Adviser warns of 'time-bomb'

Alison Laferla reports

ONE of the UK's leading IT legal advisers has warned firms their computer systems may fail if they do not adapt their software to handle dates with the year 2000 in them.

Robert Bond, head of the IT and media law department at city firm Hobson Audley Hopkins & Wood, has called on law firms not to ignore the problem, which will affect businesses across the board.

A recent survey of top corporate IT users by Computer Weekly revealed that, while nearly 60 per cent consider the issue of major significance, only 12 per cent are actually implementing change.

The year 2000 time-bomb stems from a practice in many software packages that abbreviates dates to the last two numbers. This means that at the start of the next century, unless the software is reprogrammed, the date will be read as 1 January 1900. As a result, software used for jobs like payroll administration and compiling statistical data may become 'chronologically confused' and crash.

Bond, who is also chairman of the International Chambers of Commerce UK Electronic Commerce Working Group, said the implications of this problem were vast. The firm is already advising clients on contract renegotiation over the matter. It is preparing to take legal proceedings should satisfactory settlements not be forthcoming in cases of fundamental breaches of software licence agreements.

Litigation specialists in the firm envisage two ways litigation could arise: in advance, when a supplier refuses to rectify the problem, and after the event, when a user discovers he cannot use the software and so incurs loss.

"The worst thing to do is to sit and do nothing," said Bond. He urged firms to examine their software licence and maintenance agreements to establish who is responsible for rectifying possible year 2000 problems.

"There may well be litigation in advance and I am sure that by the year 2000 at least one company from every sector of industry will have gone bust because of this," he said.