REPORT BY THE CONSTRUCTION LAW COMMITTEE OF THE NEW YORK COUNTY LAWYERS’ ASSOCIATION

Statement on the Issuance of Committee Reports Regarding New York’s Scaffold Law

 

The New York County Lawyers’ Association (NYCLA) announces the issuance of two reports by its committees relating to New York’s Scaffold Law. On November 6, 2014, two reports were issued by NYCLA committees: (i) the Construction Law Committee issued a report titled, “New York’s Scaffold Law and Pending Reforms”, and (ii) the Tort Law Section, with the support of the Civil Rights and Liberties Committee, issued a report titled, “The Scaffold Law and Legislative Proposals that Would Shift the Strict Burden for Workplace Safety from Owners and Contractors to the Injured Employee.” The views expressed in these reports are strictly those of the respective committees, have not been approved by the New York County Lawyers’ Association Board of Directors, and do not necessarily represent the views of the Association.

 

The New York County Lawyers’ Association (www.nycla.org) was founded in 1908 as the first major bar association in the country that admitted members without regard to race, ethnicity, religion, gender or sexual identity. Since its inception, it has pioneered some of the most far-reaching and tangible reforms in American jurisprudence and has continuously played an active role in legal developments and public policy.

 

REPORT BY THE CONSTRUCTION LAW COMMITTEE OF THE NEW YORK COUNTY LAWYERS’ ASSOCIATION

 

New York’s Scaffold Law and Pending Reforms

 

The views expressed in this report are strictly those of the Construction Law Committee, have not been approved by the New York County Lawyers’ Association Board of Directors, and do not necessarily represent the views of the Association.

• Introduction and Summary

 

Some describe New York Labor Law §§ 240 and 241-a, known as the “Scaffold Law,” as a law that deals with work-related construction injuries involving a fall from a height or being struck by a falling object. However, due to judicial decisions that have expanded its scope, the Scaffold Law now effectively imposes absolute vicarious liability for work-related injuries tangentially involving the effects of gravity, including horizontal movement, if the injuries are sustained on or near a construction site or during an enumerated activity, such as “repairing.”

The current, prevailing interpretations of the Scaffold Law deviate uniquely from New York State’s public policy and codified laws requiring application of a comparative negligence standard in awarding damages in personal injury suits. Even though New York’s CPLR §1411 imposes a comparative negligence standard in any action to recover damages for personal injury, and contains no exemption for the Scaffold Law, New York’s courts have incorrectly construed the Scaffold Law to attribute absolute liability for 100% of a claimant’s damages to an owner, construction manager, and general contractor without regard to the fault of a claimant. Pending New York State Senate Bill S.111 and Assembly Bill A.3104 would explicitly allow an owner, construction manager, or general contractor to defend itself on the issue of damages. The Construction Law Committee (the “Committee”) of the New York County Lawyers’ Association by this report supports these proposed revisions of the Scaffold Law to include a comparative negligence standard, consistent with New York State’s public policy.

The text of the Scaffold Law is silent on the nature of employers’ liability; it does not reference the words “absolute” or “strict” liability. The absence of such language comports with New York’s default interpretation of pure comparative negligence. Yet, the courts have effectively added provisions to the Scaffold Law that are not in the statutory text in derogation of New York’s public policy as evidenced by, inter alia, various sections of the CPLR and the New York General Obligations Law, and as reported by the Judicial Conference.

The Court of Appeals has interpreted the Scaffold Law “as imposing absolute liability for a breach which has proximately caused an injury. Negligence, if any, of the injured worker is of no consequence.” (emphasis added). This broad interpretation may have had appeal (had it been derived contemporaneously) in the context of commonplace construction practices at the inception, and in connection with revisions, of the Scaffold Law, when labor was grossly underpaid and considered readily replaceable, statutory protections for employees were almost nonexistent and regulatory requirements minimal and arguably ineffective. However, the expansive interpretation of the Scaffold Law now serves far less purpose given the current comprehensive worker safety rules and vastly improved safety technologies and the growth of state-sanctioned (and sometimes mandated) training programs as prerequisites to work on certain public projects and to obtain building permits on certain large private projects. Nor can the Scaffold Law be justified in light of the increased costs of the law, including exorbitant insurance premiums, which hinder new public and private developments and employment in New York, as well as a statistical analysis concluding that the Scaffold Law increases the injury rate in applicable occupations. Empirical evidence demonstrates that codifying permissible allocations of liability under the Scaffold Law would increase construction site safety, increase participation of minority and women-owned businesses, control unnecessarily inflated costs incurred by all New Yorkers and increase overall construction activity and employment. Logic and principles of fairness and equity demand that the statute be revised to restore and codify the application of New York’s comparative negligence standard to Scaffold Law cases.

Section II of this report discusses the failures of the Scaffold Law, which affect both the public and private sectors. Section III provides historical background on the law’s origins. Section IV provides the texts of the Scaffold Law and other germane statutes. Section V provides the proposed revision that this Construction Law Committee endorses. Section VI provides the Committee’s analysis of the proposed revision. Section VII is the Committee’s conclusion.

• The Failures of the Current Scaffold Law

 

Current interpretations and adjudications of the Scaffold Law have created a climate that poses substantial legal, economic and safety problems, including that:

1. Judicial interpretations of the Scaffold Law conflict with the codified public policy of the State of New York as a pure comparative negligence state, leading to an unjust allocation of risk on construction projects;
2. Frequent recharacterizations of the law in rulings in Scaffold Law cases are statutorily unsupported, inconsistent, and expand the factual circumstances giving rise to liability under the Scaffold Law beyond justifiable interpretation;
3. Vague, inconsistent and expansive interpretations of the Scaffold Law are unnecessarily inflating construction costs for all New Yorkers; and
4. One statistical analysis has concluded that the Scaffold Law accounts for over 675 additional worksite accidents and diverts billions of dollars away from construction spending each year.

III. Abridged Background/History

 

Enacted in 1921, Labor Law §240(1) derives from the 1885 Act ‘for the protection of life and limb’ which imposed liability on anyone “who shall knowingly or negligently furnish and erect…improper scaffolding..,” The law was expanded in 1947 to include coverage for workers who fall from elevated devices other than scaffolds. The law was amended further in 1969 to place responsibility for safety practices squarely on “[a]ll contractors and owners and their agents.”

Additionally, in 1974, the Occupational Safety and Health Act (“OSHA”) superseded the New York Industrial Code, New York’s codified construction site safety rules and the predicate to a finding of a violation of Labor Law §241(6). The Industrial Code is outdated as it has not been updated since 1975. Considering the numerous changes that have occurred in the construction industry since 1975 – even lead paint was not banned until 1978 – the reliance on the Industrial Code as a model of “safety” is troubling.

Moreover, judicial decisions have steadily expanded the application of the Scaffold Law from accidents involving “elevation related injuries” to include “gravity related injuries” as when a worker is pulled horizontally (see Runner v. New York Stock Exch., Inc., 13 N.Y.3d 599 (2009)), and expanded the concept even further by establishing a “same height rule” as when a worker sustains injuries where the falling object causing an injury was on the same level as plaintiff (see Wilinski v. 334 E. 92nd Hous. Dev. Fund Corp., 18 N.Y.3d 1 (2011)). Also, the “gravity related injury” analysis may apply where the injury does not occur on a construction site (see Joblon v. Solow, 91 N.Y.2d 457 (1998)), and liability under the Scaffold Law has even been imposed when a full-time maintenance employee was injured while performing his regular duties merely because the accident happened to have occurred during the pendency of a construction project (see Prats v. The Port Authority of New York and New Jersey, 100 N.Y.2d 878 (2003)). In Prats, the maintenance worker was performing a routine inspection that was not related to, in anticipation of, supporting, nor following the construction activities. Nevertheless, the Court of Appeals held that the Scaffold Law applied because the worker was of the class protected by the statute, was engaging in an activity otherwise covered by the statute [had it actually been performed by an employed construction worker on a construction site] and that he was performing his routine work at the same site where a construction project happened to be taking place.

• Relevant Laws

 

For a meaningful discussion on New York’s public policy on comparative fault and to develop an appropriate standard for the Scaffold Law, the following existing New York laws must be reviewed and considered:

• Labor Law §240

• 240. Scaffolding and other devices for use of employees

 

1. All contractors and owners and their agents… who contract for but do not direct or control the work, in the erection, demolition, repairing, altering, painting, cleaning or pointing of a building or structure shall furnish or erect, or cause to be furnished or erected for the performance of such labor, scaffolding, hoists, stays, ladders, slings, hangers, blocks, pulleys, braces, irons, ropes, and other devices which shall be so constructed, placed and operated as to give proper protection to a person so employed.

• Labor Law § 241-a

• 241. Protection of workmen in or at elevator shaftways, hatchways and stairwells

 

(a) Any men working in or at elevator shaftways, hatchways and stairwells of buildings in course of construction or demolition shall be protected by sound planking at least two inches thick laid across the opening at levels not more than two stories above and not more than one story below such men, or by other means specified in the rules of the board.

1. CPLR §§ 1401 and 1411

• 1401. Claim for contribution.

 

Except as provided in sections 15-108 and 18-201 of the general obligations law, sections eleven and twenty-nine of the workers’ compensation law, or the workers’ compensation law of any other state or the federal government, two or more persons who are subject to liability for damages for the same personal injury, injury to property or wrongful death, may claim contribution among them whether or not an action has been brought or a judgment has been rendered against the person from whom contribution is sought (emphasis added).

• 1411. Damages recoverable when contributory negligence or assumption of risk is established.

 

In any action to recover damages for personal injury, injury to property, or wrongful death, the culpable conduct attributable to the claimant or to the decedent, including contributory negligence or assumption of risk, shall not bar recovery, but the amount of damages otherwise recoverable shall be diminished in the proportion which the culpable conduct attributable to the claimant or decedent bears to the culpable conduct which caused the damages (emphasis added).

 

322. General Obligations Law §5-322.1

• 5-322.1. Agreements exempting owners and contractors for liability for negligence void and unenforceable; certain cases:

 

1. A covenant, promise, agreement or understanding in, or in connection with or collateral to a contract or agreement relative to the construction, alteration, repair or maintenance of a building, structure, appurtenances and appliances including moving, demolition and excavating connected therewith, purporting to indemnify or hold harmless the promisee against liability for damage arising out of bodily injury to person or damage to property contributed to, caused by or resulting from the negligence of the promisee, his agents or employees, or indemnitee, whether such negligence be in whole or in part, is against public policy and is void and unenforceable; provided that this section shall not affect the validity of the insurance contract, workers’ compensation agreement or other agreement issued by an admitted insurer. This subdivision shall not preclude a promisee requiring indemnification for damages arising out of bodily injury to person or damage to property caused by or resulting from the negligence of a party other than the promisee, whether or not the promisor is partially negligent.
2. Proposed Revision

 

One proposal to reform the current application of the Scaffold Law, namely, Senate Bill S.111 (Gallivan) and Assembly Bill A.3104 (Morelle), would modify the New York Civil Practice Law and Rules as follows:

 

AN ACT to amend the civil practice law and rules, in relation to the applicability of certain provisions with respect to persons injured in the use of scaffolding and other devices for use by employees.

 

The People of the State of New York, represented in Senate and Assembly, do enact as follows:

 

• 1. The civil practice law and rules is amended by adding a new section 1414 to read as follows:
• 1414. Applicability to certain actions.

 

1. In any action or proceeding to recover damages for personal injury, injury to property, or wrongful death pursuant to section two hundred forty, subdivisions one through five of section two hundred forty-one, or section two hundred forty- one-a of the labor law, where safety equipment or devices have been made available, and a person employed or otherwise entitled to the protection of the provisions of such section has failed to follow safety instruction or safe work practices in accordance with training provided, or failed to utilize provided safety equipment or devices, or engaged in a criminal act or was impaired by the use of drugs or alcohol, and such failure, act or impairment is a proximate cause of an injury to such person, the conduct attributable to such person shall not bar recovery, but the amount of damages otherwise recoverable shall be determined in accordance with section fourteen hundred eleven of this article to the extent that such conduct relates to the commission of a criminal act, impairment caused by the use of drugs or alcohol, the failure to use safety equipment or devices, the failure to comply with instructions or training regarding the use of safety equipment or devices or the failure to otherwise comply with safe work practices in accordance with safety training programs provided to such person. Such training programs shall include, but shall not be limited to, course in construction safety and health certified by the United States Occupational Safety and Health Administration or the Department of Labor.

 

1. Nothing contained in this section shall be deemed to impose or create liability under such sections of the labor law referred to in subdivision one of this section, where a person employed or otherwise entitled to the protection of the provisions of such sections has failed to follow safety instructions or safe work practice in accordance with training provided, or failed to utilize provided safety equipment or devices, or engaged in criminal act or was impaired by the use of drugs or alcohol, and such failure, act or impairment is the sole proximate cause of an injury to such person.

• 2. This act shall take effect immediately and shall apply to all causes of actions accruing on or after such date.

1. Analysis

 

New York uniquely lags behind every other state in its treatment of gravity related injuries, due to its imposition of vicarious and absolute liability on contractors and owners. New York is the sole state in the union that continues to employ an “absolute liability” standard in such circumstances. Every other state that once used this standard abandoned it long ago. The Committee supports adoption of S.111/A.3104 to align New York with the rest of the country and to resolve the following difficulties:

• Interpretations of the Scaffold Law contravene New York’s CPLR §1411 and foster an unjust allocation of risk on construction projects.

 

New York law favors a fair and equitable balance among parties causing and suffering an injury. Indeed, New York’s CPLR §1411 provides that when an injured claimant sues to recover damages for personal injuries, the culpability of the claimant in causing his/her own injury proportionately reduces the defendant’s financial obligation. In other words, CPLR §1411, together with other statutes, precludes claimants from escaping the consequences of their own negligence. A defendant is not obligated to pay a claimant to the extent the claimant is found responsible for his/her own damages. It is eminently fair and reasonable to not hold a defendant responsible for the portion of an injury caused by a claimant.

