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1997-11-25 08:45:19


Comprehensive Report (Free) Now Available



A detailed report on y2k legal liability is now available for downloading. A summary has been posted. For corporate decision-makers, this document is basic reading. The authors are the Tarlo Lyons Law Firm.

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By the end of 1998 companies facing substantial contingent liabilities in the cost of averting the Y2K problem will have had their accounts qualified if they are unable to properly cost and detail their remedial plans. Directors will need to consider whether they could become personally liable for wrongful trading.

Some, no one knows how many, businesses and organisations affected by the Y2K problem:

•will be unable to continue to provide services they are contractually bound to provide, because the resources required become too expensive or unavailable, or the internal systems that support them cannot be made to work;

•will be unable to continue their normal activities because a legally required licence or permission is void or revoked as a result of the inability of the systems of that business to meet statutory or regulatory requirements (e.g. Banks, Financial sector companies, utility companies, transport and process operating companies). . . .

At the outset it must be recognised that Y2K is not solely an IT issue. Board members cannot simply hand over the project to their internal IT functions and hope to absolve themselves from responsibility. Y2K may have no impact on an organisation's IT system at all but still have a significant commercial impact, because of embedded systems in non-IT managed areas (see below).

Therefore the whole Y2K project must be managed as a commercial problem, requiring a multi-disciplinary approach at all levels; Board, Finance, IT, Legal and Third Party providers such as contractors & consultants.

Embedded systems -- safety critical equipment must be tested or taken out of service

The Y2K problem can affect anything with a chip in it, even devices or systems that do not have any obvious time-keeping features. If personal injury or death could result as a failure of a device containing an embedded system failing to function correctly as a result of century or other date changes, a decision must be made as to whether the device can be tested adequately and, if not, whether the risks involved mean that affected equipment must be taken out of service. . . .

Y2K affects the viability of all your suppliers and customers

Y2K is unique because it affects every organisation, business and government agency on the planet. More important to management, it potentially affects every customer and supplier of every business. If steps are not taken to eliminate exposure where there is a sole major supplier or customer of a particular product or service, inevitable interruption to service and possible business failure will follow. . . .

"It is already clear that the combined expertise of Europe's computing services industries will not be sufficient to address the problem; many new businesses will be left out in the cold as the new millennium approaches." From the Sunday Times of 3rd August 1997.


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