43.5306 Limitation of liability.

Cite as [A.S.C.A. § 43.5306]

(a) Determination of commercially reasonable efforts by claimant and respondent. All arbitration awards and all judgments in a court proceeding which award damages on a claim arising out of a Y-2K error shall state whether the claimant and the respondent engaged in commercially reasonable efforts to avoid the impact of Y-2K errors.

(b) The trier of fact shall make an independent determination that the actions taken by a claimant or respondent constitute commercially reasonable efforts, based on the totality of the circumstances, and notwithstanding that the party’s efforts failed to avoid all Y-2K errors affecting its computer-based systems. In making the determination, the trier of fact shall examine the party’s efforts as a whole, and shall take into consideration the sophistication of any resources available to the party. The burden of proof shall be on the party claiming that it engaged in commercially reasonable efforts, and the standard of proof shall be a preponderance of the evidence.

(c) A claimant or respondent shall be presumed to have undertaken commercially reasonable efforts if it has, at minimum:

(1) Implemented the remediation steps; and

(2) Complied with any data formats established by a government regulation, a governing body (such as the National Automated Clearing House Association for certain financial transactions) or reasonably requested by the other party where the parties exchange electronic information which was impacted by the alleged Y-2K error.

(d) Effect of finding. Except for claims where physical injury was directly and proximately caused by a Y-2K error, upon a finding that either:

(1) A claimant did not engage in commercially reasonable efforts; or

(2) The respondent engaged in commercially reasonable efforts, the respondent’s liability will be limited to recovery of the claimant’s actual out-of-pocket damages directly caused by the Y-2K error, and no consequential damages, such as loss of business opportunities or loss of profits, or other special damages shall be awarded under any theory of recovery.

(e) Allocation of liability based on exercise of commercially reasonable efforts. The amount awarded to any claimant will be reduced to the extent that the claimant’s failure to engage in commercially reasonable efforts contributed in whole or part to the damages sustained. Where two or more respondents are found liable for the claimant’s damages, the proportion of liability assessed against each respondent will be proportionately adjusted based on the extent to which it engaged in commercially reasonable efforts.

History: 1999 PL 26-15.