New York’s commitment to a public policy of a fair and equitable balance among the parties causing an injury can also be seen by the General Obligations Law’s prohibitions against certain parties contracting away their own culpability or contracting for indemnifications from their own negligence. With regard to construction work in particular, any contract that purports to indemnify or hold a promisor harmless for his/her own negligence is “against public policy and is void and unenforceable.”

Simply put, New York’s public policy and its duly enacted laws abhor a litigant avoiding the consequences of its share of culpability. Yet somehow, the judiciary has created an exception to this long-standing and codified public policy: its current interpretations of the Scaffold Law.

Current interpretations of the Scaffold Law wholly ignore New York’s statutorily enacted public policy of fairly and equitably balancing liability among the parties based on their relative degrees of culpability. Only under the Scaffold Law can a claimant be 99% at fault for causing his/her own injuries and still recover 100% of the damages from a defendant who was vicariously liable as an owner or contractor but was not negligent and/or had no knowledge that construction work was taking place. Only under the Scaffold Law can a claimant ignore with impunity the procedures set in place by the owner and general contractor and still recover 100% of all damages, provided that someone other than the claimant (even a party not named as a defendant in the lawsuit) was 1% at fault. Only under the Scaffold Law is a claimant allowed to avoid the consequences of his/her own culpable conduct for failing to properly utilize the equipment provided. Only under the Scaffold Law does CPLR §1411 not apply to vicarious liability (notwithstanding the absence of any statutory authority therefor).

The disconnect between New York’s public policy of fairness and equity and the interpretation of the Scaffold Law causes continued confusion in rulings interpreting the statute. The courts have conflated an owner’s or contractor’s responsibility to provide proper protection under the Scaffold Law with strict liability for all costs of injury, despite the CPLR’s explicit requirement that a comparative negligence standard be applied in such cases. This interpretation must be corrected.

The current application of the Scaffold Law does not provide a defendant, which is typically the property owner, with a meaningful and just opportunity to defend itself against liability by invoking the culpable conduct of the claimant. For example, an owner can be 0% at fault but still liable for all of the damages: if the combined negligence of the contractor (hired by the owner) and the injured worker account for all of the fault attributable to an injury, then the worker still may claim and recover 100% of his/her damages from the owner. The proposed legislation would ensure a just allocation of liability based on the conduct of the parties, which would bring the Scaffold Law into conformity with the public policy of New York.

However, it cannot be overstated that the proposed legislation would not change an owner’s or contractor’s responsibility to provide proper and adequate protections to workers. Rather, it would merely restore an owner’s or contractor’s right to partially defend itself against total exposure for all of a worker’s damages by establishing that the owner or contractor did in fact provide proper and adequate protections and equipment, and that the injured worker is either partially or entirely at fault for causing his/her own injuries by not using the safety equipment or following safety instructions. The value of the proposed legislation is that each of the players would equitably (although not equally, as the worker is still entitled to recover all damages other than the portion for which the worker is at fault, while the owner and contractor, still responsible for overall safety, are liable for all other damages regardless of their own culpable conduct) share responsibility for at least the portion of any damages attributable to such party’s conduct, which is intrinsically fair.

The proposed legislation would incentivize owners and contractors to comply with the Scaffold Law and improve worksite conditions. If enacted, the new law would require that the fact finder in a case where a worker’s negligence contributed to his/her injury first determine whether proper devices and instructions were provided and then consider the impact of such safety efforts as compared to the worker’s negligence. In this manner, the proposed statute would restore owners’ and contractors’ rights to a fair opportunity to be heard on the question of liability. An owner or contractor would not be faced with the possibility of a worker being 99% at fault and the owner or contractor being unfairly held responsible for 100% of the damages. The owner or contractor would finally know that by providing the proper equipment and instruction, the owner or contractor can reduce its exposure to the extent of a worker’s culpability.

Under the proposed legislation, the plaintiff worker would only be responsible for his/her own share of fault in causing the injury and the worker would still be fully protected from the culpable conduct of all third parties. The parties designated by the statute (as having ultimate control over the job site) would continue to bear responsibility for ensuring the worker’s safety. In other words, the owner and contractor would remain strictly liable to an injured worker to the extent of any third party’s culpability. For example, as shown on the table below, if on a given accident, a contractor is 15% at fault, the worker is 10% at fault and a third party is 75% at fault, under the current interpretation of the law, the contractor would be liable for 100% of the worker’s damages. The proposed reform would only reduce the contractor’s liability to the worker by 10% (the worker’s percentage of fault) and not 85% (the percentage of fault not attributable to the contractor).

Liability Under Scaffold Law	Worker	Contractor	Third Party
Stated Percentage of Fault	10%	15%	75%
Liability for Damages – Current Judicial Interpretation	0%	100%	0%
Liability for Damages – Proposed CPLR Amendment	10%	90%	0%

 

In this manner, a revised law would incentivize the worker to be mindful of his/her own obligation to comply with safety instructions and employ the safety devices furnished for those purposes as the worker’s own negligence (and only the worker’s own negligence) would support an argument seeking a limitation on the damages payable to the worker.

The proposed legislation, S.111/A.3104, represents a precise and narrowly tailored reformation of the interpretation of the Scaffold Law to harmonize it with the rest of New York’s public policy and laws. The new CPLR §1414 would codify the right to raise a defense only to the amount of a damage award based on the culpable conduct of the injured worker. In this manner, the allocation of risk would fall equitably upon the owner and contractor by holding them liable to ensure compliance with the Scaffold Law and would also fairly limit their exposure to the extent an injured worker was responsible for his/her own injuries. Again, the proposed legislation does not in any way change, limit or negate an owner’s or contractor’s obligation to provide adequate devices that afford proper protection to workers under the Scaffold Law. Rather, the new CPLR §1414 would merely allow an owner or contractor to reduce proportionally the damages owed to an injured worker by an amount equal to the percentage of fault attributable to the worker in causing his/her own injuries. In fact, the proposed revision to CPLR §1414 explicitly states that the comparative negligence defense against the amount of any award is available: “In any [Scaffold Law] action… where safety equipment or devices have been made available, and a person employed… has failed to follow safety instruction or safe work practices in accordance with training provided, or failed to utilize provided safety equipment or devices..” (emphasis added). Accordingly, the new proposal does not attempt to repeal or relax any safety requirements or obligations of an owner or contractor. Contrary to the claims of the opponents of reform, the amendment expressly requires compliance with safety laws as a prerequisite for invoking the proposed statute as a defense on the question of liability. Each party would thus be equitably responsible for the portion of the risk within its control, which comports with the codified public policy of New York.

The clarification and codification of a comparative negligence standard in adjudicating Scaffold Law claims offered by the proposed legislation would not change New York’s public policy of protecting workers. Rather, the proposed legislation would apply New York’s public policy of fairness and equity to the interpretation of the Scaffold Law.

• Frequent recharacterizations of the law in rulings in Scaffold Law cases are statutorily unsupported, inconsistent, and expand the factual circumstances giving rise to liability under the Scaffold Law beyond justifiable interpretation.

 

The interpretation of the Scaffold Law is so perplexing that the former Chief Justice of the Court of Appeals characterized one of her opinions as “an attempt at the highly elusive goal of defining with precision the statutory terms” of the Scaffold Law. Chief Justice Kaye is not alone in her opinion of the vagaries of the Scaffold Law. Indeed, Hon. George M. Heymann, a former New York City Civil Court Justice, said the Scaffold Law “has been and continues to be a statute that will yield differences of opinion between the courts at all levels regarding the nature of a worker’s tasks that fall within the statute.”

While at times the Court of Appeals renders decisions that acknowledge the practical realities of construction work, e.g., that the Scaffold Law does not apply to a worker who stepped into a trench while spreading concrete into the trench because it is illogical to cover the very trench the worker is filling (See Salazar v. Novalex Contr. Corp., 18 N.Y.3d 134 (2011)), on other occasions the Court of Appeals offers no explanation for its opinions, such as in Grove v. Cornell University, 75 A.D.3d 718 (3d Dep’t 2010), aff’d in part and modified in part 17 N.Y.3d 875 (2011).

The plaintiff in Grove was wearing a harness and lanyard but did not attach the lanyard to the aerial lift basket he was working in even though he was reminded to do so by his co-worker. A few moments later, the co-worker turned and observed that the plaintiff was gone and the gate to the lift basket was open. The plaintiff had fallen 30 feet and suffered serious injuries. The Third Department dismissed the plaintiff’s claim under the Scaffold Law, holding that the harness and lanyard were adequate safety devices under the statute and that the plaintiff’s failure to tie off his harness and lanyard as instructed was the sole proximate cause of the accident. The dissent from the Third Department argued that the Scaffold Law claim should not be dismissed because there was evidence that the basket’s gate was not properly operating or self-closing, which could possibly be a contributing cause of the plaintiff’s fall. The Court of Appeals, without explaining its rationale, modified the Third Department’s decision to reinstate the Scaffold Law claim and held that there were triable issues of fact.

Though the Court of Appeals provided no reasoning behind its decision to reinstate the Scaffold Law claim in Grove, it seems logical that if the plaintiff had utilized his harness and lanyard to properly tie off, he would not have fallen to the ground even if the gate was broken, i.e., the harness and lanyard would have arrested his fall and prevented his injuries even if he passed through the broken gate. The court’s decision leaves to a jury to decide whether the gate was broken and, if so, whether the gate was, in any remote manner, a proximate cause of the plaintiff’s injuries. And, if the jury finds that the broken gate contributed to the plaintiff’s injuries by just 1%, then even if the plaintiff was 99% at fault for not affixing his harness and lanyard, even after being reminded to do so, the plaintiff is nevertheless entitled to a 100% recovery for all damages, which is unfair to an otherwise non-negligent but vicariously liable owner or contractor. From a practical standpoint, Grove encourages plaintiff workers to assert every possible claim, without regard for the plaintiff’s own culpability, no matter how specious. Thus, the lesson of Grove is that every claim can result in a full payout (or windfall, depending on perspective), even in cases where a worker was told to tie off, failed to tie off, and fell to his/her injury. When plaintiffs are effectively immune from the consequences of their own actions and defendants are strictly liable for all damages, the system itself compels the prosecution of these lawsuits in this manner. The practical lesson for the owner (and the insurance carriers) then is to settle, which considering the plaintiff’s typical ability to recover, is frequently an unjust result, for an otherwise non-negligent owner or contractor.

Another court held an owner strictly liable even though the owner had no knowledge that the work was taking place and was never afforded an opportunity to provide a safe workplace. In Morales v. D&A Food Service, 10 N.Y.3d 911 (2008), the Court of Appeals allowed recovery against a property owner after a worker performing renovations for a tenant (who did not notify the owner that work was being performed, which was a violation of the tenant’s lease) fell from a ladder. Despite the fact that the owner had no knowledge of the work or ability to control the site, the court granted partial summary judgment to the plaintiff under Labor Law §240.

In the First Department, recent examples of decisions expanding the law’s applicability include Kempisty v. 246 Spring St., LLC, 938 N.Y.S.2d 288 (1st Dep’t 2012) (holding that Labor Law §240 applied even though “there was no appreciable height differential between the plaintiff and the object being hoisted..”); Marrero v. 2075 Holding Co. LLC, 964 N.Y.S.2d 144 (1st Dep’t 2013) (holding that Labor Law §240 applied to a situation where a cart tipped over and beams on top of a cart fell off the cart onto the plaintiff’s ankle); and Rodriguez v. DRLD Dev. Corp., 970 N.Y.S.2d 213 (1st Dep’t 2013) (holding that Labor Law §240 applied where a worker tripped into a stack of sheet rock that was resting atop blocks of wood approximately two feet high and leaning against a wall on the same level, causing the sheet rock to fall onto the worker).

Other recent decisions of the Court of Appeals have also expanded the factual circumstances that may now give rise to a Scaffold Law claim. In Runner., 13 N.Y.3d 599, the court found that Labor Law §240 applied where a worker, serving as a counterweight on a makeshift pulley, was pulled horizontally into the pulley, injuring his hands as they jammed into the bar pulley mechanism. Runner was a significant departure from the then-controlling case law regarding the interpretation of the Scaffold Law and, for the first time, replaced the “height related” injury requirement with a “gravity related” analysis. In Wilinski, 18 N.Y.3d 1, the Court of Appeals held that the Scaffold Law may apply to affixed pipes that fell over onto the injured worker, even though the pipes tipped from the same level where the worker was standing. The Wilinski decision created a brand new rule even though the law itself has not been amended in decades. This so-called “same height rule” has further broadened the interpretation of the Scaffold Law at the expense of owners, contractors and taxpayers in New York.

Furthermore, the courts have consistently held that even a claimant’s intoxication is not a valid fault defense under Labor Law §240 claims; provided, that any statutory violation can be demonstrated regardless of the actual percentage of fault attributable to such violation. See Sergeant v. Murphy Family Trust, 284 A.D.2d 991 (4th Dep’t 2001); Podbielski v. KMO-361 Realty Assoc., 294 A.D.2d 552 (2d Dep’t 2001); Bondanella v. Rosenfeld, 298 A.D.2d 941 (4th Dep’t 2002). As a result, the Scaffold Law is so broad that an intoxicated worker, who is 99% at fault for his/her injuries, will receive a recovery of 100% of all damages if he/she can establish a violation of the statute and that another party is 1% negligent.

