Y2K BILL UNDERSCORES LEGAL SYSTEM'S WOES

Last week saw congressional passage of legislation to limit the potential liability of companies for fallout arising out of any so-called Y2K computer problem. The bill is sponsored by U.S. Sen. John McCain, and its passage in a form President Clinton says he will sign -- even if only reluctantly -- is a major achievement. A House vote of 404-24 followed Senate passage by an 81-18 vote.

In its way, passage of this bill is certainly a welcome event, but the fact that it is necessary is a sad commentary on the American civil justice system at the close of the 20th century.

Not to put too fine a point on it, that legal system, together with the very rule of law itself, is threatened by a rapacious minority among lawyers -- the very people who are supposed to be its custodians. We speak of the new predatory class known as the personal-injury lawyers of the trial bar. A subgroup actually specializes in targeting companies for what became known as "strike suits" for allowing their stock prices to fall. From such a ludicrous theory of liability, it is a short step to these Y2K suits.

These predatory lawyers have read, along with all of us, of the impending computer problem arising out of the inability of some computer programs properly handle the change to the year 2000. Instead of regarding this as a problem to be worked through, these lawyers see it as an opportunity to prey on companies that fail to plan sufficiently to avert it. In other words, another gigantic potential payday for the trial lawyers.

One of the business community's top priorities this year, McCain's bill would give companies 90 days to fix Y2K problems before lawsuits could be filed. It also encourages mediation as an alternative to litigation.

The bill also seeks to limit frivolous lawsuits by capping punitive damages for small businesses, narrowing the sphere of class-action lawsuits and ensuring that, in most cases, defendants will be held liable only for the share of damages they cause.

Overwhelming passage of the bill forced President Clinton to choose between the high-tech community, which badly wanted the bill, and his party's most loyal contributors: the trial lawyers. Says Senate minority leader Tom Daschle, D-South Dakota, "He'll sign it. I don't think he will sign it with enthusiasm."

Said U.S. Chamber of Commerce president Thomas Donohue, "It will serve to minimize the potential explosion in litigation that would discourage Y2K compliance efforts, hurt American consumers and weaken our economic growth." Donohue is right. A big congratulations to everyone who played a role in passing this much-needed bill.