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December 11, 2018

Lawmakers and advocates gear up to reform costly construction law

December 3, 2018
Gov. Cuomo inspects the South Tube of train tunnels running between New York and New Jersey during an overnight tour on Oct. 17. Cuomo is pushing for a new tunnel as part of the Gateway project. (Victor J. Blue / AP)

Critics of a controversial state law that makes construction companies 100% liable for work-site injuries are pushing for an overhaul of the statute amid ramped-up talks on a massive new train tunnel project.

Those opposed to the so-called “Scaffold Law” — the only one of its kind in the country — say it could add up to $300 million to the cost of the Gateway project to bring a new tunnel underneath the Hudson River to better accommodate Amtrak and NJ Transit. President Trump and Gov. Cuomo met recently to discuss the fate of the project.




And they argue it’s already increased insurance costs.

“There’s oceans of data showing this drives up infrastructure costs tens of millions, hundreds of millions and sometimes billions of dollars a year,” said Tom Stebbins, executive director of Lawsuit Reform Alliance of New York. “Think of all the schools we could build, all the teachers we could hire.”

Stebbins and his allies argue that increased insurance costs make it much tougher to pay for not only maintaining schools, but also the city’s subways and for the creation of new affordable housing.

Tom Stebbins - Executive Director, The Lawsuit Reform Alliance of New York (LRANY)
Tom Stebbins – Executive Director, The Lawsuit Reform Alliance of New York (LRANY) (nylawsuitreform.org)

According to a 2013 study from the SUNY Rockefeller Institute, the law costs taxpayers at least $785 million annually and private businesses that work on public projects $1.49 billion per year.

Jolie Milstein, president of the New York State Association for Affordable Housing, said the law has “diminished” the city’s ability to create more affordable housing, a top priority of Mayor de Blasio.

“You’re losing housing units. Sometimes whole projects aren’t feasible,” she said. “Everything that drives up the cost, you get fewer units built.”

She added that right now the construction industry is already facing a perfect storm of increased building costs that include climbing real estate prices, a citywide building boom and increased material costs due to speculation over tariffs.

Add to that the additional insurance costs companies have to pay to cover them against the Scaffold Law, and something has to give, she said.

“There’s been a lot more conversation about this recently,” Milstein said. “If ever, the time (for reform) is now with all these upward pressures.”

Not only are the insurance costs high, but policies have become harder and harder to come by — a problem especially for smaller, less established companies that either can’t find a policy or can’t afford one.

On Long Island, the situation is so bad a coalition of builders wants the state to declare “an insurance state of emergency.”

“Our companies are refusing work, having great difficulty finding sub-contractors who can find such insurance and are paying insurance premiums which are excessive and no longer reasonable,” members of the Long Island Builders Institute wrote the state Department of Financial Services.

Stacey Hillman, president of the Allbar Steel construction company, said she had to drop a roadwork project in the Bronx recently when she was faced with paying more than $700,000 a year for insurance.

Stacey Hillman, president of the Allbar Steel Construction Company
Stacey Hillman, president of the Allbar Steel Construction Company (Courtesy Photo)

“I thought I was going to have a heart attack,” she said, adding she ultimately took a cheaper policy, though it won’t cover work in the five boroughs.




The prime opponents of revising the law are trial lawyers, who earn money on the lawsuits which stem from injury claims, and the building and construction unions, whose members are by-and-large protected from liability under the law.

Gary LaBarbera, a spokesman for the Building and Construction Trades Council of Greater New York, challenged critics to “open their books and prove” the law has hurt companies’ bottom line.

“New York’s scaffold safety law has made construction sites safer and has held employers accountable,” he said in a statement to the Daily News, adding: “Those who are advocating for its repeal should not be risking the lives of the men and women who make up the construction industry in the name of profit.”

Spokespeople for the New York State Trial Lawyers Association declined to comment.

The Cuomo administration does not currently have any plans to pursue changing the law, an administration source said.

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