As an ancillary issue, the New York State Industrial Code, the predicate to a finding of a violation of Labor Law §241(6), has been superseded by OSHA on construction sites, but not in the courtroom. Therefore, New York jurisprudence operates under a scheme that is not followed in the real world. The New York Industrial Code and OSHA contain contradictory safety standards (examples of which can be found in Appendix A, annexed hereto). Compounding this dilemma, the New York Industrial Code has not been updated in decades, likely due to its preemption by OSHA. Although contractors and owners in New York are legally required to comply with OSHA standards over any contradictory provision of the New York Industrial Code, the courts use the Industrial Code and not OSHA to determine liability under § 241(6). Admittedly, the proposed legislation does not address the conflict between the governing safety requirements (OSHA) and the predicate for a Labor Law §241(6) claim (the New York Industrial Code), which will leave unanswered questions of how an owner or contractor can comply with safety regulations for §241(6) purposes while operating an OSHA- compliant site. But to add further confusion, vicarious liability under the Scaffold Law is not predicated on a violation of OSHA or an Industrial Code provision. Rather, liability under the Scaffold Law is subject to the creative arguments of counsel and the courts’ interpretations.

• Vague, inconsistent and expansive interpretations of the Scaffold Law are unnecessarily inflating construction costs for all New Yorkers.

 

When faced with the vagaries, inconsistencies and expanding scope of the Scaffold Law, insurance carriers in the construction market have left the market altogether or have increased the costs of the premiums to owners, government entities and authorities, and contractors of all tiers. Indeed, the Scaffold Law has resulted in a “massive withdrawal of underwriters” from the construction market for insurance in New York. Many national general liability carriers do not write coverage for construction in New York, citing the Scaffold Law as the number one reason.

A.M. Best’s Review released a study indicating the following:

“Ten years ago, the average liability loss costs in New York City were 500% higher than the loss costs in seven other states: Pennsylvania, Virginia, Georgia, South Carolina, Ohio, Massachusetts and North Carolina combined, according to a study by the AIA. For New York State, outside of New York City, the loss costs averaged 232% more than the other states. The study indicated the only difference between New York and the other states was the Scaffold Act, which accounted for one third of the cost differentials (Best’s Review, July 2003).”

 

Willis of New York, Inc. released a study last year that examined the effects of the Scaffold Law on several different projects in New York City, including (1) general liability/excess losses for its largest projects in the past five years due to the Scaffold Law; (2) projected and incremental premiums and deductibles that have been imposed due to the Scaffold Law; and (3) increases in the cost of individual claims due to the Scaffold Law. Willis determined that New York’s general liability premium rates are approximately 300% higher than those in New Jersey. The incremental increases that insurers are now requiring are minimum deductibles of $500,000 for workers’ compensation and anywhere from $750,000 to $2,000,000 for general liability on a policy with a $5,000,000 occurrence limit. Of all general liability claims in New York exceeding $1,000,000, 78% are Labor Law §240(1) claims. General liability carriers attribute this trend to both the law itself and judicial interpretation that has expanded the law’s applicability.

It is not just private companies that are affected by the Scaffold Law. The New York City School Construction Authority (“SCA”), the government authority charged with building schools for the children of the City of New York, experiences great difficulty trying to obtain insurance coverage for its construction programs, which it attributes to the Scaffold Law. The SCA Owner Controlled Insurance Program (“OCIP”) policy premium cost $100,000,000 in 2013, and when the carrier declined to offer a renewal policy for 2014, the SCA ultimately found one carrier that was willing to enter into an insurance arrangement with an initial premium cost of $130,000,000, a 30% increase. The $30 million cost increase suffered by the publicly funded SCA can be linked directly to the Scaffold Law. According to the Associated General Contractors of New York State (“AGC”), “if the SCA were to construct their program in New Jersey—where labor and material costs are very comparable and the major variable is no Scaffold Law—their insurance costs would be approximately $25,000,000 for the same term.”

Because of the Scaffold Law, taxpayer dollars are being diverted from construction of schools in order to fund insurance payouts to claimants who may be 99% at fault for their own accidents. Adopting the proposed legislation could save the SCA and New York taxpayers as much as $100,000,000 or more each year in insurance costs alone. Unfortunately, the children of New York City will suffer the brunt of the SCA’s diminished capacity until the proposed reform to Scaffold Law adjudication is enacted. According to Ross Holden, Executive Vice President & General Counsel for the SCA, “[the SCA] could build another two or three schools a year for all the extra money [the SCA is] spending on insurance.”

The exorbitant insurance premiums on general liability insurance policies in New York also affect the bidders seeking to work on SCA projects, specifically minority and women owned business enterprise (“M/WBE”) subcontractors. The New York State Department of Economic Development’s report on M/WBEs found significant differences in loan denial rates by race and ethnicity. In other words, M/WBEs face bias before they even put their foot in the door. The increased cost of enrolling in the SCA OCIP saddles these M/WBEs with another obstacle to entering the market. Indeed, many M/WBE subcontractors, which do not have the financial resources that bigger contractors have, are facing collapse as they cannot remain competitive even on SCA projects with available OCIP policies, and also cannot independently afford liability insurance to perform work in the private sector.

• A statistical analysis has concluded that the Scaffold Law, itself, accounts for over 675 additional worksite accidents and diverts billions of dollars away from construction spending annually. Empirical evidence demonstrates that codifying permissible allocations of liability under the Scaffold Law will increase construction-site safety, increase participation of M/WBEs, reign in unnecessarily inflated costs incurred by all New Yorkers and increase overall construction activity and employment.

 

Opponents of reform argue that the Scaffold Law improves worker safety. This claim is unfounded. In fact, the current law increases the number of safety-related injuries on construction sites. A study conducted jointly by researchers at the Nelson A. Rockefeller Institute of Government of the University at Albany and Cornell University concluded that “Labor Law 240 increases the number of [nonfatal] injuries by about 5.5 [injuries] per 1,000 full time workers annually..” These 5.5 additional injuries per 1,000 workers, extrapolated to the estimated 123,000 workers in fields especially affected by the Scaffold Law, led the study’s authors to determine that “a reasonable estimate of the additional number of nonfatal injuries due to the law is 677 cases” (emphasis added).

In interpreting the findings (in every tested permutation of year(s) or “clustering” of states) measuring the impact of the Scaffold Law, the authors of the study note that “[i]n addition to statistical significance, the Labor Law 240 effect is also substantial in magnitude…” and the increased injury rate due to the mere existence of the Scaffold Law “is consistent with the hypothesis that the law blunts employers’ incentives to invest in worker safety. We are thus confident that Labor Law 240 makes construction in occupations to which it applies more dangerous.”

If a “scaffold law” with strict liability makes construction more dangerous then, logically, it would follow that, in the fullness of time, repealing a “scaffold law” with strict liability should make construction less dangerous. Illinois, the last state other than New York to impose strict liability in its iteration of a “scaffold law,” repealed its law in 1995. Illinois is fairly similar to New York “along a number of relevant political, economic, and demographic dimensions” and the repeal of its “scaffold law” provides the study’s authors with a contemporaneous example and an additional empirical method for measuring the impact of removing a “scaffold law” with strict liability from a large metropolitan construction environment. One of several data points highlighted by the study as evidencing the improving construction safety trends experienced in Illinois (following its “scaffold law” repeal) is the rate of nonfatal injuries from 2000 to 2010: “Notably, Illinois had the largest decline among states at 66.67 percent, which is consistent with the hypothesis that a scaffold law that increases employers’ liability attenuates incentives to invest in workplace safety.”

In the five years following Illinois’ repeal of its “scaffold law” (i.e., between 1995 and 2000), Illinois enjoyed economic and worksite safety benefits from fairly allocating construction risks: construction site fatalities declined as a percentage of construction workers by 30%, overall worker injury rate decreased by 53%, and construction related employment increased by 25%.

The effects of the repeal in Illinois were so positive that seven years later, in 2002, when a concerted attempt to reinstate the old law was underway, the president of the Chicago Federation of Labor, Dennis Gannon, said, “It’s a legislative issue for the trial lawyers, but not necessarily for organized labor at this time.” It speaks volumes that the head of a major labor union refused to support reinstating the Illinois “scaffold law.” Advocates for worker safety (on both sides of the Scaffold Law reform issue) should consider the following comparative data measuring average injury rates for fatal falls in Illinois, New York and the U.S. in the years immediately prior to, and since, Illinois enacted its reform (which occurred in 1995):

– From 1992 to 1995, the average rates of fatal falls per 100,000 full-time construction workers in Scaffold Law-affected occupations were: NY – 7.25; IL – 8.92; US avg. – 5.92.

– From 1996 to 2011, the averages were: NY – 7.41 (a 2.2% increase); IL – 5.51 (a 38.25% decrease); and US avg. – 5.49 (a 7.25% decrease).

Accordingly, the facts do not support the assertion that the Scaffold Law protects workers and increases jobsite safety. In fact, the Scaffold Law inflates injury rates and cannot be shown to have any impact on the motivations of owners and contractors to ensure worksite safety.

Freedom from repercussion for one’s own actions does not equate to nor ensure safety. Rather, the perceived absence of accountability may encourage risky behavior and imprudent decisions. The Scaffold Law, as currently adjudicated, holds owners and contractors fully liable regardless of the extent to which they and the claimant may have acted negligently. In this manner, the Scaffold Law denies owners and contractors a meaningful opportunity to control or limit exposure to adverse financial consequences. The fact that the Scaffold Law can be statistically shown to alone account for additional worksite injuries each year “is consistent with the hypothesis that the law blunts employers’ incentives to invest in worker safety.” This perception, and a belief that workers who are not held accountable for their own actions (such as through the imposition of strict liability against their employers) are more likely to act in a negligent manner, are inherent in the hypothesis that the Scaffold Law actually creates an incentive for owners and contractors to invest in surveillance rather than safety measures, ultimately resulting in higher numbers of injuries in the industries and jurisdictions where such “scaffold laws” are enacted. As previously stated, the proposed Scaffold Law reform offers no cover to an owner or contractor who has failed to provide proper safety devices and instruction, but instead allows an owner or contractor to defend itself to the extent it might not be liable for a worker’s injury because of the worker’s culpable conduct. Thus, the reform inherently incentivizes both the parties controlling a worksite (e.g., owner and contractor) to ensure compliance with all current safety standards, and, simultaneously, the parties employed on a worksite to not act in a negligent manner. The proposed reform would eliminate the blatantly unfair and unjust situation that a worker can be 99% at fault and recover 100% of his/her damages from a non-negligent party. In this manner, the reform would make clear to workers that they have a duty to themselves to follow safety instructions and to employ furnished safety devices.

In addition to highlighting the safety issues with the current Scaffold Law, the Rockefeller study also estimates that the Scaffold Law directly diverts $785,000,000 of public construction funds and $1,487,000,000 in private sector construction funds to pay for increased insurance and claim costs. The study further notes that by returning these diverted dollars to actual construction costs the net effect on the state economy exceeds a 1:1 increase in construction spending. Each additional airport terminal, school, subway station, sports stadium or office building that could be constructed (because of increased construction budgets resulting from the savings on direct insurance costs) would create additional demands for related facilities and services. For example, building a new airport terminal could create sufficient demand to justify investments in constructing additional hotels, apartments and parking garages that would, in turn, employ construction workers to build those additional facilities and then staffers to operate the facilities. Even after accounting for a corollary decrease that would, following enactment of Scaffold Law reforms, negatively affect the direct participants and ancillary service providers in the construction insurance sector, the study estimates that the net impact of reform would be a net gain of: (1) $154,000,000 in the total value of output in the economy; (2) 12,304 jobs; and (3) $484,000,000 in increased labor income. A separate, recent study by the Pacific Research Institute found, from extrapolating data from six common tort reforms, that the reform to the Scaffold Law could create as many as 86,000 jobs in New York.

It is therefore reasonable to expect that if all parties are allocated a measured and equitable interest in promoting worksite safety and the proposed reform is enacted in New York then, construction site safety will increase, M/WBE contractor participation will increase, costs to taxpayers and industry participants will decrease, construction-related employment will increase, and insurance carriers will return to do business in New York.

VII. Conclusion

 

The continuously expanding application of the Scaffold Law runs counter to the codified public policy of New York, which favors a fair and equitable balance among parties causing and suffering an injury. The vagaries and interpretations of the Scaffold Law have grossly inflated the costs of participating in the construction industry in the State of New York to the detriment of all New York taxpayers, M/WBEs, and even the workers themselves. Moreover, the Scaffold Law has been shown, in and of itself, to account for increased injuries on construction sites.

The proposal for reform, S.111/A.3104, is decidedly narrow in scope yet broad in its potential for creating positive and meaningful growth in New York State. The proposed reform would not, in any manner, decrease, change or limit the existing duties of owners and contractors to ensure safe work environments and to provide proper safety devices and instruction. Rather: (1) the proposed reform corrects only the absolute inequity in fully indemnifying a claimant against the financial consequences of his/her own negligence; and (2) the defense afforded by the proposed reform would only be available to a defendant if proper safety equipment and instructions have been provided.

Therefore, principles of equity and fairness, the codified public policy of New York State, and the goals of improving worker and worksite safety and achieving positive economic growth within New York demand that the defense of comparative negligence be applied to the adjudication of Scaffold Law claims. It is time to end New York’s unfortunate distinction as being the only state with a scaffold law containing a strict liability standard that is enforced regardless of the culpability of the claimant in negligently causing his/her own injury.

 

Report prepared by:

 

Joel Sciascia, Esq., Immediate Past Chair

Ariel N. Weinstock, Esq., Current Co-Chair

Jill Bramwell, Esq., Member

Steven R. Dyki, Esq., Member

 

APPENDICES

– Appendix A – Contradictory Provisions; New York Industrial Code and OSHA

– Appendix B – Industry Reports (e.g., BTEA, AGC reports)

 

Appendix A

 

[Follows This Page]

 

NYS Industrial Code compared to OSHA

 

EXAMPLE 1: WHEN FALL PROTECTION IS REQUIRED

 

IC does not specify at what height fall protection is required. OSHA 1926.501 requires some form of fall protection at heights greater than 6 feet.

