New York construction and business groups are continuing the fight to repeal or amend the state”™s Scaffold Law despite the increasing likelihood they are fighting a losing battle.
The law, put in place to protect workers from unsafe conditions at work sites, was passed in 1885, when modern construction techniques meant taller buildings ”“ and as a result, an increasing danger of high-altitude accidents. Opponents say the law increases the cost of any project due to a provision that holds construction companies and property owners 100 percent liable for “gravity-related” injuries at a worksite.
Bill Mooney, president of the business advocacy group the Westchester County Association, said reforming the law could create up to 86,000 jobs and increase tax revenues by $1.04 billion. “That”™s something we can all get behind,” he said.
WCA studies showed that 16 of the 30 largest lawsuit settlements in the state in 2012 were from Scaffold Law suits, Mooney said.
Another regional business advocacy group, The Business Council of Westchester, said its studies showed the law inflated local government construction projects by $785 million. John Ravitz, executive vice president of the council, said the law as it stands could add anywhere between $200 million to $400 million to the ongoing construction of the new Tappan Zee Bridge.
New York is the last state that has the absolute liability provision, Ravitz said, and the opposition shouldn”™t be viewed as being anti-safety.
“It”™s affecting so many different industries,” Ravitz said. “We”™re seeing the damage being done and it has nothing to do with protecting worker safety.”
Municipalities, school districts and taxpayers are being burdened by the law, he said, because of the inflated costs of construction and large injury settlements based on the absolute liability provision. Many public entities cannot afford the high cost of construction and so often push back capital projects until emergencies dictate the need to build, Ravitz said.
“For us here in the lower Hudson Valley, we want to make sure our legislators are focused on this,” he said.
Gary La Barbera, president of the Building & Construction Trades Council of Greater New York, in an op-ed in the New York Daily News said reform was needed ”“ but for the insurance industry. “Businesses involved in construction suffer from a Stockholm syndrome of sorts where they believe insurers holding them hostage with absurdly high premiums are their allies,” he wrote. “Instead of taking their fight to the insurers, these businesses have joined them in a campaign against the Scaffold Law which talks about everything but the fundamentals that drive insurance costs.”
The Scaffold Safety Coalition, a newly formed group of union members and supporters of the law, said changing the law would remove the need for contractors and property owners to adequately provide safety measures for workers. The group said ballooning insurance rates are part of a nationwide trend, not a direct result of the law. It also disputes the notion that the Scaffold Law places liability on contractors or property owners when an employee is grossly negligent, such as if a worker were drunk.
Assemblyman Francisco Moya, D-Queens, proposed legislation this year to hold insurance companies more accountable. The law which, like Scaffold Law reform, is unlikely to make its way to the governor”™s desk, would require insurance companies to provide specific data to substantiate their construction liability rates.
The American Insurance Association, a trade group that represents roughly 300 insurers in the country, said in a February statement that legislation was an attempt to “divert attention from the real problem.” The group said construction liability costs in New York, specifically in the city, are the highest in the county and dictate high premiums.
“The construction liability insurance market in New York remains in a real crisis,” Gary Henning, Northeast region vice president for the association, said. “This market will not improve until the absolute liability standard is modified.” In the statement, the group said 11 states actually prohibit workplace suits and require any damages be collected through workers”™ compensation.
There is more than a month until the end of this year”™s state legislative session in mid-June, but any reform of the scaffolding law already appears dead in the water.
Gov. Andrew Cuomo told Crain”™s New York Business the law wouldn”™t be changed in 2014. Cuomo, a Democrat running for re-election this year, told the newspaper he had a pro-business agenda, but if one were to ask businesses to prioritize their problems, taxes would trump other reforms.
“Now they would say scaffold, but they would say, scaffold what? No. 8? No. 12,” Cuomo said, according to Crain”™s.
After Cuomo”™s comments to Crain”™s, a number of state industry leaders and business organizations, including the business council, sent a letter April 29 to the governor, reaffirming that the law is a priority for New York business leaders.
“We find it hard to conceive or accept that all these constituencies, interests and priorities that call for Scaffold Law reform are outweighed by the political influence of personal injury trial lawyers and we are confident that working together we can achieve what would be a much-needed, long-overdue historic reform,” the letter said.
Matthew Pepe, executive director of the Building Contractors Association of Westchester & Mid-Hudson Region Inc., in a May 5 guest column in the Westchester County Business Journal, called the law a “business killer.” He said the governor had already given up on reforming the law and noted Cuomo”™s statement that New York was “open for business.”
“I really want to believe Gov. Cuomo,” he said, “but something just doesn”™t ring true about the new New York message.”
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