With the renewal of construction activity across New York, the Scaffold Law Reform Coalition (SLRC) and the New York State City Special Riggers Association (NYCSRA) have sent an urgent appeal to Governor Andrew Cuomo asking him to use his executive authority to issue a moratorium on the “absolute liability” provisions of what they describe as an “anachronistic and inequitable” Scaffold Law.
This statute, comprised of New York Labor Law sections 240/241 and commonly known as the Scaffold Law, holds contractors and property owners absolutely liable for any elevation-related injuries sustained by a worker, regardless of the worker’s gross negligence. The NYCSRA has been working with the Lawsuit Reform Alliance of NY to support Scaffold Law Reform.
“Some may say that a moratorium on absolute liability could hurt labor,” NYCRSA board member John Kalafatis said in a statement. “I say absolutely not – this helps labor!’
“Being a construction business owner for over 40 years where labor safety and well-being are my primary concern, there have been countless times where our firm’s capital expenses are tied up in insurance and legal costs instead of going where they belong – labor, safety, training and productivity.
“Without question just and equitable compensation for laborers that do get injured is warranted. However, because the absolute nature of the law incentivizes litigation, quite simply, too many allegations are not real. This moratorium would not negatively impact those actually injured. Insurance carriers would return to the New York marketplace where competition is virtually non-existent.
“The time is now to help our state and do the obvious.”
The letter, dated June 18, praises the governor and his team’s bold vision for the infrastructure and small business and reminds him that he has supported fixing the Law in public comments. It notes that his vigorous, forward-looking agenda is hindered by a law that the groups say make the state’s infrastructure projects the most expensive anywhere in the world and that New York is the only state in the nation to retain such a law.
While the state strives to recover from the COVID-19 pandemic and civil unrest, many businesses continue to file for bankruptcy, local governments may be unable to meet loan obligations, and the threat of “spiraling into a full-scale economic depression” still looms.
The coalition says it faults “special interest groups” for profiting from the Law’s inequities at the expense of the public.
“At this crucial time, where the electorate is acutely aware of the devastation COVID-19 has wrought upon our economy, we must cut down special interests in favor of the public interest. Now is the time to act.”
It calls for the moratorium as an opportunity to “help our state come back strong.”
The letter outlines what it says are facts supporting the repeal of the Scaffold Law.
- It costs more to build infrastructure projects in New York than anywhere else in the world. A mile of subway in NYC costs $3.1 billion versus $928 million in American cities like San Francisco, or $400 million in similarly dense cities like Tokyo.
- Insurance costs on the Second Avenue Subway ballooned from $93 million to $554 million, a rise blamed on the Scaffold Law.
- The Scaffold Law is estimated to have added $200 million to $400 million to the cost of the Mario Cuomo bridge.
- Liability costs on one joint New York/New Jersey bridge project are more than double on the New York side, strongly suggesting that state laws, not construction costs, are to blame for the cost increase.
- Across the state, the Scaffold Law is estimated to add over $785 million in annual costs to public projects.
- On a per project basis, the Scaffold Law is estimated to add an additional 7% to large-scale construction projects.
- The Scaffold Law hinders disaster relief, as evidenced by Habitat for Humanity and several other non-profits struggling to get insurance for rebuilding projects in the wake of Superstorm Sandy.
- Most national insurers will not write construction policies in New York and some of the few remaining insurers have stopped writing policies in the last few years.
- Insurance availability threatened the Owner-Controlled Insurance Program of the New York School Construction Authority (SCA) which provides insurance to over 800 M/WBE firms.
- The New York School Boards Association estimates that the Scaffold Law costs upstate schools $200 million annually.
- In 2013, the New York School Construction Authority was nearly unable to get insurance for its $2 billion capital program, despite an excellent safety record. The new insurance costs are $240 million for 2014, nearly triple that of the previous year.
- The SCA’s increased insurance costs are equivalent to 8-10 new schools over a 3- year period.
- The problematic absolute liability of the Scaffold Law is not written into the original law. Rather, it is the result of judicial interpretation, suggesting that this was not the original legislative intent.
- The number of Scaffold Law cases has increased 500% since 1990, despite a drop in overall construction injuries. A contributing factor to these claims is the compensation arrangement of plaintiff’s attorneys. Suspect and often frivolous claims would not be pursued but for the absolute liability provision of the law.
- The associations say NYC Assembly speaker Corey Johnson has called for repealing New York’s Scaffold Law in his plan to fix the MTA.
- Over half of the state’s county governments have passed resolutions supporting the reform or repeal of the state’s Scaffold Law.
- New York is the only remaining state that has a law like the Scaffold Law. Illinois repealed its Scaffold Law in 1995, and construction-related fatalities decreased by 26% over five years.