Legislation to curb year-2000 lawsuits is advancing through Congress but faces stiff opposition from plaintiffs' attorneys and consumer groups.

Two pieces of legislation have emerged from the pack. On Tuesday the full Senate began debating a compromise bill sponsored by Arizona Republican John McCain. Today the House Judiciary Committee will mark up a bill sponsored by Rep. Thomas M. Davis 3d, R-Va.

Both bills would limit punitive damages, give potential defendants the chance to "cure" problems they caused, and encourage litigants to resolve their differences outside the courtroom.

Bank trade groups, however, are pushing lawmakers to adopt even tougher measures included only in the House bill, such as a provision that would make it harder for plaintiffs' attorneys to certify year-2000 class actions, said Gordon Glaza, regulatory counsel at the American Bankers Association.

But Capitol Hill sources and others say enactment is far from certain.

Republican support for the bills is solid, and there are some Democratic supporters, especially among West Coast lawmakers whose constituencies include software designers and other high-tech firms susceptible to litigation.

But most Democrats have been more sympathetic to complaints from plaintiffs' attorneys and consumer groups, who allege the bills are a Trojan horse for broader efforts to curtail product liability suits. Democratic alternatives are expected to be introduced in both chambers soon.

Year-2000 liability legislation is considered a particularly tough sell in the Senate, which typically is less friendly to business interests and which provides the minority with tools designed to stall progress. On Tuesday, for example, South Carolina Democrat Ernest F. Hollings attempted, unsuccessfully, to delay Sen. McCain's bill via filibuster.

Even if Congress approves a bill acceptable to the business community, there is a good chance President Clinton would veto it. So far, however, the White House has maintained a low profile on the issue, and as ABA lobbyist Edward L. Yingling noted, the President has received significant political and financial support from high-tech advocates of the legislation.

Though banks could end up both suing and being sued for year-2000 errors, bank trade groups are throwing their weight behind the anti- liability legislation. The ABA, America's Community Bankers, the Independent Community Bankers of America, and the Financial Services Roundtable all are part of a multi-industry coalition pushing for protection against lawsuits.

"We support both bills, because they both take a pretty reasonable approach to reducing frivolous litigation," said Peter Hong, legislative specialist at the ACB.

But Karen Shaw Petrou, the president of the consulting firm ISD/Shaw Inc., remains pessimistic about the bills' chances. "I think it's long odds, only because there's still so much opposition to it and because time is always on the side of those opposed to a bill," she said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.