We have all heard about the Y2K problem or the Millennium Bug. The date change to January 1 2000 will cause many computers and electrical equipment to fail or to malfunction or operate incorrectly.

Many businesses have yet to take any action. The consequences of failing to address the problem could be disastrous. Businesses may find it difficult to function or hard to meet commitments on time because of the effect on IT systems. Businesses should take action - and take it now - to:

l make a Y2K action plan and allocate time and money to implement it;

l review all hardware and software;

l identify and check equipment containing embedded chips;

l seek confirmation from suppliers that their systems are millennium compliant;

l assess liability - both product liability and potential liability to third parties caused by failure to supply on time, should be considered;

l check insurance policies. Many insurers are imposing "millennium exclusions" and are refusing to insure for all the effects of the date change;

l check legal rights and obligations under all existing contracts. Ensure that maintenance and supply contracts provide for millennium-compliant upgrades or replacements;

l include provision in all new contracts that goods supplied will be compliant.

Richard Wilson is senior partner with Gordon Wright & Wright solicitors, based in the firm's Bradford office.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.