Y2K and Faith

Faithful Bankers

FEMA to the Rescue?

Post-Y2K: Then What?

Corrections or additions?


These articles were published in U.S. 1 Newspaper on September 29,

1999. All rights reserved.

Y2K Help Desk: Litigation

What’s up with Y2K and the law? So far the courts are

assuming a spectator’s role on the basis that there’s no proof yet

that Y2K is real, says Stanley Parker, a lawyer in the


headquarters of Buchanan Ingersoll. "Given our proximity to year

2000, my guess is most courts are going to adopt a wait and see


If September 9 (9-9-99) had turned out to be the Y2K dress rehearsal

that many had expected, there might have been more show-and-tell in

the courts. As it turned out, it was quiet day in the information

processing world. Even the pace of Y2K-related litigation has slowed

down, contrary to what lawyers had anticipated. On March 7, the


Inquirer reported that 50 lawsuits had been filed by parties that

jumped the gun on Y2K and were hauling companies into court for



"As of a few weeks ago it was still less than 100, and certainly

far less than many would have anticipated," says Parker, who


a BA from the University of Vermont, Class of 1989, and attended law

school at the University of Pittsburgh.

Of those cases, says Parker, there are two types of Y2K litigation.

"The first are claims by a purchaser of software suing a vendor

for the damages of the upgrade. Those cases by and large have either

settled or been dismissed on the basis that there’s not yet been an

injury," he says. "In many cases the vendors have agreed to

provide the upgrades and that makes sense."

"The second type of law suit that we’re seeing is where companies

such as Xerox have sued their insurance companies to try and recapture

the cost of remediation," says Parker. Xerox spent millions to

ensure that its computer systems were compliant and took its insurance

company to court to cover the cost of preparation using the Sue and

Labor Clause, a maritime clause that is more than a century old. The

clause holds the insurance company liable for whatever is lost in

the effort to save a sinking ship, so to speak. "They haven’t

been utilized much but it’s a creative way for companies to recapture

the money they’ve had to spend to mitigate their damages," says

Parker. "The argument is that if a company is taking steps to

mitigate their Y2K losses, the insurance company should have to pay

for it."

The winners and losers it seems will be determined by sheer luck,

which way the wind blows on January 1. "If Y2K turns out to be

a big so what," says Parker, "then I think the insurance


may have the better argument that you took precautions against


that there was no need to take precautions against. If the hurricane

hits us and people who didn’t take precautions have computer failures,

then the argument of the companies who did take steps to mitigate

is certainly strengthened."

That’s no reason to totally ignore your insurance policy, however,

says Parker. "Every insurance policy has to be interpreted on

its own," he says. Businesses should:

Review the insurance policy. "There are policies out

there that may cover for Y2K but the more important thing is that

there are policies out there where Y2K and computer failure has been

excluded," he says. "The gray area is going to be where


companies don’t specifically exclude it, but a business incurs losses.

Whether or not they’ll be able to recover depends on the language

of the policy, and how the courts interpret as more and more claims

get filed.

Set up a protocol on how to act. Instituting a Y2K


program illustrates a "good faith" effort to prevent serious

damages that can be used to advantage in court.

That brings us to one of the most disconcerting elements of

Y2K. Surveys indicate that a vast majority of small businesses in

the U.S. have no remediation or contingency plan in place. That


to insurance companies and their clients betting on the same outcome

— two parties driving blind, potentially on a crash course.

— Melinda Sherwood

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Y2K and Faith

Some people may plan to stash money under a mattress

or buy cases of bottled water for safe measure, but many members of

the community, particularly elderly and disabled, are unprepared for

the potential fall-out of Y2K, both materially and psychologically.

Grace Polhemus, president of Technology New Jersey, and Rich

Miller, technology columnist of the Times of Trenton, are joining

together to help the Interfaith Caregivers of Greater Trenton, an

outreach ministry to seniors and people with disabilities, learn how

to help members of their congregation prepare for Y2K. "If


goes wrong, where do they go first: they look for the church,"

says Polhemus. "If the church doesn’t understand, then there’s

going to be a panic. The churches and synagogues can play a serious

role, and they can help with the shelters, to help the sick and the

homebound in case they have no power."

Polhemus and Miller will give a free seminar on Y2K preparation for

the 300 volunteers of the Caregivers on Tuesday, October 12, at 6:45

p.m. at the Pilgrim Presbyterian Church at 1599 South Broad Street

in Hamilton. Call 609-419-4444. Says Polhemus: "We want to look

at it as a hope and faith issue, not a fear and panic issue."

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Faithful Bankers

Banks, especially, want people to keep the faith.


months ago a banking organization issued a sample homily that it hoped

would be used by the clergy to reassure their congregations. In


proactive move, Summit Bank has announced it will open for business

on New Year’s Day, Saturday, January 1. "We want our customers

to have confidence that on and after January 1, they will be able

to access their accounts and handle their banking business," says

T. Joseph Semrod, chief executive officer. Branches located

in stores will also be open regularly scheduled hours on Sunday,


2. (Sovereign Bank has also announced plans to open certain key


on New Year’s Day.)

Summit also has speakers on Y2K. Call Chandra Johnson at


Top Of Page
FEMA to the Rescue?

The Federal Emergency Management Agency (FEMA) seems

like the modern-day equivalent of the Depression’s WPA. Y2K has not

escaped FEMA’s cautionary eye, as evidenced by this recent statement:

"Personal preparedness for transition to the Year 2000 is no


from ways you prepare for the usual storm. Have batteries for


and radios, a three-day supply of water and non-perishable goods,

and at least a half tank of gas. Having recent copies of records and

statements on file at home makes good sense at any time."

For those with Y2K anxieties, FEMA offers a website


plus 24-hour taped information on Y2K at 888-USA-4-Y2K (888-872-4925).

The President’s Council on Year 2000 Conversion has operators standing

by weekdays from 9 a.m. to 8 p.m. to answer questions. Call


As some suggest, the best use of the Internet may simply be as a


Early Warning system. Some ‘net surfers are planning to check out

Asian sites early on December 31, when they are hitting the midnight

hour. If sites in Great Britain are still humming at 7 p.m. Eastern

time (midnight there), that will be more good news. But if we lose

Great Britain, then it’s time to head for the ATM machine — and

the hills.

For gas and water information, call the Board of Public Utilities

at 800-624-0241 or go to http://www.njin.net/njbpu/index/html.

For banking information, call 609-292-3420. To check with Social



Top Of Page
Post-Y2K: Then What?

The threat of Y2K has lead to unprecedented growth within the


industry, but where will the thousands of Y2K problem- solvers go

on January 2? Grace Polhemus, president of Technology New


suspects that many of these companies will simply transition to the

next trendy area in the consulting business. "What I’m already

seeing is that the companies are moving and shifting into


she says. "Y2K was a nice way for them to pick up business and

establish a relationship and move into different areas."

E-Commerce is obviously a hot area for those with technology know-how,

but Polhemus says another emerging industry is knowledge management.

"That’s what you see with the big groups, the


and KPMGs," says Polhemus, whose Technology New Jersey works


the Knowledge Management Consortium International, a world-wide


that already has 17,000 members. "They geared up for Y2K and


and now they’re gearing up for knowledge management. They’re coming

out with new methodologies and tools and services every time I turn

around." As long as there’s new technology developed, there’s

never a shortage of jobs for people to fix problems.

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