 

OSHA 1926.501(b)(1)

 

“Unprotected sides and edges.” Each employee on a walking/working surface (horizontal and vertical surface) with an unprotected side or edge which is 6 feet (1.8 m) or more above a lower level shall be protected from falling by the use of guardrail systems, safety net systems, or personal fall arrest systems.

 

OSHA 1926.501(b)(2)(i)

 

Each employee who is constructing a leading edge 6 feet (1.8 m) or more above lower levels shall be protected from falling by guardrail systems, safety net systems, or personal fall arrest systems. Exception: When the employer can demonstrate that it is infeasible or creates a greater hazard to use these systems, the employer shall develop and implement a fall protection plan which meets the requirements of paragraph (k) of 1926.502.

 

OSHA 1926.501 (b)(2)(ii)

 

Each employee on a walking/working surface 6 feet (1.8 m) or more above a lower level where leading edges are under construction, but who is not engaged in the leading edge work, shall be protected from falling by a guardrail system, safety net system, or personal fall arrest system. If a guardrail system is chosen to provide the fall protection, and a controlled access zone has already been established for leading edge work, the control line may be used in lieu of a guardrail along the edge that parallels the leading edge.

EXAMPLE 2: MINIMUM ILLUMINATION

 

ICR 23-1.30 provides for minimum lighting of 10 foot candles in any area where persons are required to work whereas OSHA 1926.56(a) provides for less minimum illumination in certain work areas (minimum lighting of 3 foot candles in general construction areas, concrete placement, excavation and waste areas, access ways, active storage areas, loading platforms, refueling and field maintenance areas; and minimum lighting of 5 foot candles in certain tunnels, shafts and general underground work areas).

 

ICR 23-1.30 (Illumination)

 

Illumination sufficient for safe working conditions shall be provided wherever persons are required to work or pass in construction, demolition and excavation operations, but in no case shall such illumination be less than 10 foot candles in any area where persons are required to work nor less than 5 foot candles in any passageway, stairway, landing or similar area where persons are required to pass.

 

OSHA 1926.56(a)

 

General. Construction areas, ramps, runways, corridors, offices, shops, and storage areas shall be lighted to not less than the minimum illumination intensities listed in Table D-3 while any work is in progress:

 

Table D-3 – Minimum Illumination Intensities In Foot-Candles
Foot-Candles	Area of Operation
5	General construction area lighting.
3	General construction areas, concrete placement, excavation and waste areas, access ways, active storage areas, loading platforms, refueling, and field maintenance areas.
5	Indoors: warehouses, corridors, hallways, and exitways.
5	Tunnels, shafts, and general underground work areas: (Exception: minimum of 10 foot-candles is required at tunnel and shaft heading during drilling, mucking, and scaling. Bureau of Mines approved cap lights shall be acceptable for use in the tunnel heading)
10	General construction plant and shops (e.g., batch plants, screening plants, mechanical and electrical equipment rooms, carpenter shops, rigging lofts and active store rooms, mess halls, and indoor toilets and workrooms.)
30	First aid stations, infirmaries, and offices.

EXAMPLE 3: LENGTH OF LANYARDS

 

ICR 23-1.16(b) provides that safety belt/hamess lanyards not allow falls more than 5 feet whereas OSHA 1926.104(d) provides that safety belt/hamess lanyards not allow falls more than 6 feet.

 

ICR 23-1.16 (Safety belts, harnesses, tail lines and lifelines)

 

(b) Attachment required. Every approved safety belt or harness provided or furnished to an employee for his personal safety shall be used by such employee in the performance of his work whenever required by this Part (rule) and whenever so directed by his employer. At all times during use such approved safety belt or harness shall be properly attached either to a securely anchored tail line, directly to a securely anchored hanging lifeline or to a tail line attached to a securely anchored hanging lifeline. Such attachments shall be so arranged that if the user should fall such fall shall not exceed five feet.

 

OSHA 1926.104(d)

 

Safety belt lanyard shall be a minimum of 1/2-inch nylon, or equivalent, with a maximum length to provide for a fall of no greater than 6 feet. The rope shall have a nominal breaking strength of 5,400 pounds.

EXAMPLE 4: LADDERS

 

ICR 23-1.21(b)(6) prohibits most ladder splicing (unless the extension piece is being used as a handhold) whereas OSHA 1926.1053(a) and (b) permit spliced ladders.

 

ICR 12-1.21(b)(6) (Ladder splicing)

 

Ladders shall not be spliced to increase their length except that extension pieces may be spliced to the upper ends of ladders for use as handholds. Such extension pieces shall not bear against the ladder supporting object or structure.

 

OSHA 1926.1053(a)(9)

 

When splicing is required to obtain a given length of side rail, the resulting side rail must be at least equivalent in strength to a one-piece side rail made of the same material.

 

OSHA 1926.1053(b)(5)(ii)

 

Wood job-made ladders with spliced side rails shall be used at an angle such that the horizontal distance is one-eighth the working length of the ladder.

 

ICR 23-1.21 (b)(5)(ii) permits minimum wooden ladder rung spacing of 12 inches whereas 1926.1053(a)(3)(i) permits minimum ladder rung spacing of 8 inches.

 

ICR 23-1.21(b)(5)(ii)

[Wood Ladder] Rung spacing shall be uniform and shall be not less than 12 inches nor more than 14 inches, center to center.

 

OSHA 1926.1053(a)(3)(i)

Rungs, cleats, and steps of portable ladders (except as provided below) and fixed ladders (including individual-rung/step ladders) shall be spaced not less than 10 inches (25 cm) apart, nor more than 14 inches (36 cm) apart, as measured between center lines of the rungs, cleats and steps.

 

ICR 23-1.21(c) and (d) contain maximum lengths for single and extension/sectional ladders. OSHA does not contain any per se maximum length limits.

 

ICR 23-1.21(c)(1)

 

Single ladders. Rung or cleat type ladders consisting of a single section shall not exceed 30 feet in length.

 

ICR 23-1.21(d)(l)

 

Extension ladders and sectional ladders. Extension ladders shall consist of not more than three sections and shall not exceed 60 feet in length when fully extended.

EXAMPLE 5: OVERHEAD PROTECTION ON SCAFFOLDS

 

ICR23-5.1(i) provides for planking as the sole means of overhead protection for scaffolds whereas OSHA 1926.451(h)(1) provides for toeboards, screens, guardrail systems, debris nets, catch platforms or canopy structures as means of overhead protection.

 

ICR 23-5.1 (General provisions for all scaffolds)

 

(i) Overhead protection. Overhead protection when required for any scaffold shall consist of planking not less than two inches thick full size, exterior grade plywood not less than three-quarters inch thick or material of equivalent strength. Such planks used for overhead protection shall be laid tight, shall extend the full length and width of the working platform. Such overhead protection shall be located not more than 10 feet above the surface of the working platform. Such overhead protection shall not be used to support any person, material, tools or equipment.

 

OSHA 1926.451(h)(1)

 

In addition to wearing hardhats each employee on a scaffold shall be provided with additional protection from falling hand tools, debris, and other small objects through the installation of toeboards. screens, or guardrail systems, or through the erection of debris nets, catch platforms, or canopy structures that contain or deflect the falling objects. When the falling objects are too large, heavy or massive to be contained or deflected by any of the above-listed measures, the employer shall place such potential falling objects away from the edge of the surface from which they could fall and shall secure those materials as necessary to prevent their falling.

 

Appendix B

 

[Follows This Page]

 

THE SCAFFOLD LAW: 

ONLY IN NEW YORK!

 

• No other state in the union has an absolute liability standard still on its books like the “Scaffold Law,” §240 of the Labor Law, which, along with court decisions, imposes a standard of absolute liability on contractors and owners for gravity related injuries on construction sites.

 

• The Scaffold Law is the only area of civil liability in New York State in which comparative negligence does not apply.

 

• Other than Illinois, no state has had such an absolute liability standard since at least the 1940s, when workers compensation became the norm.

 

• Illinois outright repealed their statute, known as the “Structural Work Act,” in 1995. In addition to significant reductions in insurance loss costs, they experienced a significant increase in construction employment and significant reductions in construction workplace fatalities and injuries.

• As observed above, preceding the 1995 reform in Illinois, there was a significant decrease in rates resulting from a 1991 Illinois court ruling, allowing that third parties held liable for a work-related injury could seek contribution from the injured worker’s employer, but such contribution may be capped by the amount of applicable workers compensation benefits. This cap is named for an Illinois case—Kotecki v. Cyclops Welding Corp., 146 III. 2d 155, 166 III. Dec. 1, 585 N.E.2d 1023 (1991)—that first imposed it.

• Post reform, loss costs fell dramatically from the 1995 level in subsequent years to a point where the 2000 loss costs were 91% lower than the 1995 loss cost.

• The increase noted in 1998 is likely attributable to a significant increase in bridge work, particularly in the Chicago area, during the period of time.

• In addition to the significant insurance loss cost reductions documented above, the following was observed:

 

• • Number of Construction Jobs rose by 25%.
  • Decrease in Workplace Fatalities by 30% over a six year span.

• Overall worker injury rate decreased by 53% giving Illinois the 10th lowest injury rate in the country.

• The plaintiffs’ bar in Illinois has made occasional pushes to re-institute the “Structural Work Act.” Those unsuccessful efforts have gained little or no traction and have been strongly opposed not only by the construction and business communities, but significantly, have not been supported by organized labor, despite initially opposing repeal—based upon the substantial increase in construction employment that resulted from the decrease in the cost of construction.

 

“It’s a legislative issue for the trial lawyers, but not necessarily for organized labor at this time. If the construction industry does well, our members do well and this is going to erode that relationship.” — Dennis Gannon, Past President of the Chicago Federation of Labor

• Currently, 39 states allow for filing of both a general liability and workers compensation claim for a jobsite injury. None of them treat gravity related injuries differently than other workplace injuries, as New York presently does. Rather, comparative negligence applies.

• There are currently 11 states which treat workers compensation as the sole remedy for a workplace injury and bar an injured worker from filing a general liability claim against a general contractor or owner except under very limited circumstances.

• Reforming the Scaffold Law along the lines of the current Gallivan/Morelle bill (S.111/A.3104) by introducing comparative negligence would bring New York State more or less in line with 39 other states but would not go as far as the 11 states that generally treat workers compensation as the sole remedy.
  

THE SCAFFOLD LAW:

DEVASTATING THE LIABILITY INSURANCE MARKET FOR CONSTRUCTION IN NEW YORK

 

• • The frequent and increasingly large losses resulting from the Scaffold Law have set in motion a series of costly and difficult changes in the insurance market, at best substantially increasing liability insurance costs for construction and in some cases drawing into question the very availability of suitable coverage.

• A number of major national general liability carriers currently do not write coverage for construction in New York, and others have recently either restricted their involvement in the market or exited—with Scaffold Law exposure cited as the number one reason. As one expert put it, the Scaffold Law has resulted in a “massive withdrawal of underwriters” from the construction market for insurance in New York.

• As the market for liability insurance for construction hardens and shrinks, some contractors are being pushed to the non-admitted lines for coverage, where exclusions on coverage over three stories of elevation or even out-right Scaffold Law exclusions are being seen. That’s akin to a car insurance policy that covers you—unless you have an accident.

• If you cannot insure a project, you can’t build that project. And, the higher your insurance costs for projects, quite simply, the less both public and private owners can build.

• These changes in the insurance market have a particularly dire impact on MWBE contractors, who, as typically smaller firms, generally have less ability to absorb rapidly increasing costs or secure coverage in an increasingly difficult liability insurance market.

• The following letter from Willis and Article from AM Best explain in more detail many of the adverse changes being seen in the insurance market for construction as a result of the Scaffold Law.

January 31, 2013

 

Shari F. Natovitz

Senior Vice President, Risk Management

 Silverstein Properties, Inc.

7 World Trade Center

250 Greenwich Street

New York, NY 10007

 

Christopher Jaskiewicz

Chief Operating Officer

Gotham Organization, Inc.

1010 Avenue of the Americas, 4th Floor

New York, NY 10018

 

Re: Labor Law 240 (1) Reform

 

Dear Shari and Chris:

 

Thank you for allowing us to participate in the REBNY Owner/Contractor 240 Labor Law Reform Committee. It’s with great pleasure that we respond to your list of questions/information requests below:

 

1. Results attributable to Labor Law In NYC which can be isolated by looking at the GL/Excess losses for your largest projects over the past 5 years (including development) vs. similar projects in NJ, Conn. and All Other States where available.

 

Willis Response: Attached you will find a copy of our recently created actuarial study which consists of seven (7) of our largest Wrap-Up (OCIP) projects in NYC. This study compares the claim results for these projects against Industry Standard Countrywide. We call your attention to Appendix B, Exhibit IV which provides the detailed results and trends attributed to the rise in Labor Law claims.

 

We have also included an internal study that compares General Liability (GL) rates for New York and New Jersey, broken down by NCCI Class Code. In summary, you’ll find that New York’s GL rates are approximately 300% higher than those in New Jersey.

 

1. Projection and actual incremental premium and deductibles that have been imposed on contractors/owners as a result of Labor Law 240, Cost today of a Major Project in NYC vs. NJ.

