Study funded by law's opponents concludes that the so-called
Scaffold Law results in 667 more construction accidents per year in the state,
and adds as much as $3 billion a year in costs.
For years, construction executives and real estate
developers have insisted that an arcane New York state law that foists the
liability for construction accidents solely on the builder has dramatically
driven up the cost of construction insurance and even hurt worker safety. Now
the laws opponents say they have proof of its ill effects on both the industry
and economy.
A study conducted jointly by Cornell University Department
of Policy Analysis & Management and SUNY's Nelson A. Rockefeller Institute
of Government, and was paid for by the nonprofit New York Civil Justice
Institute concluded that the law had resulted in more accidents and cost the
construction and real estate industries billions of dollars.
The study found that New York state has 667 more
construction accidents per year on average because of the rule, and that it
incurs as much as $3 billion a year in additional costs.
"Yet another in the long line of anti-worker research
that purports to advocate for worker safety by weakening business'
responsibility for workplace safety and health," said Paul Fernandes,
chief of staff of the Building and Construction Trades Council of Greater NY in
a statement. "We'll put this on the shelf next to the rest of the research
in this decade-long campaign against scaffold safety that has later been proven
to be completely false."
Known as Labor Law 240, or simply the Scaffold Law, the
rules, according to its opponents, mandate that a construction contractor or
developer who holds the construction insurance policy for a job be solely
responsible for any injuries suffered by workers on that project. The law is
problematic, these critics say because it excludes workers from any
responsibility for an accident they suffer, even if they are carrying out work
improperly or with disregard to safety procedures.
Insurers, who have seen injury payouts on construction jobs
in the state balloon in recent years, have dramatically raised the cost of
insurance policies as a result, or in some cases have pulled out of the market
here altogether. Those withdrawals in turn have created a shortage of options
for policy holders that has further pushed up the price of policies.
"If the Scaffold Law causes injuries and costs our
economy three billion dollars a year, why are we the only state to have
it?" Tom Stebbins, executive director of the Lawsuit Reform Alliance of
New York, said in a statement. "We cannot waste public money on a law that
makes work sites more dangerous. It defies all common sense."
A representative for unions, who support the law, did not
immediately respond to a request for comment.
Source: Crain’s
New York Business
FOR IMMEDIATE RELEASE
February 11, 2014
Contact:
UAlbany/Cornell University Joint Study: New York’s “Scaffold Law” Causes
Injuries;
…and Costs Billions
Long defended “safety standard” under fire for making worksites less
safe
(Albany, NY): A three-part, joint study released today by
researchers at the University at Albany and Cornell University sharply counters
the claim that the Scaffold Law improves workplace safety. According to the
study, New York incurs an additional 677 workplace accidents per year because the Scaffold Law. Researchers
concluded that , “analysis indicates that Labor Law 240 [Scaffold Law]
increases the construction injury rate in the occupations to which it is
applied with a very high degree of confidence.”
For over thirty years, Labor Law 240, also known as the
“Scaffold Law ” has been a frequent target of debate in Albany. Proponents of
reform, including contractors, businesses and local governments, charge that
the absolute liability standard of the Scaffold Law is outdated and
unnecessarily drives up costs for construction in New York. Those opposing
reform counter that placing absolute liability onto contractors and property is
essential for workplace safety.
In addition to making worksites more dangerous, researchers
at the University at Albany reviewed hundreds of cases and public filings and
discovered that the Scaffold Law diverts at least $785 million of public money
away from schools and local governments towards lawsuits, legal costs and
insurance.
The third part of the study analyzed the effect of the $785
million public sector cost on the rest of economy, as well as the cost the
Scaffold Law on the private sector, which is estimated at $1.487 billion. These two costs, along with the
associated legal costs, workers’ compensation payments, medical costs and other
costs bring the total estimated cost of the Scaffold Law to between $2.92 billion and $3.01 billion dollars annually.
Long time advocates of reform say the study severely damages
the only justification for the centuries-old law. “If the Scaffold Law causes
injuries and costs our economy three billion dollars a year, why are we the
only state to have it? said Tom Stebbins, Executive Director of the Lawsuit
Reform Alliance of New York, a group who has long called for reform of the Scaffold
Law. “We cannot waste public money on a
law that makes worksites more dangerous. It defies all common sense.”
Other advocates of reform agree that the study is perhaps
the final piece needed for reform in Albany. “We’ve known for years that the
Scaffold Law costs taxpayers and our economy
billions. It is so bad that many insurers won’t even write policies in
New York. Now we know that it causes injuries. What possible defense is left?”
said Mike Elmendorf, President and CEO of the Associated General Contractors.
In addition to the 677 additional injuries and $785 million
public costs, the study also found:
- New York is the only state in the country to have such a law, and there is no evidence that any other country has a similar standard of absolute liability
- Additional injuries associated with the Scaffold Law cost New York State between $34 million and $84.7 million in worker’s compensation costs, and between $26 million and $65.1 million in direct, indirect and quality-of-life costs, annually
- Redirecting the money spent on lawsuits and insurance to the construction industry would add an additional $480 million in labor income
- Shifting dollars from lawyers and insurers to contractors would be a net gain of 12,000 jobs
- In addition to the public sector cost, the study estimates that $1.487 billion of private sector construction costs may be associated with the Scaffold Law
- Study estimates an additional $110 million spent annually on legal costs associated with the Scaffold Law
- The total estimated public and private sector costs associated with the Scaffold Law are between $2.92 billion and $3.01 billion
With the study in hand, Scaffold Law reform advocates look
for positive traction in the legislature this year.
# # # #
The New York Civil Justice Institute is a non-partisan
nonprofit research organization committed to providing objective analysis and
solutions to issues affecting the integrity, equality, and fundamental fairness
of New York’s Civil Justice System.
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