NATIONAL CONFERENCE ON THE CONVERSION OF THE INFORMATION SYSTEMS TO THE
YEAR 2000
Rome, June 17 - 18, 1999
Ernesto Bettinelli
LEGAL IMPLICATIONS OF THE MILLENNIUM BUG
(Introduction to the Round Table)
In outlining the problem, the Millennium Bug is not uncommonly referred to as a "phenomenon". This word is easily--perhaps not incidentally--associated with other unpredictable, uncontrollable natural situations which see man entirely powerless. Then, man is abrubtly awaken to the crude reality of his own limits: he is no longer the master of nature and time. Within such a psychological frame, suggestion prevails, and a primordial "naive" attitude sets in. Such natural destructive phenomenon as earthquakes, hurricanes, volcanic eruptions and the like fill the stage with their uncontainable showdown which renders men, if only for a moment, all little and equal and tends to blurr away any legal implications and responsibilities.
We certainly could not pursue the culprits of earthquakes and volcanic eruptions, albeit we know that much of the damage to people and property is the result of shortsighted planning and of wicked environmental policies that are only human in nature.
The Millennium Bug is considered a "phenomenon" in that it is common to most of the world (at the least to the most technologically advanced areas) and it is widespread to an unmeasurable extent. It is, perhaps, the first meaningful manifestation of globality within its major expressions: markets, communications, transportation....: in short, it is anyone's emergency.
It is indeed its universal character to induce us to forget, at times, that the Millennium Bug is a "product" of man's work: a very poor product that will cause mishaps, hardship, poverty; "damage" to be ascribed entirely to subjective responsibilities, although certainly widespread in space and time.
Nonetheless, even the strict logic of the law which calls for anyone to respond of his harmful activities, must confront itself with the common and widspread, if not prevailing altogether, perception that the Millennium Bug is indeed a "chain accident" that goes beyond borders, business and services to such an extent that it makes it very difficult, if not impossible, a legal redde rationem. Legal actions are widely expected, lawsuites will likely crowd our Courts and even the reasonable path for legal settlements, dominated by the powerful Lawyers associations, will be stress tested against unprecedented obstacles.
Such an expected (not for all unwelcome) "Legal Bug" is furtherly nourished by the early dissociation of the guarantors of the economic and financial system: Insurance Companies, which have already been announcing that, in general, damage caused by poor assessment of such a certain event as "a" date change shall not be covered.... All the more if such a risk is originated by a "genetic flaw" of the damage causing device.
Who, then, is to pick up the bill? Who can afford to pay? How much could we and should we pay?
The answer to these questions, even within the harsh reality of our fiercely competitive global market society, should be attempted within the principles of solidarity and cooperation. If the Millennium Bug is a "phenomenon", if the sum of the countless act and omissions that have originated it could never be accounted for...., then the cost should be spread among all members of the global village: even among the final casualties that can hardly hope in any just compensation.
This "sharing" approach requires, however, that a procedure be defined for it is unthinkable that the principle of responsibility be abandoned as the calendar turns to the year 2000.
New parameters should be defined to evaluate cause-effect relation, behaviour of single subjects in the common battle against the Bug, proof of their actual will and ability to reduce damage.... .
Once again the earliest efforts to make of the Legal Bug a manageable issue come to us from Planet America where, at times, the strict language of the Law conjugates with mith, with the "need of mith". On October 19, 1998, the US Congress approved a "Good Samaritan" law (Year 2000 Information and Readiness Disclosure Act) to limit (making sustainable) liabilities of I.T. product and service manufacturers whenever their products are fully certified for year 2000 compliance. Furthermore: this law does away from the strict antitrust legislation, from the prohibition of protective action by public entities towards those operating in the "open" market; and the exchange of information on the year 2000 between public and private entities is encouraged even when it may be in contrast with "current" competition rules. Now it is the time for cooperation.
And in the background a possibility, if not a promise: the cost of the Millennium Bug would be tax deductible, at least in part; there could be State (States) financial support to prevent market shrinkage due to possible high failure rate among business unable to comply with ordinary rules. To this purpose, legislation is in the works to discourage or limit legal filing. A Bill is currently on the US Senate floor to pass, among other measures, a 90 days moratorium for all lawsuits (particularly class actions) to allow manufacturers and suppliers to fix or convert malfunctioning I.T. products; and, in any case, a ceiling for damage compensation could be established (not over $ 250,000).