 

Willis Response: Changes we have seen in the New York construction insurance marketplace in 2012 pursuant to Labor Law are as follows:

 

PRACTICE POLICIES

 

• 10-50% premium increases
• Minimum Primary GL limits increased to $2M/$4M/$4M, with some carriers requiring $5M/$10M/$10M
• Many smaller coverage placements have been forced into the wholesale marketplace

 

Wrap- Ups / Owner Controlled Insurance Programs (OCIPs)

 

• Maximum OCIP rates have increased to almost double of what we were seeing last year
• Standard Primary GL limits of $2M/$4M/$4M are no longer acceptable for an attachment point for lead Umbrella/Excess carriers
• Initially, the required underlying limits increased to $3M/$5M/$5M then quickly increased to $5M/$10M/$10M
• Most carriers can provide limits of $3M/$5M/$5M but have difficulty getting the reinsurance support to quote $5M/$10M/$10M
• Buffer quotes/layers can fit gaps but can be very expensive and few carriers offer this option
• Deductibles increased from $250K WC/$500K GL to $500K WC and $750K to $2M for GL

 

Contractor Controlled Insurance Programs (CCIPs)

 

• We have not seen CCIP rates increase at the same rate as stand-alone OCIPs. Some contractors are still putting all their projects under their rolling programs which can drive down the overall program rate.
• Select insurance carriers continue to be willing to write CCIPs with NY exposures and these rates tend to be more competitive verses stand-alone OCIPs. However, we see this differential shifting in New York on upcoming CCIP renewals given the developments and increased concern over New York Labor Law.

 

1. Any information regarding the increase in the cost of individual claims due to the Labor Law 240 (i.e. the average claim that has hit excess policy was $4M, whereas 10 years ago it was $1M.)

 

Willis Response: We continue to have ongoing dialogue with our major trading partners regarding the development of claims due to Labor Law. Below summarizes their most recent input as to the increased cost of individual claims as a result of Labor Law 240 (1) and the specific factors driving those increases:

 

1 – Trends in NYC losses – Driven by Labor Law 240 claims / awards

 

2 – Increase in the Payroll Limitation / Weekly payroll cap

 

Trends in NYC losses

 

Every carrier with experience writing Wrap-Ups in New York is of the opinion that the losses in New York have been trending higher. A GL loss analysis of expired NYC- projects from 2006 through 2010 found the following:

 

The above exhibit is based on approximately $290M in trended actual payroll exposure. This analysis does not include current/active project data but the assumption is that the developed loss rates will be close to the 2010 numbers, maybe in between the 2009-2010 figures – based on the claims carriers are currently experiencing.

 

Of the Total Incurred – UNDEVELOPED – GL loss dollars during this time, capped at $2,000,000 (the traditional per occurrence limit):

 

• 50.5% of the total incurred are loss dollars excess of $250,000
• 38.6% of the total incurred are loss dollars excess of $500,000
• 20.9% of the total incurred are loss dollars excess of $1,000,000

 

With respect to a claim count comparison (undeveloped losses):

 

• 7.9% of claims have a total incurred of at least $250,000
• 6.7% of claims have a total incurred of at least $500,000
• 3.75% of claims have a total incurred of at least $1,000,000

 

Of the GL claims excess of $1,000,000, 78% are Labor Law 240(1) claims.

 

Carriers do not attribute the above mentioned trends to jobsites having become less safe. The loss trend is up and LL240 is the culprit. One contributing factor appears to be a broadening of some courts’ interpretation of LL240 in recent cases, and higher award amounts being given. Some may look to a bad construction economy playing a role, with jobs winding down and no future work, it calls into question the validity of some injuries. Carriers have seen an up-tick in WC claims towards the end of a project. With LL240(1) being an absolute liability, there is limited defense for an owner or general contractor. Some carriers believe if the law was amended for comparative negligence, we would see the award amounts decrease significantly.

 

Increase in the NY Payroll Limitation

 

Some carriers, not all, conduct GL manual ratings and develop loss picks on those ratings based on the estimated limited / capped payroll on a given project In the early and mid- 2000’s, most brokers and carriers were using a 59-60% cap on the unlimited payroll. But since the weekly payroll cap has increased each year since 2008, brokers and carriers have increased the estimated cap from anywhere from 85% – 95% of late, and in some cases no limitation at all.

 

This means – with all else being equal – unlimited payrolls are staying the same, but limited are increasing. As a result, increasing loss selections in the underwriting process (as well as NYS WC Surcharges).

 

Depending on how any one given underwriter determines loss selections, even if there was no concern with LL240, rates would increase naturally, if that underwriter historically determined loss selections on limited payroll amounts.

• A history of the General Liability Deductibles showing the increase over the past ten years

 

Willis Response: Considering our project data and past program structures through the last decade or so, premium and deductible increases can be summarized as follows:

 

• In 2000 we saw a willingness from the markets to write guaranteed cost coverage on New York projects or they were apply retentions of $250,000 on Workers’ Compensation and retentions of $250,000 on General Liability. The maximum rates for the primary WC/GL were under 4% of Construction Value (CV) and limits were $2M/$4M/$4M.
• From 2001 forward until the economy turned in 2008, deductibles were typically $250,000 on Workers Compensation and moved to $500,000 on General Liability. Maximum costs for primary GL/WC were between 4-5% of CV depending on the project size and scope. General Liability limits remained at $2M/$4M/$4M.
• The most drastic changes to program structures occurred in late 2011 / early 2012 as construction began to pick back up and umbrella/excess carriers began demanding higher attachment points on the underlying primary GL. During the stalled economy, primary GL carriers had an opportunity to take a good look at the results of their New York construction book of business and the impact of Labor Law verdicts. As a result, GL deductibles were increased from the typical $500,000 to $750,000 to $1,500,000. Maximum primary WC/GL costs increased close to 6% of CV. GL limits increased to at least $3M/$5M/$5M to satisfy Excess attachments.

• A summary of Workers Compensation Benefits that workers in NY are currently receiving (i.e. medical, loss of wages) as compared to other states.

 

Willis Response: Below is a summary of NY Workers’ Compensation Benefits

 

Indemnity Benefits:

 

• The injured worker is eligible to receive indemnity benefits if their work related injury caused lost time of more than seven days missed from work and if they have medical evidence of proving an inability to work. This rate is based on 2/3^5 of their average weekly wage at the time the accident occurred.
• The NY State max workers’ compensation rate is $792.07/week, based on the NY State average weekly wage of $1,188.10. This rate is set by the Department of Labor on July 1st of every year.
• The NY State minimum rate for workers’ compensation benefits is $100.00/week.
• If the injured workers’ death was as a result of his work related activity, his family may be entitled to his/her benefits at the max compensation rate of $792.07. The worker’s spouse may petition for benefits and is entitled to death benefits until she dies or remarries. If the worker had dependents, they would be eligible to receive a percentage of the max rate until they are 18 years’ old or if enrolled in college, until they graduate from college or until they turn 23 years’ old.
• If the worker died as a result of a work related accident, does not have a spouse, and/or dependents, the insurance carrier/employer will be ordered to make a $50,000.00 deposit to the Aggregate Trust Fund of NY.

 

Medical Benefits:

 

• The injured worker is entitled to receive free medical care for any and all injuries that results from a work related accident.
• The injured worker will receive unlimited access to medical care unless their case is legally closed by a law judge at the workers’ compensation board.
• The insurance carrier cannot direct care, but can require medical vendors to provide diagnostic testing and pharmacy usage to the injured worker.
• Claims involving the shoulder, knee, back, and/or neck, can fall within the Medical Treatment Guidelines if the chosen insurance carrier has opted into the program. If applicable, claims involving the previously mentioned body parts would have treatment based off of the Medical Treatment Guidelines.

 

Additional/Misc. Benefits:

 

• An injured worker can request that their mileage and transportation costs as a result of the work related accident be reimbursed by the insurance carrier.
• If an injured worker can show medical documentation supporting their inability to take care of household needs, they can petition the workers’ compensation board for a home health aide and/or a housecleaner.
• Personal objects including rings, clothing, glasses, etc. that were damaged as a result of their work related accident and injury, can be reimbursed.

• Listing of which states, like NY, do not allow for directed medical and why that is important

 

Willis Response: Please see the attached Choice of Physician Table showing which party (Employer or Employee) has the right to choose whom the Injured Worker can treat with in the event of a work related injury. As you will note, many large states allow for directed treatment such as New Jersey, California, Florida and North Carolina. Similarly, other states allow for directed treatment under the auspices of a Preferred Provider Organization (PPO) or a Managed Care Program (MCP) where providers are selected from within a panel of qualified specialists.

 

This is important because the high cost associated with Workers’ Compensation becomes a major cost driver of corresponding Labor Law 240 claim. As time off work due to a disabling injury increases, so do injury-related costs such as indemnity payments, medical and legal expenses and employee costs. Most of these issues are not evident in states where the employer and insurance carrier have the right to direct treatment for injured workers.

 

A Contractor generally receives the benefits of better control over medical treatment and costs, a more efficient return to work program and less adjudication costs. Once an injured worker participates in the program, they generally discover additional benefits such as swifter resolution of their claims, enhanced access to medical treatment/services and a reduced need for the litigation process.

• Any insight into safety impact resulting from eliminating the scaffolding act in Illinois would be of great help.

 

Willis Response: Please see the attached documents which clearly show the following since the repeal of the Structural Work Act in 1995:

 

• Number of Construction Job rose by 25%
• Decrease in Workplace Fatalities by 30% over a six year soon
• Overall worker injury  rate decreased by 53% giving Illinois the 10th lowest injury rate in the country
• There has been a steady decline of Fatal Occupational Injuries since the repeal through 2009.

 

Please feel free to reach out to the undersigned directly if you have any questions or comments about any of the information above.

 

We look forward to continuing to work with you towards meaningful and lasting reform to this archaic statute.

 

Sincerely,

 

Mark Theriault & Timothy Walker

Willis of New York, Inc.

New York Construction Practice

Mass Withdrawal of Construction Liability Writers in NY Traced

Back to Scaffold Law

Wednesday, October 3,2012

By Meg Green, senior associate editor

 

New York is plagued by high premiums and the flight from the state by construction liability insurers due in part to a law that’s been on the books in the state since 1885, experts said.

 

Under section 240 of the state’s labor law, also called the New York “scaffold law,” any worker who falls and is injured is not only eligible to receive workers’ compensation benefits, but also can sue the developer or owner, who is considered liable even if the worker was at fault.

 

“There are very few defenses. It is basically bring your check book,” said Maureen Caviston, president of Partners Specialty Group and a former NAPSLO president. “You can rectify some of the problem with ride management, contracts and risk transfer, but in the five boroughs, the legal environment is very difficult for insurers,” she said during a Best’s Review webinar on surplus lines.

 

It’s resulted in a “massive withdrawal of underwriters” from the New York construction liability market, said David Bresnahan, president of Lexington Insurance Co. And as a result, general liability premiums in New York, especially New York City, are among the highest in the nation.

 

“It’s a tough market,” said Gary Henning of the American Insurance Association’s Albany office. Construction contractors, especially those working on bridges, are impacted by the law, but so are home builders.

 

The scaffold law was enacted long before the Occupational Safety and Health Administration and workers’ compensation programs were enacted to protect injured workers. “Back in the 1880s, the rationale for the law made sense,” Henning said. “It was an extra standard of care for the workers, and the absolute liability from falls from heights.”

 

But with the advent of workers’ comp, which compensates injured employees for both lost wages and medical expenses, the scaffold law is no longer necessary, he said. “It’s now an outdated law,” Henning said.

 

Illinois had an almost identical law until it was repealed in 1995. Five years later, the number of construction jobs had risen 25% and construction fatalities had dropped by 30% in Illinois, according to scaffoldlaw.org, a project of the Lawsuit Reform Alliance of New York.

 

“New York is the only state in the nation with a scaffold law on the books, making employers absolutely liable when a worker is hurt on a job site. It doesn’t matter if the worker is drunk, high or not using the safety equipment provided to them; the employer is completely responsible for the injury,” said Ellen Melchionni, president of the New York Insurance Association.

 

“Frivolous lawsuits are out of control in New York and need to be reined in. Reforming or ideally repealing the scaffold law would be a great start,” she said.

 

Republican New York state Sen. Patrick M. Gallivan and Assemblyman Joseph Morelle sponsored legislation to repeal the law earlier this year, but the bills never gained traction.

 

“I guarantee this will come up again; it has every year,” said Matthew F. Guilbault, director of government and industry affairs for the Professional Insurance Agents of NY, NJ, NH and CT.

 

Ten years ago, the average liability loss costs in New York City were 500% higher than the loss costs in seven other states: Pennsylvania, Virginia, Georgia, South Carolina, Ohio, Massachusetts and North Carolina combined, according to a study by the ALA.. For New York state, outside of New York City, the loss costs averaged 232% more than the other states. The study indicated the only difference between New York and the other states was the Scaffold Act, which accounted for one third of the cost differentials (Best’s Review, July 2003).

 

But tort reform in New York is a difficult battle because the “plaintiffs’ bar is a very influential interest group in New York,” Henning said. “They will fight tooth and nail to preserve this law.”

 

The scaffold law is not just an issue for insurers. Taxpayers have to pay more for public projects due to increased liability insurance costs, and the scaffold law adds $10,000 to the cost to build a new home.

 

The Lawsuit Reform Alliance of New York estimates the scaffold law is responsible for about $100 million in additional liability costs for the Tappan Zee Bridge replacement project, a $5.2 billion project that received federal approval earlier this week.

 

“Taxpayers, homeowners, businesses all pay extra because of this outdated law that isn’t going to be changed because it’s a gravy train for the plaintiffs’ bar, “Henning said.

SCAFFOLD LAW IMPACT:

NYC SCHOOL CONSTRUCTION AUTHORITY (SCA)

 

Currently the New York City School Construction Authority (SCA) operates a wrap-up insurance program, at a cost of $100 million annually.

 

Although their number of claims has actually decreased in the current program, the dollar value of individual claims has increased, as has been the industry-wide trend with Scaffold Law claims.

 

As a result, the SCA’s carrier has sought to end the current wrap-up program early and has indicated uncertainty about participating in a new program going forward. However, the agency was advised that if there were to be a new program, premium would be in the $125 million range annually—a 25% increase.

