Will New York’s Scaffold Law finally get a facelift?

Posted by Noff Colabella on Mon, Jun 29, 2015 @ 04:10 PM

new-york-scaffold-lawAsk anyone in the New York construction business what keeps them up at night, and the Scaffold Law is likely to come up. Enacted in 1885 at a time when skyscrapers were going up in New York City, the law was passed to protect construction workers from the growing hazards of working at greater heights. The law generally holds property owners, developers, and contractors wholly liable when a worker falls from height, even if the injured worker is 99 percent to blame for the accident, such as ignoring safety regulations or being intoxicated on the job.

The battle lines were drawn years ago
The heated battle over the Scaffold Law has been raging for years, with both sides digging in: 

  • Supporters of the law include a powerful lobby of unions, workers’ advocates, and trial lawyers who claim that the law is necessary to ensure workers’ safety in dangerous construction jobs, especially those working for less scrupulous contractors that might cut corners to save money. They say it’s imperative that construction businesses be held accountable for jobsite safety.
  • Opponents of the law include construction companies, property owners, insurers, and others who have repeatedly tried to get the law modified or repealed. They say the law is antiquated and unfair, it hampers development, and it places an unreasonable burden on construction businesses that no other business in any other state has to bear. 

The consequences
New York is the only state in the country with this law, and it’s had devastating consequences for the construction industry and the state’s economy. The law has resulted in huge settlements that have cost taxpayers millions, driven up insurance premiums, and caused many small contractors to bail out of the business altogether. As a result, New York is at or near the bottom of desirable places in the country to do business.

The insurance conundrum
Because of the Scaffold Law, the cost of insuring construction projects in New York can be as much as 10 times higher than in other states. Many insurance carriers in the state simply refuse to handle construction insurance, and there are only a handful left that are willing to write policies for construction companies.

new-york-scaffold-lawNew hope
So far, all attempts at reform have failed. Even Governor Cuomo temporarily threw in the towel last year, conceding that the labor unions and trial lawyers were too powerful in Albany to get any meaningful reform passed.

But that could all be changing soon.

There are currently two bills to reform the Scaffold Law on the table, one in the state Assembly that has yet to gain much traction, and a bill in the Senate sponsored by Sen. Patrick Gallivan (R-59th District) aimed at instituting a comparative negligence standard. And a recent development that’s giving supporters of reform some hope is the arrest of former Assembly Speaker Sheldon Silver, a powerful opponent of reform with ties to a personal injury law firm that profits from Scaffold Law cases.

Those in the New York construction industry say it’s long past time that the absolute liability standard of the Scaffold Law be replaced with the more equitable comparative fault standard, just like in every other state and every other aspect of the U.S. civil justice system. With settlements ranging from $3 million to $15 million in recent years, reform can’t come soon enough.

For the best insurance solution for your construction business in this challenging environment, see the New York construction insurance experts at BNC. We have the experience and expertise to help you protect your bottom line.