Corey Johnson targets Scaffold Law in plan to fix MTA
Posted by 5Boroughs Insurance Agency on
Council Speaker Corey Johnson has targeted a sacred cow in his plan to reform the MTA: New York’s much-maligned Scaffold Law, which critics say boosts insurance costs for transit projects and on other construction in New York State by hundreds of millions of dollars.
The Scaffold Law assigns 100 percent liability on owners and contractors for workplace injuries — without considering whether the worker is at all to blame.
New York is the only state with such a one-sided law, which Johnson says drives up costs to cover negligence suits, according to the Johnson plan.
On average in other states, construction liability insurance accounts for 2 to 3 percent of the cost of a project, while in New York, it runs 7 to 10 percent, according to the Lawsuit Reform Alliance Coalition of New York.
Johnson’s report cited research that said the cost to insure a construction project in New York “is 10 times higher than in other states.”
Other states have a “comparative negligence standard” that determine whether a worker or contractor is at fault. His proposal calls for to revise the Scaffold Law to adopt a similar standard in New York.
The Johnson plan notes that liability insurance costs for the MTA’s East Access Project to link the LIRR to Grand Central has ballooned from $93 million in 2002 to $584 million today, a 557-percent hike, and cited the Scaffold Law as a major factor.
Efforts to revise the law in Albany have gone nowhere because of opposition from the trial lawyers lobby and construction trade unions and their backers in the Legislature.
Labor committee chair Sen. Jessica Ramos (D-Queens) defended the law as pro-safety. “The Scaffold Law is one of the most important protections for construction workers. There’s already a race to the bottom in the construction industry. Weakening the law would give way to developers and contractors cutting corners at the expense of worker safety. The Scaffold Law saves lives,” Ramos said.
But buried in his MTA plan that called for City Hall to run subway and bus service, Johnson said it’s time for a change in the Scaffold Law because the liability insurance costs are too high to ignore.
“Construction by the MTA, and indeed all contracting entities public and private in New York State, is especially expensive because of the high liability costs imposed by Scaffold Law….MTA insurance costs have risen to seven percent of contracted construction value,” Johnson’s report said.
“Navigating this expensive liability, insurance carriers in the construction have either left New York altogether, reducing competition and increasing prices, or have remained while increasing premiums, which are passed on to all contracting entities.”
Advocates for reform applauded Johnson for taking on the issue.“It’s wonderful. More and more progressives are coming out in support of reforming the Scaffold Law,” said Tom Stebbins, director of the Lawsuit Reform Alliance of New York.