Businesses Urged to Consider Mediating Y2K Legal Problems

ARLINGTON, Va. — With some analysts predicting that Y2K willspawn
billions of dollars in lawsuits because of service and product
failures, businesses need alternatives to litigation, says Marc
Pearl of the Information Technology Association of America, a
nonprofit trade association of information technology

‘Mediation needs to be encouraged, not litigation,’ said Pearl,
general counsel and senior vice president of government affairs for
the association.

Alternative dispute resolution is a good strategy to address Y2K
disputes between businesses, Pearl said. The association, along
with a national alternative dispute resolution provider,
JAMS/ENDDISPUTE, have developed a web site for organizations
interesting in establishing a business strategy to deal with Y2K
disputes before any problems actually occur.

The free information on the web site,, is
designed to assist companies to build alternative dispute
resolution clauses into their current and future contracts with
vendors, suppliers, customers, risk managers and others. If a
dispute arises, it also helps businesses access ADR services.

‘We are not looking at this in a postlitigation mentality, but
we’re more concerned with how businesses can maintain their
relationships,’ said Pearl. ‘Most businesses, like marriages, don’t
enter a relationship because they want to end up in court.’ But
sometimes, like a marriage, businesses need to enter into a kind of
pre-nuptial agreement, particularly now with the uncertainty of Y2K
failures, he said.

According to Pearl, businesses should first try to resolve any
potential Y2K problems without any legal intervention, even by
employing mediators.

If this fails, alternative dispute resolution is the next
logical step, rather than litigation. ‘It is not in the best
interest to businesses or the customers for a public lawsuit to
occur,’ Pearl said. ‘Mediation keep costs down, and it doesn’t push
parties into opposite corners like a boxing match.’

While alternative dispute resolution is no guarantee that the
dispute will not end up in court, Pearl said, about 80 percent of
businesses that try alternative dispute resolution settle the
dispute privately and amicably.

However, if all else fails, the businesses may have to take the
lawsuit route. Pearl points out that the association does not
advocate alternative dispute resolution with consumer problems with
Y2K, only business-to-business relationships.

While alternative dispute resolution is a good way to deal with
the potential burden of Y2K lawsuits, Pearl admits that there is
resistance. ‘ADR to lawyers is a lot like holistic medicine is to
medical doctors. There’s a cultural impediment to go to ADR.’

Contact: Marc Pearl, general counsel and senior vice
president of government affairs, The Information Technology
Association of America, Arlington, Va., 703-522-5505; web site:

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