By Annemarie Mitchell
There has been a lot of buzz lately about the
New York State Scaffold Law. It is an archaic law
on the books that predates workers compensation,
liability insurance and OSHA, and its intent was to
protect workers from unsafe working conditions
while building high rises.
Many other states also had similar laws in place
back then, however New York is the only state that
still has the law on the books. There is no dispute
from anyone that employees should be provided
with a safe work environment and that every precaution
be taken to ensure the safety and health
of the employee. It is also agreed that should an
accident happen, and an employee is injured on
the job that they be provided with medical attention
and compensation for their injury.
Workers Compensation and OSHA are now there for those very reasons. The trouble with the Scaffold Law is that it holds the contractor and property owner 100 percent liable. It does not matter if the plaintive is intoxicated, ignoring safety rules or equipment, or even breaking the law when the injury occurred. According to the Court of Appeals, the Scaffold Law “imposes liability even on contractors and [property] owners who had nothing to do with the plaintiff’s accident.” This affects every tax payer and property owner in New York state.
Because the law allows virtually no defense, it has become one of the most frequent sources of litigation in the state of New York. Sixteen of the top 30 publicly disclosed lawsuit settlements in New York in 2012 were due to the Scaffold Law. Of those cases, fully 25 percent of those were against public entities, including the largest Scaffold Law lawsuit of 2012, which was against a school.
In addition to the cost of your tax dollars on massive legal settlements, the Scaffold Law raises the cost of insurance for our public entities – insurance that you as a taxpayer pay for. The School Construction Authority of New York estimates that this law costs them $75 million annually – enough to build two or three new schools every year, or repair 75 schools, or hire a thousand teachers.
The Scaffold Law also imposes outrageous and unnecessary costs on our public infrastructure. It is estimated that the Scaffold Law will add at least $100 million to the cost of the Tappan Zee Bridge reconstruction alone, and the cost to public infrastructure statewide is likely near $1 billion a year. Think about what else we could do with an additional billion dollars annually. Think about the all the roads and bridges we could rebuild. Think about all the jobs that we would add to our economy with a billion dollars in additional infrastructure investment.
Not only does this increase the cost to the public, it also increases the cost to small businesses like mine. Because of the absolute liability imposed by the Scaffold Law, general liability insurance for a contracting company like mine can be ten times higher than it would be in any other state. And those costs are shared by everybody. The money I spend on insurance, is money that cannot be spent on jobs and investment into my business. Liability insurance premiums are based on payroll, not a flat fee like auto insurance, so it also affects what we can pay our employees; any raise we give an employee costs us more for insurance.
And that is if I can get insurance at all. Despite a strong safety record, only a handful of insurers will write construction insurance in New York. Most of the national carriers have left the market, leaving only a handful of carriers who are forced to charge unbelievable premiums to cover the costs of a potential lawsuit.
And that’s one of the major problems with the Scaffold Law. Since it is an absolute liability standard, a company’s safety record is irrelevant, the actions (or even intoxication) of the plaintiff are irrelevant, training programs are irrelevant. None of that is admissible. Essentially, the only thing the court does is decide how much you will pay.
You may be asking yourself why this law still exists, and who would defend a law that costs so much and does so little. Well, the personal injury trial lawyers love the Scaffold Law. They collect millions in contingency fees while having to do little to no work proving their case. And the trial lawyers plow much of their Scaffold Law profits back into the coffers of Albany politicians.
And many of the politicians themselves work for law firms who make millions on Scaffold Law cases. Google “Scaffold Law” and the first law firm to come up in the search is the firm that employs Assembly Speaker Sheldon Silver. Over the years, despite several bills, multiple editorials and a massive public outcry, Silver has never once brought Scaffold Law reform to a vote in the Assembly.
Despite the political obstacles, we believe that we can pass sensible reform to New York’s most broken law. The business community has joined with mayors, school boards, affordable housing advocates, taxpayer groups, minority and women owned business coalitions to call on the governor and Legislature to reform this law.
This law is costing everybody and only benefiting one group: the New York State Trial Lawyers. We cannot let this powerful special interest continue to harm our businesses, municipalities and schools.
The Scaffold Law is one of the greatest symbols of New York’s unfriendliness to business. If Gov. Cuomo is serious about making our state “open for business” he needs to shut down the Scaffold Law once and for all.
Annemarie Mitchell is CEO and president of Legacy Timber Frames Inc. and vice president Capital Region Builders and Remodelers Association.
Photo Courtesy of Legacy Timber Frames Inc.