Businesses trying to cope with the Year 2000 problem have long been frustrated by the difficulties in obtaining compliance information from vendors or exchanging such information with key business partners. In order to address that concern and promote cooperative Year 2000 remediation efforts, Congress has just enacted the Year 2000 Information and Readiness Disclosure Act. Companies should seize the opportunities afforded by the Act to seek more meaningful disclosures from vendors and provide customers and business partners the information they need to prepare for the century date change challenge.
Generally, the Act applies to any "Year 2000 Statements" made after the date of enactment of the Act through July 14, 2001. Such statements are defined to include a broad range of statements about a company's Year 2000 assessments, plans, tests and reviews or the republication of such statements by other companies regarding their Year 2000 readiness efforts. Covered statements may not form the basis for a legal action unless the claimant establishes (in addition to all other requisite elements of the applicable cause of action) by clear and convincing evidence that the statement was made with (1) actual knowledge that it was false, inaccurate, or misleading, or (2) with the intent to deceive, or (3) with a reckless disregard as to the accuracy of the statement.
Similar protections are afforded those who republish the Year 2000 readiness statements of third parties provided, inter alia, that (1) the person republishing such statements has no actual knowledge that the statement was false, inaccurate or misleading or made with an intent to deceive or mislead, or (2) the republisher states it has not verified the information or identifies the source of the statement being republished.
In addition, the Act provides certain evidentiary protections such that statements fitting the definition of a "Year 2000 Readiness Disclosure" are not (with a few exceptions) admissible in a civil action for certain purposes. These provisions may also be applied to statements made before the enactment of the legislation provided that the statements sought to be protected fit certain criteria and are designated as protected under the Act by the maker giving a particular form of statutory notice of the designation within 45 days of the enactment of the Act.
This legislation offers significant benefits to companies engaged in Year 2000 readiness disclosures and information exchanges, and it is important that businesses take advantage of its provisions. The 45 day grace period for designating certain pre-enactment statements is particularly important, and businesses should immediately consider whether the benefits to be gained by such designation outweigh the burden of the notice process.
The Thelen Year 2000 Team
Three years ago Thelen was the first law firm in the country to recognize the complex legal risks posed by the Year 2000 Problem. At that time Thelen's Technology Law Practice Group formed an interdisciplinary "Year 2000 Team" of attorneys, drawn from all of the firm's specialty practice areas, dedicated to assisting businesses in recognizing and minimizing the many legal risks posed by the Year 2000 Problem. Today, Thelen's Year 2000 Team, comprised of over 30 attorneys, is the nation's leading provider of legal services to businesses grappling with Year 2000 legal issues.
Year 2000 Education Efforts: In addition to hands-on experience providing these services, members of Thelen's Year 2000 Team have been featured as keynote speakers at approximately 100 conferences and seminars in every major metropolitan area in the U.S. and many overseas; have published dozens of articles on the subject; and have received continuous recognition in the national media for our leadership role in addressing the Year 2000 Problem. We also provide in-house Year 2000 seminars designed for our clients and their customers.
Tort & Class Action Reform Legislation: Thelen Year 2000 Team members have testified before state and federal legislative committees and participated in efforts to provide legal reform on Year 2000-related issues. Specifically, Thelen has cautioned against ill-considered reform efforts that would actually increase litigation. Instead, Thelen has argued for limitations on class actions that are being filed to "hold-up" vendors who are honestly trying to bring solutions to the marketplace and for strengthening UCC provisions that protect vendors from unlimited consequential damage claims.
The Thelen Reid Report is published as an information service to clients and friends. Please recognize that the information is general in nature and does not constitute legal advice.