Upcoming Mallesons seminarsThe Commonwealth Year 2000 Information Disclosure Act 1999 ('the Act') commenced operation on 27 February 1999. The Act represents the Government's response to calls for it to replicate recent legislative initiatives in the United States, in the US Good Samaritan Act
What the Act does
The Act aims to encourage the voluntary disclosure and exchange of information about Year 2000 computer problems and remediation efforts. It does this by protecting the maker of a 'Year 2000 disclosure statement' from civil liability for the making and content of that statement - but only in certain limited circumstances. A Year 2000 disclosure statement can be either an original statement or a republished statement.
An original Year 2000 disclosure statement will only be protected if:
- it is made between 27 February 1999 and 30 June 2001
- it relates solely to specified aspects of 'Year 2000 processing'
- it states that it is a Year 2000 disclosure statement for the purposes of the Act
- it contains words indicating that the maker of the statement may be protected under the Act
- it identifies the person who authorised the statement, and
- it is made in writing or by certain electronic means.
A republished Year 2000 disclosure statement will only be protected if:
- it consists of the republication, retransmission, reproduction, recital or reading aloud of the whole of an original Year 2000 disclosure statement
- it is made between 27 February 1999 and June 2001, and
- it is made orally, in writing or by certain electronic means.
The Act affords protection from civil action for things arising out of or incidental to the making of the statement and also provides that a protected statement is inadmissible in evidence against a person in proceedings to which they are a party.
Limits on the protection provided by the Act
Not every statement that meets the tests outlined above will receive protection, or protection may be only partial. A statement is not protected if it is made:
- with knowledge that it is false or misleading
- with recklessness as to whether it is false or misleading
- with the sole or dominant purpose of inducing consumers generally to acquire goods or services, in an action to which a consumer is a party relating to those goods or services acquired by the consumer
- with the sole or dominant purpose of inducing a particular consumer to acquire goods or services, in an action to which that consumer is a party relating to those goods or services acquired by the consumer
- to another person in connection with the making of a contract where that other person is a party in an action relating to that contract
- as required by law or under a contract.
Even if protected in some civil proceedings, a statement will not be protected in other proceedings which are:
- for a restraining injunction or for declaratory relief
- regulatory or enforcement proceedings under Commonwealth, State or Territory law (except, in certain situations, under section 45 of the Trade Practices Act 1974)
- for infringement of certain intellectual property rights.
What the Act does not do
- apply retrospectively - it only extends protection to statements made on or after 27 February 1999
- apply to original statements made orally
- provide any protection against criminal action
- amend contracts - the making of a Year 2000 disclosure statement will not change contractual obligations unless the parties to the contract separately agree that it should.
Traps in the Act
A statement that would otherwise be fully protected can easily lose that protection if:
- it covers matters other than 'Year 2000 processing', which is defined narrowly, or specified aspects related to Year 2000 processing
- it is a republished statement that does not include all of the original statement on which it is based
- it does not contain all the mandatory content
- when a civil action is commenced, a necessary explanatory statement is not given to the party initiating the action to indicate that reliance on the Act will be pleaded.
It is clear that there will be a need for great care in the making of statements for which protection is sought, and in seeking to rely on that protection once proceedings are commenced.
Conclusion
Despite the introduction of the Act, there is still a need to take care when making Year 2000 statements. Generally, companies that make Year 2000 statements with reasonable grounds and after due enquiry, are less likely to attract lawsuits based on their statements than those companies that make Year 2000 statements without reasonable grounds and without making due enquiries. Ideally, statements should:
- be primarily focussed on the process and plans
- be cautious about the result or predictions
- always be based on reasonable grounds
- be updated regularly (eg websites), and
- note the necessary reliance on infrastructure and other third parties.
Scott Bouvier
Senior Associate
Tel (61 2) 9296 2472
scott.bouvier@msj.com.au