The Millennium Accord Media
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
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
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
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
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
- George Harvey, President, Business Services, AT&T
- Peggy Mulligan, Executive Vice-President, Bank of Nova
- Gaylen Duncan, President & CEO, Information Technology
Association of Canada; and
- Paul Curley, President, Advance Planning &
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.
The Canadian Foundation for Dispute Resolution has
permission for use of the following quotations in media articles.
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.
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.
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.
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.
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
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 Foundations 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
112 Adelaide Street East, Toronto, Ontario M5C 1K9
Telephone: (416) 603-9444
12075, 237 Fourth Avenue SW, Calgary, Alberta T2P 0H6