 

It is also important to note that the SCA’s current insurance program is an important component of their highly successful MWBE mentor program. If their current insurance program were to end, it is highly likely that their MWBE mentor program would, too. Were that to happen, many of the MWBE firms that rely on the current program could well go out of business.

 

At the same time, if the SCA were to construct their program in New Jersey—where labor and material costs are very comparable and the major variable is no Scaffold Law—their insurance costs would be approximately $25 million for the same term. That is, the total cost of insurance coverage for their program in New Jersey is equal to the likely increase moving forward, if the SCA is able to secure a renewal for their wrap-up program. The Scaffold Law is costing the SCA an extra $75-100 million a year in insurance costs.

 

“We could build another two or three schools a year for all the extra money we’re spending on insurance— Ross Holden, Vice President and General Counsel, NYC School Construction Authority1

 

SCAFFOLD LAW IMPACT:

METROPOLITAN TRANSPORTATION AUTHORITY (MTA)

 

MTA began using an owner controlled insurance program (OCIP) in 1998. The primary driver was an expectation in cost savings due to economies of scale in the purchase of insurance. Over the past 15 years, the primary reason for using OCIP has changed to managing the financial risk to the MTA as it relates to contractor injuries. The reason for this change is the increased scope and application of Labor Law that has resulted from Appellate rulings and case law history. This has placed a burden of absolute liability on the MTA for many contractor injuries despite having no control over the workers means, methods, or actions.

 

The attached chart shows the program results for OCIP on some of their older programs and the current status of some of their newer programs. The programs awarded after 2006 should be considered green as the majority of the Labor Law cases have not been settled and their full financial impact will not be known for some time.

 

The MTA has been aggressively implementing safety programs and has stepped up its monitoring and enforcement of safety rules with the contractors hired to perform work on the system. Through this best in class safety effort, the frequency of claims per $100,000,000 constructed has been cut by two thirds and MTA continues to try and drive down the rate of accidents.

 

Despite these significant safety efforts, the average cost of a Labor Law claim that was steadily declining is now increasing. This is not due to a change in safety but due to changes in the law. The continued expansion of the scope of the law by Appellate decision has created an atmosphere of fear with the insurance community and they now prefer to settle claims at higher numbers instead of risking further expansion of the statutes through jury verdicts and failed appeals. Plaintiff attorneys have sensed this fear and now begin negotiations with exorbitant demands. The average cost of a Labor Law case is now over $450,000. 

 

The impact of these increasing costs is being reflected in MTA’s insurance rates and retentions. MTA’s most recent procurement required them to self-insure for the first $1,500,000 of each Labor Law case. The norm used to be $500,000. The insurance industry is basically washing their hands of the majority of the cases and placing this risk on the owners and contractors. The excess liability carriers have also responded by more than tripling the rates, halving the limits, and requiring a higher attachment point of $3 million per claim and $5 million in the aggregate when a $2 million per occurrence and $4 million aggregate was the norm.

 

Without legislative change, the MTA fears this will only get worse and drive up construction costs for the agency.

 

Source: MTA and Marsh.

 

METROPOLITAN TRANSPORTATION AUTHORITY

OWNER CONTROLLED INSURANCE PROGRAM (OCIP)

HISTORICAL LABOR LAW CLAIM DATA

 

MTA OWNER CONTROLLED INSURANCE PROGRAM	GENERAL LIABIUTY(GL) POLICY PERIOD	PRIMARY GL LIMITS	3RD. PARTY CONSTRUCTION VALUE (CV)	SELF INSURED RETENTION	LABOR LAW(LL) CLAIMS	LL CLAIMS INCURRED*	LL CLAIMS % 3RD PARTY CV	EXCESS LIABILITY LIMITS	EXCESS LIABILITY PREMIUM	EXCESS LIABILITY PREMIUM % OF CV	LL & EXCESS %CV
STATIONS 98	12/1/98-12/1/04	2M/4M/4M	$432,279,000	$0	28	$10,639,165	2.46%	$50,000,000	$585,000	0.14%	2.60%
STRUCTURES 99	3/1/99-3/1/04	2M/4M/4M	$230,000,000	$500,000	21	$11,000,108	4.78%	$50,000,000	$250,000	0.11%	4.89%
ESA	4/1/99-4/1/10	2M/4M/4M	$2,200,000,000	$500,000	20	$6,116,416	0.28%	$50,000,000	$2,373,000	0.11%	0.39%
STATIONS 2000	10/1/00-10/1/08	2M/4M/4M	$1,200,000,000	$250,000	30	$9,396,757	0.78%	$50,000,000	$1,570,000	0.13%	0.91%
STRUCTURES 2000	10/1/00-10/1/08	2M/4M/4M	$2,800,000,000	$500,000	65	$14,383,391	0.51%	$50,000,000	$3,S36,000	0.13%	0.64%
LIRR/MNR 2000-04	10/1/00-10/1/08	2M/4M/4M	$400,000,000	$500,000	11	$3,655,551	0.91%	$50,000,000	$796,000	0.20%	1.11%
LIRR/MNR 2005-09	6/1/06-6/1/14	2M/4M/4M	$592,512,297	$500,000	16	$4,131,362	0.70%	$25,000,000	$3,800,000	0.64%	1.34%
NYCT 2005-09	8/1/06-8/1/14	2M/4M/4M	$3,200,000,000	$500,000	65	$28,444,008	0.89%	$25,000,000	$9,841,538	0.31%	1.20%
2nd. AVE. SUBWAY	1/31/07-1/31/15	2M/4M/4M	$2,526,000,000	$500,000	27	$4,278,974	0.17%	$25,000,000	$13,500,500	0.53%	0.70%
2010-2014 OCIP	11/1/12-11/1/18	3M/5M/5M	$2,200,000,000	$1,500,000	N/A	N/A	N/A	$25,000,000	$14,786,310	0.67%
Total Average			$13,880,791,297		283	$92,045,732	0.68%		$36,252,038		0.94%

*Incurred costs are capped at the primary limits. Costs of cases that settle for over $2 million are not Included.

 

Labor Law Impacts:

 

Primary Insurance markets are responding to the ever Increasing costs of Labor Law claims and the continued broadening of the scope and application of the statutes though a number underwriting tactics. First, the rates on primary liability policies have more than doubled in the past ten years. Secondly, the self-insured retention under these polices has Increased dramatically. GL retentions of $1 million or greater are now the norm. Thirdly, owners are being asked to purchase higher primary limits as excess liability carriers are not interested in managing “routine” claims. Finally, some carriers are writing policies with contractual liability exclusions that prevent the flow down of Indemnification from owner to contractor to subcontractor. This will greatly Impact the public sector contracts where It will be difficult to determine If these exclusions exist on contractor polices and the deep pocket of the public is tapped to cover uninsured losses.

 

Excess Insurance carriers are raising their attachment points requiring higher primary limits or the purchase of a buffer layer. Most excess underwriters are unwilling to attach below $5 million and many are not willing to participate below $10 million. The price of excess liability coverage has Increased three to five fold and the limits offered have been reduced.

 

When the MTA began using Owner Controlled Insurance In the late 1990’s, the total cost to Insure a portfolio of contracts was Just under 4% of the total cost of the 3rd party construction value. In our most recent procurement these costs were over 7% of CV and coverage was reduced to keep down costs. The total cost of Labor Law on our projects is over $92 million and these costs are green as the majority of the cases in the current programs have yet to settle.

 

SCAFFOLD LAW EXPANDING IN THE COURT ROOM

 

Court decisions have continued to expand the scope of the Scaffold Law, further exacerbating the cost pressures created by this outdated law. Problematic recent decisions include:

 

Runner v. New York Stock Exchange (2009) – Expanded Scope from Elevation Related’ to ‘Gravity Related’

 

In Runner v. NYSE, a worker was injured when a heavy reel of cable rolled down a short flight of stairs as he and his coworkers attempted to move it using a hoist. The reel had been restrained by a length of rope which wrapped several times around a secured pipe. The plaintiff and a co-worker held the free end of the rope in order to control the descent of the reel, but the reel began to roll rapidly, pulling the rope and crushing the plaintiff’s hand between the rope and pipe.

 

The plaintiff sought damages under the Scaffold Law, and the trial court agreed that the movement of the reel down the stairs constituted an elevation -related risk, and therefore triggered liability.

 

The case was subsequently appealed to the Court of Appeals, which upheld the lower court’s decision. In upholding the ruling, the court determined that “the relevant inquiry…is rather whether harm flows directly from the application of the force of gravity to the object” This decision was a significant departure from the previous inquiry of whether or not the injury was “elevation related.” Following Court of Appeals’ decision in Runner, New York courts broadly interpreted the Scaffold Law as applying to all injuries resulting from the force of gravity. For example, Potter v. Jay E. Potter Limber, Co., 71 A.D.3d 1565, 1566-67 (N.Y. App. Div. 2010); Quarcini, 27Misc. 3d 478 (N.Y. Supp.Ct. Niagara Co. 2010).

 

Wilinski v. 334 East 92nd Housing Development Fund Corp. (2011) – Established ‘Same Height Rule’

 

In Wilinski, the plaintiff was injured when the debris from a brick wall being demolished fell and struck an unsecured vertical 10-foot-tall pipe. The pipe tipped and struck the plaintiff.

 

The Appellate Court granted partial summary judgment to the defendants, noting that since the pipes were on the same level as the plaintiff, the incident was not sufficiently attributable to an elevation differential. This decision cited Misseritti v. Mark IV Construction Co. in which the Court of Appeals refused to apply liability for a worker killed by a collapsing wall, because of the absence of a significant elevation differential. This “same level” rule was a well-recognized defense against liability under the Scaffold Law.

 

In Wilinski, the Court of Appeals overturned the Appellate Court decision and rejected the “same level” rule as inconsistent with their decision in Runner. The court determined that the injury had “flowed directly from the force of gravity,” and therefore triggered liability under the Scaffold Law. Consequently, in applying liability for a new, broad class of injuries, both Runner and Wilinksi represent significant expansions of the Scaffold Law.

 

“Labor Law § 240 (1), [is] one of the most frequent sources of litigation in the New York courts…As we have long held, it imposes liability even on contractors and owners who had nothing to do with the plaintiffs accident; and where a violation of the statute has caused injury, any fault by the plaintiff contributing to that injury is irrelevant ”

 

— Judge Robert Smith, New York State Court of Appeals. From the decision in Dahar v. Holland Ladder (Feb 2012). Decided 7-0.

 

THE SCAFFOLD LAW:

WHAT WOULD REFORM DO?

• Adding a comparative negligence standard would bring New York in line with 39 other states in terms of how such worksite injuries are handled. The other 11 states have more restrictive standards which aim to make workers compensation the sole remedy for worksite injuries and set a higher bar for civil actions arising from the same.

• Based on the comparison of base loss costs in key construction classes between New York and comparable and neighboring states, one would reasonably expect that reform of the Scaffold Law through a comparative negligence standard would significantly reduce loss costs, bringing them in line with other states. This belief is strongly supported by the comparison of loss costs in the carpentry class, where there is typically relatively little elevation exposure, and where New York is already comparable to other states’ loss costs.

• A reduction of loss costs would plainly result in less exposure, a much more reasonable and rational risk environment, and therefore lower general liability insurance costs for construction. We would expect to see these costs from existing carriers in the New York market to come down over a period of years until they were at a level more comparable to those seen in other states. The actions of the courts in terms of any reform to the Scaffold Law would be closely monitored in this regard by the industry and would either accelerate or decelerate savings. Existing carriers’ costs would also be impacted for a period of time by “Incurred But Not Reported” (IBNR) claims that existed under the prior absolute liability standard of the Scaffold Law.

• The current insurance crisis for construction is not just one of cost, however. It is also one of availability. With reform to a comparative negligence standard, we would expect to see a return to market by a number of major national carriers who currently do not write general liability coverage in New York because of the unreasonable exposure caused by the Scaffold Law, as well as an expansion in the market by other carriers who remain but have limited their activities. Without the burden of IBNR claims under the prior absolute liability standard, one can reasonably assume that carriers returning to the New York market would be able to do so at lower rates. These factors would clearly lead to more options and competition in the insurance market for construction, which would also drive costs down.

• The post-reform experience in Illinois confirms these projections in terms of costs. The Illinois reforms also led to an increase in construction employment and an increase in construction worksite safety.

• There is no evidence, despite claims to the contrary, that the Scaffold Law promotes safety. New York’s constructions injury and fatality rates are on par with other states that do not have an absolute liability standard and which have the benefit of dramatically lower lost costs, and as a result lower insurance premiums and construction costs.

• More construction jobs will be created throughout New York State with Scaffold Law reform—and more will be built. The cost of building just about anything in New York is higher than it would otherwise be without the Scaffold Law, in some cases dramatically so. Both public and private construction dollars are going that less far for actual bricks and mortar as more and more resources are consumed by unnecessary insurance costs driven by the Scaffold Law. As a result, less is being built in New York, and as the crisis shifts from one of insurance costs to the availability of insurance, the very viability of projects is threatened.

• Both union and non-union workers would benefit from the job creation that would result from reform. In New York City, where construction work has historically been predominantly union, recently more and more private work has been built using nonunion labor. Reporting on a recent discussion of this issue by the construction and real estate industries, Crain’s New York Business reported, “The industry is actually arguing that reform would also benefit unionized construction workers by reducing the cost of building and thus creating more projects with more jobs for labor. As it is, the rising costs are pushing contractors and developers to seek non-union workers for jobs, they claim.”

