Law Office Computing
November 1999
Winton Woods
The Year 2000 Computer Glitch: The ADR Option
We now have a pretty good picture of the kinds of problems that are likely to occur during the first six to ten months of the year 2000. Instead of massive disruption and failures of critical systems such as electrical power, airlines or banking, most experts now believe we are likely to experience many smaller and much more individual kinds of problems. Knowledgeable people predict that there will be substantial problems in many foreign countries that will have negative impact upon companies in the United States that depend upon suppliers in Asia and South America. Those problems pose special difficulties peculiar to international business. Of more immediate concern, however, is the fact that 25 to 35 percent of the small businesses in the United States have done very little to prepare themselves for possible Y2K disruptions. There will undoubtedly be many problems that arise in that not in substantial portion of the economy. And, it is likely that those problems will engender many lawsuits over the course of the next year.
Year 2000 computer failures present an ideal environment for the use of ADR to achieve consensual resolution of complex matters at low cost. Most of the disputes that can be predicted today will involve companies and people who have had long-standing, mutually beneficial commercial relationships. The preservation of those relationships is an important consideration that cannot be ignored. The kind of litigation that will follow Y2K failure will certainly be highly complex, highly contested, multi-jurisdictional and expensive. The initial legal disputes, including issues of constitutional law, may take years to resolve. In the aftermath will be broken businesses and ruined companies, not because of the potential for damages but because of the clear potential for unending litigation over issues about where the case will be tried, what law will be applied and other sundry matters that do not relate to the merits. The cost of that litigation, litigation about procedures instead of actual fault, will consume many companies and individuals.
Congress and state legislatures around the country have anticipated that litigation with legislation. The federal Y2K Act creates a 90-day window in which potential litigants will have an opportunity to fix what is wrong and arrive at a fair settlement of their dispute. Of major concern, however, is the fact that potential conflicts between state and federal law provide fertile ground for extended litigation over many preliminary issues. In addition, the technical nature of Y2K problems insures that there will be complex matters of liability. There are also potential trade secret issues and other kinds of problems relating to confidentiality that are implicit in these cases. And, in many respects, this litigation will be done in an environment where there is virtually no legal precedent. There are special new procedures that are established by both the federal Y2K Act and the similar Arizona legislation enacted last year, and they pose some especially complex problems. All in all, it has been suggested that the legislative responses may raise more problems than they solve and create what has been called by some the "The Lawyers Full Employment of Act of 2000". If you have a client who has the misfortune to suffer a loss relating to the Y2K glitch you need to pay very careful attention to the special rules of pleading and procedure established by both the federal and state acts. Among other things, those procedures contemplate and encourage the use of alternative dispute resolution in lieu of litigation.
ADR processes are designed to avoid that unnecessary expenditure of money by allowing the participants in a Y2K dispute to fashion their own remedy outside the law--to fashion a remedy that will allow the commercial relationship to continue and flourish. The savings occasioned by the use of Alternative Dispute Resolution in lieu of litigation will be considerable. In order to provide a vehicle for the achievement of mediated settlement of Y2K disputes Bruce Meyerson and I have teamed up with the American Arbitration Association to provide Y2K mediation services in the Southwest. We have set up a website at www.adr-for-y2k.com so you can reach us. ADR mediation can provide a confidential and inexpensive solution to your clients Y2K dispute. Remember, in litigation the court controls the timing and management of the dispute but mediation lets the parties create their own methods and procedures. Because the agreement that reached is consensual rather than imposed by law it can be carefully tailored to the needs of the parties. With help from an experienced Y2K mediation team business partners can resolve their Year 2000 disputes using the same tools that they use to run their business: evaluation, negotiation and agreement.
In a recent article the North Carolina Bar Association Year 2000 Task Force noted the fact that Y2K problems present unique professional opportunities:
"The multi-faceted business challenge that Y2K presents is an opportunity for lawyers to join with clients in preventing business disruptions. Help clients understand that neither panic nor complacency is in order -- a systematic, structured effort that is attentive to the business and legal risks is called for. This is an opportunity for lawyers to serve clients as true counselors, building client awareness of the breadth of the Y2K challenge and making proactive suggestions for reducing business and liability risk."
Use of Alternative Dispute Resolution tools is an integral part of that challenge. You can reach The American Arbitration Association at 602-234-0950, Bruce Meyerson at 602-257-5200 and Winton Woods at 520-322-6900. Look for State Bar CLE programs in both Tucson and Phoenix in December that will discuss the new legislation and the ADR option.