Protect your city from Y2K lawsuits.

• Author: Folch-Freiermuth, Tina
• Position: Year 2000 computer transition problem

This article is reprinted with permission from the March 1998 issue of Minnesota Cities magazine, a monthly publication of the League of Minnesota Cities. For more information, please call 612/281-1200.

Are you aware of the possible liability exposures involved with the year 2000 (Y2K) problem? (The problem where computer technologies may produce the wrong information or fail altogether when they encounter a year 2000 date.) One possible consequence of failure to fix the Y2K problem can be loss of life, health, and safety, and damage to personal and business property if emergency notification systems fail. Experts are predicting that if local governments are unsuccessful in achieving 100 percent compliance, they may be sued for damages by citizens, individually or in class-action suits, or by companies within their geographic boundaries.

Negligence Liability. From a liability standpoint, there potentially could be an onslaught of negligence-type claims. The concern is that in court it will be found that a "reasonable person" would have addressed the Y2K issue and made significant attempts to correct the problem before it occurred. With this in mind, it is vital to start creating a paper trail. Organizations trying to defend themselves against Y2K litigation must be able to demonstrate that they took reasonable and prudent steps to bring themselves to full compliance. Local government efforts should be documented in a written trail that addresses Y2K awareness, assessment, and resolution. This record includes meeting minutes, actions, and discussions with vendors. The record should answer questions such as: How did your city become aware of the problem? What steps did you take to assess the problem's level of impact on your city's services and community? What steps did you take to know where your city was in the overall picture of compliance and exposure? What priorities did you establish and how did you achieve them? Which vendors and solutions did you choose?

Violating License and Maintenance Agreements. Cities are going to run the risk of violating contracts with the original vendors that supplied software, hardware, or firmware. Violations of contracts with vendors can arise if your city makes copies of software to run test simulations, or contracts with third-party vendors to fix system problems. Municipalities should develop an inventory of hardware, software, and firmware. The city attorney should review the license and long-term...