Ensure Internal Y2K Compliance of Vendors, Suppliers, and Business Partners

Legal Audit of External Business Obligations

*  Review Existing Contracts
     -  Licenses
     -  Maintenance Agreements
     -  Warranties
     -  Purchase Agreements
*  Review Sales and Promotional Material

Legal Audit of Prospective Business Relationships

*  Conduct a Legal Review of Prospective Contractual Arrangements
     -  Owners
     -  Consultants
     -  Contractors
     -  Vendors
     -  Suppliers
     -  Business Partners, Etc.

Record Retention and Documentation

*  Ensure and Maintain Proper Documentation and Records

Summary

*  If You Don't Have Expertise - Get It!
*  There is a Y2K Problem - You are not Immune!
     -  If Not You - Perhaps a Supplier?  Business Partner?  Client?
*  Plan NOW, Act NOW!!