A coalition of business advocacy and local government groups have renewed calls for reform to a New York law that has been on the books since the late 1800s, but a government spokesperson indicates that it has little chance of success.
New York State Labor Law sections 240/241, known as the Scaffold Law, holds contractors and property owners engaged in construction, repair or demolition work 100% liable for gravity-related injuries despite any gross negligence on the part of injured workers, such as failure to use proper safety equipment, Insurance Journal has reported.
The coalition includes more than 75 member organizations including contractors and various trade groups. It wrote a Sept. 29 letter to New York Gov. Andrew Cuomo calling for removal of this absolute liability standard within the Scaffold Law.
The letter claims the legal revision would “annually free up millions of dollars in state and municipal budgets, save hundreds of millions in infrastructure costs, and release an estimated two hundred million a year in education budgets across the state” at a time when New York is already weathering economic fallout from the COVID-19 pandemic.
“New York is facing $20 billion of deficit, and here we have a fix that we can enact and it would save hundreds of millions of dollars for schools, save hundreds of millions of dollars for infrastructure, at precisely the time when we need that money,” Insurance Journal quoted Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York (LRANY), as saying.
However, a spokesperson for the New York State Division of the Budget, which assists the governor in preparing his executive budget proposal, did not seem optimistic about these latest calls for reform.
“We will review the letter, though this has been a nonstarter with the legislature,” the spokesperson told Insurance Journal in an email.
Stebbins said beyond the cost issue, a lack of available construction general liability insurance policies in New York has created challenges for small businesses in particular seeking this coverage.
“If you look over the past few years, it’s gotten demonstrably worse,” he said. “More and more insurers have left New York entirely. They will no longer write construction policies.”
“Nobody wants to write it, because it’s nearly impossible to insure, right?” he said. “If your client is 100% guilty all the time, it’s nearly impossible to cage the risk.”
With this in mind, the coalition’s letter urges Cuomo to add Scaffold Law reform to the 2021 executive budget and amend the absolute liability standard into what the coalition calls “a more equitable and modern comparative negligence standard.”
“We’re not looking to repeal the law,” Stebbins said. “We’re not looking to change any of the safety provisions in the law. We’re only looking to change the absolute liability portion of the law, which actually isn’t even written into the law. It’s how the courts have interpreted it. So that’s why I think we need a legislative fix…to provide clarity and to say that we’re going to impose liability the same way that every other state does.”