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The Millennium Accord – Media Backgrounder

The potential impact of Y2K disputes may be quite significant.

There has been much publicity on the nature of the year 2000 ("Y2K" or "millennium-bug") problem and the financial costs and technical challenges that our society faces in dealing with it. However, there has been very little public dialogue, to date, about how we will sort out the claims that will inevitably arise from unresolved problems.

There is the potential for litigation costs arising from Y2K problems in Canada to be quite significant. While there are no estimates quantifying such costs in Canada, there have been several estimates in the United States. Independent information technology consulting firms estimate legal fees and other litigation costs with respect to Y2K disputes in the United States will range from about $500 billion U.S to $1.3 trillion U.S. The GartnerGroup estimates legal costs in the United States to be $1.3 trillion. This amount is in addition to its original estimate of from $300 million to $600 million for "a complete fix" to the Y2K problem.

However, the fact is that no one really knows how significant the legal fallout will be. The United States Senate, in its assessment of Y2K readiness, found that it "cannot predict what will occur on January 1, 2000". In any event, these estimates of potential legal costs suggest that it is prudent to plan for a scenario where there will be a significant number of Y2K claims.

It is likely that Y2K disputes will cross borders because of the fact that business today is interdependent and global in scope.

We live in an interdependent world. A Y2K problem in one company may have a domino effect around the world. As a result, Y2K disputes will, in many cases, involve people and organizations across national borders.

The Millennium Accord assists parties with international Y2K disputes through the involvement of six leading ADR organizations in Canada, Great Britain, USA, Hong Kong, Singapore, and Australia and New Zealand. The organizations will provide assistance in selecting and appointing a mediator, arranging mediation sessions, and providing the applicable mediation procedures for use by the parties.

The Canadian Foundation for Dispute Resolution plans a national program for mediators and lawyers to provide technical training and a comprehensive overview of Y2K legal issues during the early part of next year. It also has an interim Y2K roster of mediators and arbitrators with the capability to handle Y2K disputes using ADR until such time as its national Y2K training programs are complete.

The Millennium Accord is an international Y2K initiative that offers alternatives to litigation, with potential benefits that include less publicity and savings in time, cost, and business disruption.

The Millennium Accord consists of certain principles, procedures, a contract clause, and a Declaration of Support that commits signatories to use of a flexible, two-step, fast-track procedure involving negotiation and mediation. Millennium Accord signatories make a public statement of commitment to attempt to negotiate over a 21-day period, and if unsuccessful, to then mediate their Y2K disputes

Signatories still preserve their rights to ultimately use the courts. However, in many cases, litigation takes too long and costs too much – and has an uncertain outcome. Some alternatives to litigation – more commonly known as "alternative dispute resolution" or "ADR" – are, in most cases, a quicker, better, and more cost-effective way to resolve these Y2K disputes.

In fact, United States President Clinton signed a bill on July 20, 1999 that encourages parties with Y2K disputes to resolve problems using ADR prior to using the courts. The new law requires a prospective plaintiff with a Y2K claim to send a written notice to each prospective defendant before commencing litigation. Prospective defendants then have thirty days to provide responses to the notice and advise whether they are willing to consider using ADR to resolve the dispute.

There are significant benefits from using mediation and other ADR processes. Recent studies and court-annexed ADR pilot projects demonstrate that cases resolved using ADR settle, or otherwise resolve themselves more quickly, at a lower cost and with greater party satisfaction, than by going to court. Success rates for settlements frequently range from about 60% to more than 80% – often at a much earlier time. And, it is less likely that there will be disruptions in important business relationships

The Millennium Accord already has the support of hundred of corporations and organizations around the world.

The Canadian Foundation for Dispute Resolution begins its public awareness campaign for the Millennium Accord on December 8, 1999. It sought declarations of support from some leading organizations in Canada prior to the official launch of its campaign. Canadian Pacific Limited, PanCanadian Petroleum, and Imperial Oil became sponsors of the Millennium Accord and were among the first signatories in Canada.

Signatories to December 8, 1999 include Advance Planning & Communication Inc., BXL Energy Ltd., Canadian Corporate Counsel Association, Canadian National, Canadian Pacific Limited, Duncan McCachen Code, Enbridge Inc., Federation Insurance Company of Canada, Field Atkinson Perraton, Fraser Milner, Honda Canada Inc., Howard Mackie, Imperial Oil Limited, Insurance Council of Canada, Information Technology Association of Canada (ITAC), Ladner Downs, PanCanadian Petroleum Limited, Peace Hills General Insurance Company, PricewaterhouseCoopers, Stitt Feld Handy Houston ADR Ltd., Sun Microsystems of Canada Inc., The Calgary Airport Authority, The Calgary Chamber of Commerce, The Westaim Corporation, TransCanada Pipelines Limited, Trimac Corporation, and Elizabeth Parr-Johnston, President and Vice Chancellor of the University of New Brunswick.

In other parts of the world, over 530 corporations and organizations are signatories of the Millennium Accord. They include 3M, AC Nielson, British Airways, British American Tobacco, Cable & Wireless, Nortel, Compaq Computers, Ericsson, Nestle, and Texaco. A similar Y2K initiative involving the use of alternative dispute resolution has more than two hundred signatories and includes a comparable number of subsidiary companies.

