New York Scaffold Law Targeted In Lawsuit, Claimed To Drive Up Construction Costs Of Homes Through Higher Insurance Premiums

After having failed to get New York’s Scaffold Law amended by the Legislature, a business coalition has filed an equal protection lawsuit.  The Scaffold Law, which is a kind of Employer Liability Act that dates to 1885, makes a general contractor or owner strictly liable for construction site falls.  It is claimed the law adds $10,000 or more to the price of a new home because of higher insurance premiums paid by contractors.  This is probably true.  In 1980, the New York Legislature conditionally exempted owners of one- and two-family homes from the law, but not contractors building them.  Even if the law did not apply to construction of single-family homes at all, if a contractor did any multi-unit or commercial construction, his insurance premiums would reflect the added risk and constitute an increased cost of business that must be recovered from customers.

Here is a link to some history about the Scaffold Law, including a failed attempt to amend it earlier this decade to establish compliance with OSHA regulations as a defense.  Under that attempted revision of the law, it would have retained the essential characteristic of Employer Liability laws: vicarious liability of the general contractor or owner for the acts of its subcontractors, but would have reintroduced reasonableness of the employer’s conduct as a standard of care on a limited basis, a doctrine that was driven out of the law in court ruling from the 1920s to the 1940s.  Although opponents of the amendments called them a rollback to 1897, the year the negligence standard was removed from the act and strict liability began, another way to look at it is that employers and owners would have remained insurers for workplace accidents, except when they can establish compliance with all workplace safety regulations.  If the object of the Scaffold Law is to protect a particularly vulnerable class of workers — those who work at heights under poorly organized conditions, often for unstable or sloppy construction businesses — requiring an employer to show that those concerns have been satisfied would constitute fulfillment of the law.  In addition, a true no-fault insurance coverage system — Workers Comp — exists to take care of workplace injuries. 

However, ultimately the Legislature did not see it that way, and I’m skeptical of attempts to get judges to change the will of the people’s representatives, or that the law constitutes lack of equal protection or a violation of the Commerce Clause.  I guess we’ll have to wait and see. 

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One Response to New York Scaffold Law Targeted In Lawsuit, Claimed To Drive Up Construction Costs Of Homes Through Higher Insurance Premiums

  1. Nice article, good history. You are correct that these laws are absolutely killing the construction industry. The real victims are the people who are buying the finished product, at an uneccessarily high cost. Affordable housing, and the tax payers that support these programs are also losers.
    The only winners are the attorneys. Even the employees who the law is supposed to protect lose, because the insurance companies are not providing the coverage in alot of cases. The carriers are excluding this type of loss.
    Blame the Assembly and Sheldon Silver, who was himself a trial attorney from keeping responsible legislation off the floor.