• Our business climate and economic competitiveness would improve, government at every level would save money, and taxpayers would receive much needed relief. School districts, local governments, property taxpayers, small businesses, fanners, homeowners and just about everyone else in our state and our economy would benefit from Scaffold Law reform, as the cost of construction and exposure to costly lawsuits was reduced. Whether it be a school district building a new school, a county constructing a new municipal building, or a farmer erecting a new bam, it costs significantly more to build it in New York because of the Scaffold law—and that’s just if you’re lucky. For owners, public or private, who end up with a Scaffold Law case under the current law, the costs are astronomically higher—and their ability to defend themselves virtually non-existent under the absolute liability standard. With reform, state taxpayers and local property taxpayers would pay less for public construction projects, and we could rebuild more schools, roads and bridges. Local governments and school districts would see much needed cost relief as they work to live within the Governor’s Property Tax Cap. Homeowners who build a home would see their costs go down. Businesses would see their costs reduced when they build, and New York’s second highest in the nation cost of doing business would be pushed in the right direction.

THE SCAFFOLD LAW:

SENDING NEW YORK’S CONSTRUCTION

BASE LOSS COSTS INTO THE STRATOSPHERE

• The following chart and tables of data from the ISO, the property/casualty insurance industry’s leading supplier of statistical, actuarial, underwriting and claims data, starkly demonstrate that New York’s base loss costs are at least double the next closest comparable state in nearly every key construction class.

 

• Interestingly, only in carpentry (class code 91342), are New York’s loss costs largely on par with those of other states. In fact, Connecticut slightly exceeds New York. This is very notable because carpentry is the class in which one would see the least elevation exposure.

 

• This marked difference in this particular class for New York is extremely significant, as it strongly indicates that, except for the impact of the Scaffold Law, in other classes where elevation is prevalent our loss costs would be much more in line with comparable states.

 

ISO Bass Loss Costs

Key Constructions Classes

 

Class Code Description

91265 Bridge or Elevated Highway Construction – iron or steel

91342 Carpentry – not otherwise classified

91560 Concrete Construction

97447 Masonry

97655 Metal Erection – structural – not otherwise classified

98303 Painting – exterior – buildings or structures – exceeding three stories in height – not otherwise classified

98309 Painting – steel structures or bridges

98677 Roofing – Residential over three stories and/or commercial

99315 Street or Road Construction or Reconstruction

 

State	Territory		91265		91342		91660		97447		97655		98303		98309		98677		89315
NY	Median		136.00		17.06		39.75		18.30		41.75		95.00		47.75		69.10		40.66
NJ		Median		56.60		12.40		17.10		7.88		18.00		40.90		20.60		42.70		25.10
		Variance from NY		-57%		-27%		-57%		-57%		-57%		-57%		-57%		-38%		-38%
CT		Median		45.10		17 80		13.20		6.07		13.90		31.50		15.80		36.60		21.50
		Variance from NY		-67%		4%		-67%		-67%		-67%		-67%		-67%		-47%		-47%
PA		Median		48.50		12.80		14.20		6.53		14.90		33.90		17.00		38.00		22.40
		Variance from NY		-64%		-25%		-64%		-64%		-64%		-64%		-64%		-45%		-45%
CA		Median		36.80		14.90		10.80		4.95		11.30		25.70		12.90		40.60		23.90
		Variance from NY		-73%		-13%		-73%		-73%		-73%		-73%		-73%		-41%		-41%
IL		Median		42.30		10.50		12.40		5.70		13.00		29.60		14.80		38.60		21.50
		Variance from NY		-69%		-38%		-69%		-69%		-69%		-69%		-89%		-47%		-47%
FL		Median		27.40		7.41		8.01		3.69		8.42		19.20		9.62		36.50		21.40
		Variance from NY		-80%		-57%		-80%		-80%		-80%		-80%		-80%		-47%		-47%
TX		Median		23.50		4.89		6.86		3.15		7.20		16.40		8.23		29.30		17.20
		Variance from NY		-83%		-71%		-83%		-83%		-83%		-83%		-83%		-58%		-58%
OH		Median		19.60		4.68		5.72		2.83		6.00		13.70		6.86		17.80		10.50
		Variance from NY		-86%		-73%		-86%		-86%		-86%		-86%		-36%		-74%		-74%
MA		Median		40.00		6.98		11.70		5.38		12.30		27.90		14.00		31.80		18.70
		Variance from NY		-71%		-59%		-71%		-71%		-71%		-71%		-71%		-54%		-54%

ISO Base Loss Costs

Key Constructions Classes

 

Class Code Description

91265 Bridge or Elevated Highway Construction – Iron or steel 91342 Carpentry – not otherwise classified

61560 Concrete Construction

97447 Masonry

97655 Metal Erection – structural – not otherwise classified

96303 Painting – exterior – buildings or structures – exceeding three stories in height – not otherwise classified

98309 Painting – steel structures or bridges

98677 Rooting – Residential over three stories and/or commercial

99316 Street or Road Construction or Reconstruction

 

State	Territory	91265	91342	91560	97447	97655	98303	98309	98677	99316
NY	1	277.00	30.00	80 90	37.20	84.90	193.00	97.10	128.00	75.20
NY	2	142.00	17.30	41.40	19.00	43.50	99.00	49.70	73.10	43.00
NY	3	148.00	15.90	43.40	20.00	45.50	104.00	52.10	76.10	44 70
NY	4	134.00	20.70	39.10	18.00	41.10	93.50	47.00	63.90	37.80
NY	5	155.00	18.90	45.40	20.90	47.70	109.00	54.50	88.50	52.00
NY	6	156.00	18.20	45.60	21.00	47.80	109.00	54.70	71.70	42.20
NY	7	142.00	17.10	41.60	19.10	43.70	99.40	49.90	63.20	37.20
NY	8	138.00	14.90	40.40	18.60	42.40	96.50	48.50	67.20	39.50
NY	9	127.00	17.60	37.10	17.10	38.90	88.60	44.50	76.40	44.90
NY	10	133.00	15.60	38.80	17.80	40.70	92.60	46.50	61.60	38.20
NY	12	120.00	15 90	35.00	16.10	36.70	83.60	42.00	74.70	43.90
NY	14	119.00	17.90	34.90	16.00	36.60	83.30	41.80	62.40	36.70
NY	16	103.00	17.00	30.10	13.80	31.60	71.80	36.10	67.00	39.40
NY	17	98.40	16.20	28.80	13.20	30.20	88.80	34,50	63.50	37.40
NY	18	140.00	16.90	40.80	18.80	42.90	97.60	49.00	72.70	42.70
NY	20	132.00	16.50	38.80	17.80	40.50	92.30	48.30	63.20	37.10
NY	21	138.00	19.10	40.40	18.60	42.40	98.60	48.50	67.90	39.90
NY	22	127.00	16.00	37.20	17.10	39.X	88.80	44.60	78.70	46.30
NY	23	158.00	18.60	46.10	21.20	48.40	110.00	55.30	87.10	39.40
NY	24	84.10	18.30	24.60	11.30	25.80	58.80	29.50	70.30	41.40

 

Median

136.00

17.05

39.75

18.30

41.75

95.00

47.75

69.10

40.65

 

Min	84.10	14.90	24.60	11.30	25.80	58.80	29.50	61.60	36.20
Max	277.00	30.00	80.90	37.20	84.90	193.00	97.10	128.00	75.20

 

State	Territory	91266	91342	91560	97447	97655	98303	98308	98677	99315
NJ	1	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	2	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	3	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	4	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	5	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	6	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	7	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	8	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42 70	25.10
NJ	9	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	11	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	12	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	13	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	15	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	16	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10
NJ	17	58.60	12.40	17.10	7.88	18.00	40.90	20.60	42.70	25.10

 

Median

58.60

12.40

17.10

7.88

18.00

40.90

20.60

42.70

25.10

 

Median variance from NY 57%|

-27% -57%

-57%

-57%-57%

-57%-38%

-38%

 

State	Territory	91265	91342	91560	97447	97655	98309	98309	98677	99316
CT	1	45.10	17.80	13.20	6.07	13.90	31.50	15.80	36.60	21.50
CT	3	45.10	17.80	13.20	6.07	13.90	31.50	15.80	36.60	21.50
CT	4	45.10	17.80	13.20	6.07	13.90	31.50	15.80	36.60	21.50
CT	5	45.10	17.80	13.20	6.07	13.90	31.50	15.B0	36.60	21.50
CT	6	45.10	17.80	13.20	6.07	13.90	31.50	15.80	36.60	21.50
CT	7	45.10	17.80	13.20	6.07	13.90	31.50	15.80	36.60	21.50
CT	8	45.10	17.80	13.20	6.07	13.90	31.50	15.80	36.80	21.50
CT	9	45.10	17.80	13.20	6.07	13.90	31.50	15.80	36.60	21.50

 

Median

45.10

17.80

13.20

6.07

13.90

31.50

15.80

36.60

21.50

 

Median variance from NY

-67%

4%

-67%

-67%

-67%

-67%

-67%

-47%

-47%

ISO Base Loss Costs

Key Constructions Classes

 

Class Code Description

91265 Bridge or Elevated Highway Construction – iron or steel

91342 Carpentry – not otherwise classified

91560 Concrete Construction

97447 Masonry

97655 Metal Erection – structural – not otherwise classified

98303 Painting – exterior – buildings or structures – exceeding three stories in height – not otherwise classified

98309 Painting – steel structures or bridges

98677 Roofing – Residential over three stories and/or commercial

99315 Street or Road Construction or Reconstruction

 

State	Territory	91265	91342	91560	97447	97655	98303	96309	96677	99316
NY	1	277.00	30.00	80.90	37.20	84.90	193.00	97.10	128.00	75.20
NY	2	142.00	17.30	41.40	19.00	43.50	99.00	48.70	73.10	43.00
NY	3	148.00	15.90	43.40	20.00	45.50	104.00	52.10	76.10	44.70
NY	4	134.00	20.70	39.10	18.00	41.10	93.50	47.00	83.90	37.60
NY	5	155.00	18.90	45.40	20.90	47.70	109.00	54.50	88.50	52.00
NY	6	156.00	18.20	45.60	21.00	47.80	109.00	54.70	71.70	42.20
NY	7	142.00	17.10	41.60	19.10	43.70	99.40	49.90	63.20	37.20
NY	8	138.00	14.90	40.40	18.60	42.40	96.50	48.50	67.20	39.50
NY	9	127.00	17.60	37.10	17.10	38.90	88.60	44.50	76.40	44.90
NY	10	133.00	15.60	38.80	17.80	40.70	92.60	46.50	61.60	36.20
NY	12	120.00	15.90	35.00	16.10	36.70	83.60	42.00	74.70	43.90
NY	14	119.00	17.90	34.90	16.00	36.60	83.30	41.80	62.40	36.70
NY	16	103.00	17.00	30.10	13.60	31.60	71.80	36.10	67.00	39.40
NY	17	98.40	16.20	28.80	13.20	30.20	68.80	34.50	63.50	37.40
NY	18	140.00	16.90	40.80	18.80	42.90	97.60	49.00	72.70	42.70
NY	20	132.00	16.50	38.60	17.80	40.50	92.30	46.30	63.20	37.10
NY	21	138.00	19.10	40.40	16.60	42.40	96.60	48.50	87.90	39.90
NY	22	127.00	16.00	37.20	17.10	39.00	88.80	44.60	78.70	46.30
NY	23	158.00	16.60	46.10	21.20	48.40	110.00	55.30	67.10	39.40
NY	24	84.10	18.30	24.60	11.30	25.80	58.80	29.50	70.30	41.40

 

Median

136.00

17.05

39.75

18.30

41.75

95.00

47.75

69.10

40.65

 

Min	84.10	14.90	24.60	11.30	25.80	58.80	29.50	61.60	36.20
Max	277.00	30.00	80.90	37.20	84.90	193.00	97.10	128.00	75.20

 

State	Territory	91265	91342	91560	97447	97666	98303	98309	98677	99315
PA	1	125.00	19.90	36.40	16.80	38.30	87.10	43.70	83.60	49.10
PA	2	46.90	12.50	13.70	6.30	14.40	32.80	16.40	37.60	22.10
PA	3	37.30	13.10	10.90	5.02	11.50	26.00	13.10	37.30	22.00
PA	4	54.90	12.80	16.00	7.38	16.80	38.40	19.30	38.70	22 80
PA	5	34.10	11.80	9.96	4.58	10.50	23.80	12.00	38.00	22.40
PA	7	62.40	20.20	18.30	8.39	19.20	43.60	21.90	63.90	37.60
PA	9	36.60	11.20	10.70	4.93	11.20	25.60	12.80	36.80	21.60
PA	10	51.60	12.30	15.10	6.95	15.90	36.20	18.20	35.90	21.10
PA	11	48.80	14.40	14.20	6.56	14.90	34.10	17.10	47.00	27.70
PA	12	48.50	11.00	14.20	6.53	14.90	33.90	17.00	36.10	21.20
PA	13	42.60	12.90	12.40	5.72	13.10	29.70	15.00	40.50	23.80

 

Median

48.50

12.80

14.20

6.53

14.90

33.90

17.00

38.00

22.40

 

Min	34.10	11.00	9.96	4.58	10.50	23 80	12.00	35.90	21.10
Max	125.00	20.20	36.40	16.80	38.30	87.10	43.70	83.60	49.10

 

Median variance from NY	-64%	-25%	-64%	-64%	-64%	-64%	-64%	-45%	-45%
Max variance from NY	-55%	-33%	-55%	-55%	-55%	-55%	-55%	-35%	-35%

 