The United States Senate and the United Nations recognize the value of the Millennium Accord as a way to avoid Y2K litigation by using alternative dispute resolution.

The United States Senate Special Committee on the Year 2000 Technology Problem, made reference to the Millennium Accord in its September 22, 1999 report, Investigating the Year 2000 Problem: The 100 Day Report, as a way to deal with Y2K problems to "avoid the morass of Y2K litigation by using alternative dispute resolution."

And the United Nations convened a special meeting of Year 2000 coordinators from 168 countries in June of this year to learn how the Millennium Accord can deal with Y2K disputes cost-effectively.

The Canadian Foundation for Dispute Resolution encourages leaders of corporations and other organizations to demonstrate support for the Millennium Accord by becoming a signatory to the Declaration of Support.

It certainly makes business sense to try to resolve Y2K disputes in a way that preserves existing relationships; saves time, effort and money; and avoids going to court. Signing the Millennium Accord's Declaration of Support sends an important signal to other business organizations that ADR should be the first step in resolving these disputes and that litigation should be the last resort.

The Millennium Accord Advisory Board includes senior executives from leading Canadian corporations.

The Millennium Accord Advisory Board includes:

  • David O'Brien, Chairman, President & CEO, Canadian Pacific Limited;
  • George Harvey, President, Business Services, AT&T Canada;
  • Peggy Mulligan, Executive Vice-President, Bank of Nova Scotia;
  • Gaylen Duncan, President & CEO, Information Technology Association of Canada; and
  • Paul Curley, President, Advance Planning & Communications Inc.

The Canadian Foundation for Dispute Resolution is a non-profit alliance of over sixty business corporations and professional organizations in Canada working together to promote creative and cost-effective resolution of business disputes.

The objectives of the Canadian Foundation for Dispute Resolution are to assist organizations in:

  • better understanding the value of alternative dispute resolution and how to use it effectively,
  • finding appropriately qualified third-party neutrals for the parties to a dispute,
  • making the decision to use ADR, and
  • making arrangements for ADR proceedings.

Quotable Quotes

The Canadian Foundation for Dispute Resolution has permission for use of the following quotations in media articles.

Eugene Meehan,
President, Canadian Bar Association

"The Titanic didn't see the iceberg coming, but we have all seen Y2K coming for some time now. The legal profession in Canada is ready, with the appropriate dispute resolution mechanisms for appropriate cases. We can all benefit from fast and speedy resolution to legal issues and problems which Y2K will inevitably produce. The captain of the Titanic would be happy."

The CBA is a national association representing over 35,000 lawyers, judges, notaries, law teachers, and law students from across Canada.

Gaylen Duncan,
President & CEO, Information Technology Association of Canada

“Millennium-bug problems absolutely will produce litigation because the stakes are very high and organizations will look for a scapegoat to this immense problem.”

The Information Technology Association of Canada (ITAC) is an information technology industry association representing over 1,300 firms together with partner organizations, in the computing and telecommunications sectors in Canada.

William Hartnett,
Chairman & President,
Canadian Foundation for Dispute Resolution

“The first day of the new millennium will turn out to be either a footnote or a footprint in history. While no one really knows how significant the Y2K problems will be, it makes sense to try to resolve whatever problems that do arise in a way that preserves existing relationships, saves management resources, and avoids going to court.”

“Whether or not the millennium-bug ultimately opens the floodgates of litigation, the Millennium Accord is a cost-effective contingency plan for the resolution of Y2K disputes. The Canadian Foundation for Dispute Resolution is encouraging business organizations in Canada to sign the Millennium Accord to demonstrate support for using ADR as a first resort in resolving Y2K disputes.”

Mr. Hartnett is the Assistant General Counsel, Resources for Imperial Oil Limited in Calgary.

Simon Potter,
Chairman, Millennium Accord Committee,
Canadian Foundation for Dispute Resolution

“The Millennium Accord allows a party to suggest alternatives to litigation in a particular dispute while minimizing the likelihood that the other party will believe that the suggestion arose because of a perception of weakness in the case. It helps you get over an important initial hurdle to a quick settlement — it let's you make the first move, so that negotiations can begin before litigation takes on a life of its own.”

Mr. Potter is a senior partner at the law firm of Ogilvy Renault in Montreal.

Dan Carroll,
Vice-Chairman, Millennium Accord Committee
Canadian Foundation for Dispute Resolution

"Participating in the Millennium Accord makes good business sense because it can result in quicker, better, and less costly resolutions of Y2K disputes."

Mr. Carroll is a partner in the law firm Field Atkinson Perraton in Edmonton.

Further information about the Millennium Accord and the Canadian Foundation for Dispute Resolution is available on the Foundation’s website at www.cfdr.org or by contacting Judy Ballantyne, Executive Director at (416) 603-9444. The international Millennium Accord website is at www.accord2000.com.

The Canadian Foundation for Dispute Resolution

Email: foundation@cfdr.org

Website: www.cfdr.org


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