Outdated Scaffold Law Needs Reform

The truth about New York’s Scaffold Law is irrefutable and Cornell University agrees. A recent study done by Cornell University uncovers the ugly truth about New York’s antiquated Section 240 of the Labor Law, more commonly known as the Scaffold Law. The law was created in 1885 and has remained unchanged over the years in spite of greatly improved materials, methods, safety procedures and equipment. The law was put into effect in the days when contractors used wooden scaffolding to build high rise buildings in New York City. Today no other state in the country has such a law. In fact, the Cornell study suggests there is no other law like this on this planet.

The last state in the United States to have such a law was Illinois and they abolished it in 1995. So what were the results when Illinois put an end to the law? In a study done by the Bureau of Labor Statistics in Illinois from 1995 to 2006 found that construction fatalities fell from 1.7 per 100,000 to -2 per 100,000 and construction injuries fell from 2.7 per 100 workers to 0.7 per 100 workers. That same study found that construction jobs on an annual basis increased from roughly 220,000 annually to a high of almost 280,000 jobs.

The Illinois law is now history and the Bureau of Labor Statistics has it well documented. Now let’s look to the future and a study done by Cornell Universities Rockefeller Institute of Government. It was co-written by Michael Hattery, PhD, Director of Local Government Studies and R. Richard Geddes, PhD, Director, Cornell Program in Public Infrastructure Policy. The study debunks the myths surrounding the law and points to the facts of its effects on New York’s economy. The study finds the Scaffold Law costs taxpayers $785 million annually. In 2014 the New York City School Construction Authorities insurance premiums soared to $240 million, up by $140 million from 2013. The Scaffold Law is estimated to add $200-400 million in additional costs to the construction of the new Tappan Zee Bridge. Local governments pay higher costs for capital projects, whether the work is done directly or through private contractors. For example, liability costs on joint New York-New Jersey bridge projects are more than double on the New York side. More than half of the top 30 highest settlements resulted from Scaffold Law claims, and of those, 25 percent were against public entities. One of those lawsuits was settled by the Union School District in Uniondale, N.Y. for just shy of $15 million. The highest settlement arising from the Scaffold Law in 2012 was almost $100 million. The study also finds that the Scaffold Law adds as much as $10,000 to the cost of building a new home.

For years now trial attorneys and insurance companies have been pointing their fingers at each other claiming the other guy is the one running up insurance premiums. On one hand the number of Scaffold Law cases has increased by 500 percent since 1990 even though the rate of injury has decreased. On the other hand New York’s general liability insurance costs are the highest in the nation for construction, and the cost is directly related to the Scaffold Law. The number of carriers that write general liability policies for construction in New York has been steadily declining and there now only two or three carriers who will underwrite in the state. One of our members, who has been in business for 36 years was recently told of a 44-percent insurance premium increase for 2014 and told by their broker he was not sure he could find coverage for them in 2015. I know what you are thinking; they must be a reckless operation. In fact, they have not had an accident in their 36-year history. I have one question for the trial lawyers, if the construction liability insurance market in New York is so lucrative for the insurance companies why are they fleeing the state?

We don’t believe injured employees should not be compensated for their injuries. We do believe they should be held to a comparative negligence like every other law in the state of New York. When trying a case under the Scaffold Law you do get a trial by jury. However, the only reason for the jury is to determine the amount of the award. The contractor is absolutely liable. He or she is not even allowed to enter into evidence any of the circumstances surrounding the injury. For example, under the Scaffold Law, if an employee falls and gets hurt the facts of how the accident happened are irrelevant. It doesn’t matter that the employer has trained the employee to use fall protection equipment and supplied him or her with that equipment to do the job. The employee can have a three-martini lunch, go back to work, make a conscious decision to climb to the roof without his safety equipment, that he or she decided to leave in the car, then falls off. The contractor is absolutely liable for that accident and can’t even bring up the circumstances under which the accident happened.

In 1885 New Yorkers were still using steamboats and buggy whips. A lot has changed since then. It’s time to change this antiquated law and put 27,000 people back to work and $785 million dollars back into the economy. Kudos to our local legislators Senator Young and Assemblyman Goodell for supporting existing reform legislation and to Governor Cuomo as well who publicly stated he wasn’t opposed to reforming the law.

The study done by Cornell was released recently and can be viewed at: www.nycji.org/images/documents/2014-02-study-The-Costs-of-Labor-Law-240-on-New-York-Economy-and-Public-Infrastructure.pdf.

Brad Walters is the executive director of the Southern Tier Builders Association Inc. in Falconer.