McDaniel Senate Banking, Housing and Urban Affairs Committee Subcommittee on Financial Services and Technology Hearing on Year 2000 Liability and Disclosure. This summary, and my comments to the Subcommittee, will briefly discuss three aspects of legal liability that businesses face as a result of the Year 2000 or Y2K computer problem. The potential for business liability resulting from Year 2000 computer problems is real and significant. As a result, the failure or slow-down of a single link in a production and distribution chain can generate multiple levels of harm and liability.
Possible scenarios are easy to imagine.
The retailer, in turn, may be left unable to meet its prior supply obligations. Each party in this chain of events may have a legal claim against its predecessor in the chain. There is also no compelling reason to alter existing law to deny any of these parties' compensation for the harm they suffer. In almost all cases, the party who fails to perform without excuse would and should be liable for that breach. Retail businesses, including the financial services industry, risk the greatest disruption from Year 2000 computer problems due to the number of potential individuals who would be affected.