The situation just described, however, is that of a "planet" in which the level of awareness and information upon the impact of the year 2000 Bug has been steadily growing for a long time, often reaching paroxysm.
The are other situations, other easy-going, lighthearted countries (like Italy) in which, on the contrary, awareness (let alone alarm) has developed too late, beyond time limit, without any justifiable reasons if not that of an endemic ignorance, of an unshakable tendency and temptation to underestimate the problems of technological progress, to separate technical and administrative (and political) responsibilities. Bottom line: to shy away from community problems whenever these seem hard to comprehend and are not readily usable for a gratifyting communication return.
As you know, the "Comitato anno-2000" was established only on December 14, 1998 (even due to actual institutional difficulties: a government crisis, in our pathological political system translates into a freeze of all current activities, even administrative and urgent ones); took office only on January 14, 1999, but started off immediately taking its job very seriously. Among its tasks is that of studying and assessing (even) the legal "implications...of the impact of the date change on I.T. system and procedures, manufacturer-supplier and user-consumer relations, contractual obbligations and related responsibilities (DPCM December 14, 1998, art. 1, lett. d). Such an activity is associated with the task of forwarding to the Government "proposals and initiatives....even legislative..", (even) to "safeguard the economic welfare of operators and consumers from negative effects" (loc. cit.: lett. c.).
In this perspective and in this situation of heavy delay, the Comitato has been dealing with the problem of legal liabilities connected with the failure to convert the I.T. systems to the year 2000 since its first meeting (January 21, 1999, when only 2% of the Italians were aware of the "phenomenon" of the Millennium Bug).
The Comitato perceived immediately that if such responsibilities (contractual, non-contractual, administrative, fiscal) were not to be "enphasized", within significant sectors of the Country's economic social and administrative structure (somewhat distant from the major international networks and yet vital) the conversion process would have yet to be started. This is why, in our discussions, our approach has focused on continuity of service (particularly those of social relevance) to the citizens; and on the search, thereby, of rules, even pedagogical in value that would help shake up sleeping administrators.
The Comitato's first, unanimous proposal to the government was that an "Executive Order be immediately issued" that would take in "a statement of responsibilities for all subjects that must comply with the I.T. conversion to the year 2000".
The proposal had no follow-up even though, informally, a group of jurists of the Comitato (including myself) has attempted to compile a text for the Government attention. Personally, I had proposed two alternative solutions (in fact, complementary) that would have represented a specification of principles that are already outlined in the Civil Code with regard to general responsibilities. Special provisions with regard to responsibilities for failure to convert the I.T. systems was all that was to be added.
The first proposal was formulated as follows: "Anyone who, due to his failure to properly complete the conversion of his I.T. systems for the date change to the year 2000 causes damages to third parties, must refund the damage under art. 2050 of the Civi Code".
The second, a "stronger" and less allusive one stated: "Anyone who, due to his failure to properly complete the conversion of his I.T. systems for the date change to the year 2000 causes damages to the security and safety of people, transportation and telecommunication service and the correct exercise of civic obbligations, must refund the damage.
Within this unlistened to, spontaneous panel of jurists, had even surfaced the idea that a fair premium (based on the american approach) be worked out that would weigh up responsibilities (and damage compensation) in the case of ascertained year 2000 compliance (by qualified "public and private certifying entities") of production process within wich a system would unexpectedly turn out to be non-compliant after 2000.
These ideas have remained a mere exercise. The legal problems of the Millennium Bug, the "Legal Bug", are still underestimated even though signs of legal activity are beginning to surface, even though important law firms are sharping their swords, even though professional associations are beginning to get worried.
It was therefore important that the National Conference on the Conversion of the I.T. System to the Year 2000 reserve a chapter for an in-depth review of these aspects by experts and operators. The approach of the participants will thus be practical. I hope that our jurist guests may, even in the future, cooperate with the Comitato within the spirit of that dimension of solidarity and civic participation that the Millennium Bug evokes, in the search of those appropriate solutions that the legislator, sooner or later, will have to come to terms with.