State	Territory	91265	91342	91660	97447	97666	98303	98309	96677	99315
CA	1	59.40	15.00	17.40	7.99	18.20	41.50	20.80	47.20	27.80
CA	2	35.00	16.00	10 20	4.71	10.80	24.50	12.30	42.00	24.70
CA	3	44.50	14.90	13.00	5.99	13.70	31.10	15.60	40 60	23.90
CA	4	34.10	10.60	9.98	4.59	10.50	23.80	12.00	33.40	19.70
CA	5	33.20	11.10	9.71	4.47	10.20	23.20	11.70	32.00	18.80
CA	6	44.90	15.40	13.10	6.03	13.80	31.30	15.70	47.70	28.00
CA	7	52.90	15.40	15.50	7.11	16.20	37.00	18.60	45.90	27.00
CA	9	34.60	10.70	10.10	4.65	10.50	24.20	12.10	36.50	21.50
CA	10	58.50	16.70	17.10	7.88	18.00	40.90	20.50	48.30	28.40
CA	11	36.80	11.60	10.80	4.95	11.30	25.70	12.90	36.10	21.30
CA	12	30.10	9.72	8.80	4.05	9.24	21.00	10.60	30.60	18.00

 

Median

36.80

14.90

10.80

4.95

11.30

25.70

12.60

40.60

23.90

 

Min	30.10	9.72	8.80	4.05	9.24	21.00	10.60	30.60	18.00
Max	59.40	18.00	17.40	7.99	18.20	41.50	20.80	48.30	28.40

 

Median variance from NY	-73%	-13%	-73%	-73%	-73%	-73%	-73%	-41%	-41%
Max variance from NY	-79%	-40%	-78%	-79%	-79%	-78%	-79%	-62%	-62%

ISO Base Loss Costs

Key Constructions Classes

 

Class Code Description

91265 Bridge or Elevated Highway Construction – iron or steel

91342 Carpentry – not otherwise classified

91580 Concrete Construction

97447 Masonry

97655 Metal Erection – structural – not otherwise classified

98303 Painting – exterior-buildings or structures – exceeding three stories in height – not otherwise classified

98309 Painting – steel structures or bridges

98677 Roofing – Residential over three stories and/or commercial

99315 Street or Road Construction or Reconstruction

 

State	Territory	91266	91342	91560	97447	97655	98303	96309	98677	99315
ny	1	277.00	30.00	80.90	37.20	84.90	193.00	97.10	128.00	75.20
ny	2	142.00	17.30	41.40	19.00	43.50	99.00	49.70	73.10	43.00
NY	3	148.00	15.90	43.40	20.00	45.50	104.00	52.10	78.10	44.70
NY	4	134.00	20.70	39.10	18.00	41.10	93.50	47.00	63.90	37.60
NY	5	155.00	16.90	45.40	20.90	47.70	108.00	54.50	88.50	52.00
NY	6	156.00	18.20	45.80	21.00	47.80	109.00	54.70	71.70	42.20
NY	7	142.00	17.10	41.80	19.10	43.70	99.40	49.90	63.20	37.20
NY	8	138.X	14.90	40.40	18.60	42.40	96.50	48.50	67.20	39.50
NY	9	127.00	17.60	37.10	17.10	38 90	88.60	44.50	76.40	44.90
NY	10	133.00	15.60	38.80	17.80	40.70	92.60	46.50	61.60	36.20
NY	12	120.00	15.90	35.00	16.10	36.70	83.60	42.00	74.70	43.90
NY	14	119.00	17.90	34.90	16.00	36.60	83.30	41.80	62.40	36.70
NY	16	103.00	17.00	30.10	13.80	31.60	71.80	36.10	67.00	39.40
NY	17	98.40	16.20	28.80	13.20	30.20	68.80	34.50	63.50	37.40
NY	18	140.00	16.90	40.80	18.80	42.90	97.60	49.00	72.70	42.70
NY	20	132.00	16.50	38.80	17.80	40.50	92.30	46.30	63.20	37.10
NY	21	138.00	19.10	40.40	18.60	42.40	96.60	48.50	67.90	39.90
NY	22	127.00	16.00	37.20	17.10	39.00	88.80	44.60	78.70	46.30
NY	23	158.00	16.60	46.10	21.20	48.40	110.00	55.30	67.10	39.40
NY	24	84.10	18.30	24.60	11.30	25.80	58.60	29.50	70,30	41.40

 

Median

136.00

17.05

38.75

18.30

41.75

95.00

47.75

69.10

40.65

 

Min	84.10	14.90	24.60	11.30	25.80	58.60	29.50	61.60	36.20
Max	277.00	30.00	80.90	37.20	84.90	193.00	97.10	128.00	75.20

 

State	Territory	91265	91342	91560	97447	97666	98303	98309	98677	99316
IL	1	59.30	12.00	17.40	7.98	18.20	41.50	20.80	47.50	27.90
IL	4	29.50	5.32	8.64	3.98	9.07	20.60	10.30	13.50	7.93
IL	6	61.70	10.40	18.00	8.29	19.00	43.10	21.60	34.80	20.50
IL	7	56.60	10.50	18.60	7.61	17.30	39.60	19.80	39.50	23.20
IL	8	36.80	9.08	10.80	4.94	11.30	25.70	12.80	33.20	19.50
IL	9	42.30	10.70	12.40	5.70	13.00	29.60	14.80	38.00	22.30
IL	14	33.10	10.70	9.67	4.45	10.20	23.10	11.80	36.60	21.50

 

Median

42.30

10.50

12.40

5.70

13.00

29.60

14.80

36.60

21.50

 

Min	29.50	5.32	8.64	3.98	9.07	20.60	10.90	13.50	7.93
Max	61.70	12.00	18.00	8.29	19.00	43.10	21.60	47.50	27.90

 

Median variance from NY	-69%	-38%	-89%	-69%	-69%	-69%	-69%	-47%	-47%
Max variance from NY	-78%	-60%	-78%	-78%	-78%	-78%	-78%	-63%	-63%

 

State	Territory	91265	91342	91560	97447	97656	96303	96309	98677	99316
FL	1	27.40	7.41	8.01	3.69	8.42	19.20	9.62	36.50	21.40
FL	2	27.40	7.41	8.01	3.69	8.42	19.20	9.62	36.50	21.40
FL	4	27.40	7.41	8.01	3.69	8.42	19.20	9.62	36.50	21.40
FL	5	27.40	7.41	8.01	3.69	8.42	19.20	9.62	36.50	21.40
FL	6	27.40	7.41	8.01	3.69	8.42	19.20	9.62	36.50	21.40

 

Median

27.40

7.41

8.01

3.69

8.42

19.20

9.62

38.50

21.40

 

Median variance from NY

-60%

-57%

-80%

-80%

-80%

-80%

-80%

-47%

47%

 

State	Territory	91265	91342	91660	97447	97655	96303	98309	96677	99315
TX	1	23.50	4.89	6.86	3.15	7.20	16.40	8.23	29.30	17.20
TX	2	23.50	4.89	6.86	3.15	7.20	16.40	8.23	29.30	17.20
TX	3	23.50	4.89	6.86	3.15	7.20	16.40	8.23	29.30	17.20
TX	4	23.50	4.89	6.66	3.15	7.20	16.40	8.23	29.30	17.20
TX	5	23.50	4.89	6.86	3.15	7.20	16.40	8.23	29.30	17.20
TX	6	23.50	4.89	6.86	3.15	7.20	16.40	8.23	29.30	17.20
TX	7	2330	4.89	6.86	3.15	7.20	16.40	8.23	29.30	17.20
TX	6	23.50	4.89	6.86	3.15	7.20	16.40	8.23	29.30	17.20

 

Median

23.50

4.89

6.86

3.15

7.20

16.40

8.23

29.30

17.20

 

Median variance from NY

-83%

-71%

-83%

-83%

-83%

-83%

-83%

-58% -58%

ISO Base Loss Costs

Key Constructions Classes

 

Class Code Description

91285 Bridge or Elevated Highway Construction – iron or steel

91342 Carpentry – not otherwise classified

91660 Concrete Construction

97447 Masonry

97655 Metal Erection – structural – not otherwise classified

98303 Painting – exterior – buildings or structures – exceeding three stories in height – not otherwise classified

96309 Painting – steel structures or bridges

98877 Roofing – Residential over three stories and/or commercial

99315 Street or Road Construction or Reconstruction

 

State	Territory	91285	91342	91560	97447	97685	98303	98309	98677	99315
NY	1	277.00	30.00	60.90	37.20	84.90	193.00	97.10	128.00	75.20
NY	2	142.00	17.30	41.40	19.00	43.50	99.00	49.70	73.10	43.00
NY	3	148.00	15.90	43.40	20.00	45.50	104.00	52.10	76.10	44.70
NY	4	134.00	20.70	39.10	18.00	41.10	93.50	47.00	83.90	37.80
NY	5	155.00	18.90	45.40	20.90	47.70	109.00	54.50	88.50	52.00
NY	6	156.00	18.20	45.60	21.00	47.80	109.00	54.70	71.70	42.20
NY	7	142.00	17.10	41.60	19.10	43.70	99.40	49.90	53.20	37.20
NY	8	138.00	14.90	40.40	18.60	42.40	96.50	48.50	67.20	39.50
NY	9	127.00	17.60	37.10	17.10	38.90	88.60	44.50	76.40	44.90
NY	10	133.00	15.60	38.80	17.80	40.70	92.60	46.50	61.60	36.20
NY	12	120.00	15.90	35.00	16.10	38.70	83.60	42.00	74.70	43.90
NY	14	119.00	17.90	34.90	16.00	36.80	83.30	41.80	62.40	36.70
NY	16	103.00	17.00 30.10		13.80	31.60	71.80	36.10	67.00	39.40
NY	17	98.40	16.20	28.80	13.20	30.20	68.80	34.50	63.50	37.40
NY	18	140.00	16.90	40.80	18.80	42.90	97.60	49.00	72.70	42.70
NY	20	132.00	16.50	38.60	17.80	40.50	92.30	46.30	63.20	37.10
NY	21	138.00	19.10	40.40	18.60	42.40	96.60	48.50	67.90	39.90
NY	22	127.00	16.00	37.20	17.10	39.X	88.80	44.60	78.70	46.30
NY	23	158.00	18.60	46.10	21.20	48.40	110.00	55.30	87.10	39.40
NY	24	84.10	18.30	24.60	11.30	25.80	58.80	29.50	70.30	41.40

 

Median

136.00

17.05

39.75

18.30

41.75

95.00

47.75

69.10

40.65

 

Min	84.10	14.90	24.60	11.30	25.80	58.80	29.50	61.60	36.20
Max	277.00	30.00	80.90	37.20	84.90	193.00	97.10	128.00	75.20

 

State	Territory	91286	91342	91560	97447	97656	98303	98309	98677	99315
OH	1	19.60	4.68	5.72	2.63	6.00	13.70	6.86	17.80	10.50
OH	2	19.60	4.68	5.72	2.63	6.00	13.70	6.86	17.80	10.50
OH	3	19.60	4.68	5.72	2.63	6.00	13.70	6.86	17.80	10.50
OH	4	19.60	4.68	5.72	2.63	6.00	13.70	6.86	17.80	10.50
OH	5	19.60	4.68	5.72	2.63	6.00	13.70	6.86	17.80	10.50
OH	6	19.60	4.68	5.72	2.63	6.00	13.70	6.86	17.80	10.50
OH	7	19.60	4.68	5.72	2.63	6.00	13.70	6 86	17.80	10.50
OH	8	19.60	4.68	5.72	263	6.00	13.70	6.86	17.80	1050
OH	9	19.60	4.68	5.72	2.63	6.00	13.70	6.86	17.80	10.50
OH	10	19.60	4.68	572	2 63	6.00	13.70	6.86	17.80	10.50

 

Median

19.60

4.68

5.72

2.63

6.00

13.70

6.88

17.80

10.50

 

Median variance from NY

-86%

-73%

-86%

-86%

-86%

-86%

-86%

-74%

-74%

 

State	Territory	91265	91342	915X	97447	97X6	98303	98309	98877	99318
MA	6	40.00	6.98	11.70	5.38	12.30	27.90	14.00	31.80	18.70
MA	7	40.00	6.98	11.70	5.38	12.30	27.90	14.00	31.80	18.70
MA	8	40.00	6.98	11.70	5.38	12.30	27.90	14.00	31.80	18.70
MA	9	40.00	6.98	11.70	5.38	12.30	27.90	14.00	31.80	18.70
MA	10	40.00	6.98	11.70	5.38	12.30	27.90	14.00	31.80	18.70
MA	14	40.00	6.98	11.70	5.38	12.30	27.90	14.00	31.80	18.70
MA	15	40.00	6.98	11.70	5.38	12.30	27.90	14.00	31.80	18.70
MA	16	40.00	6.98	11.70	5.38	12.30	27.90	14.00	31.80	16.70
MA	17	40.00	6.98	11.70	5.38	12.30	27.90	14.00	31.80	18.70

 

Median

40.00

6.96

11.70

5.38

12.30

27.90

14.00

31.80

18.70

 

Median variance from NY

-71%

-59%

-71%

-71%

-71%

-71%

-71%

-54%

-54%

COSTS NOT PROPORTIONAL TO INJURIES

 

• The previous charts show a significantly higher loss cost rate in New York than in other states in every construction class, except for carpentry, which again typically has the least elevation of the construction classes. Why is this? Is construction work at elevation more dangerous in New York than in the other states? Is gravity stronger here? The most recent data available from the Bureau of Labor Statistics clearly say “no.”

 

• With loss costs so substantially higher in every elevation-heavy construction class than in comparable states, we would expect to see substantially higher instances of injuries and fatalities. We do not. They are generally comparable, in some cases better and in some cases worse than states that all have dramatically lower loss costs. This substantial difference and disconnect between actual injury rates and loss costs is attributable to the presence of the Scaffold Law in New York, which invites litigation and leads to large payouts. This data also discredits arguments that the presence of the Scaffold Law leads to safer construction worksites, as we do not see substantially lower rates of injury, either. This demonstrates that the Scaffold Law simply leads to higher loss costs and as a result higher costs for construction in New York.

 

Source: Bureau of Labor Statistics, http://www.bis.gov/iif/state archive htm