N.Y. Contractors Battle 'Scaffolding Law'

BY ROBERT P. MADER

Of CONTRACTOR’s staff

NEW YORK — Only in New York state can a contractor’s employee be dead drunk or high on drugs, fall off a scaffolding or ladder and sue his employer to collect damages. Under New York’s notorious Labor Law 240, it’s not a question whether a contractor will pay, it’s only a question of how much. The law puts absolute liability on the contractor, no matter what the circumstances.

Fortunately for contractors, cracks are beginning to appear in 240. The reforms are being spurred by an insurance crisis.

“Some insurance companies won’t write for contractors in New York state because of this law,” said Mark Whalen, executive director of the New York State Plumbing-Heating-Cooling Contractors.

“Liability insurance rates are out of sight,” added Louis J. Coletti, president and CEO of the Building Trades Employers Association, headquartered in Manhattan. “Premium increases have been ranging from as low as 75% to as high as 360% for contractors in New York City.”

The crisis centers around the issues of affordability and availability. Many contractors in Coletti’s organization responded to a survey that they could only obtain policies from insurance companies not regulated by the state of New York. Many large carriers will not cover contractors in New York City.

That’s absolutely the case, said Bernie Burdeau, representing the New York Insurance Association. Any contractor that deals with scaffolding such as roofers, painters or masonry contractors will have a hard time getting insurance, he said.

Mainstream insurance companies have suffered huge losses on premiums but can’t increase rates.

“The way it works is if you want to increase premiums by more than 7%, the rates for most companies are subject to prior approval of the insurance department,” Burdeau explained. “If the department only approves a 10% to 12% rate increase, it’s sayonara. That’s why contractors see huge increases because they’re forced into the unregulated market, the excess and surplus lines market.”

Those premiums have escalated to the point where they hamper economic growth and threaten jobs — 12% to 15% of total job cost, Coletti said.

The soaring costs are being passed onto consumers in the form of higher prices for new construction, renovation and repairs. Even homeowners who hire contractors to do work on their dwellings are liable.

Reformers face a formidable combination of trial lawyers and labor unions in Albany so they are trying to reform the law without repealing it. The proposed legislation is Senate Bill S01710 and companion Assembly Bill A7213.

“The bill up there now in Albany does not lift absolute liability but says that when damages are decided that the employee contribution to the accident can be considered when determining damages,” Whalen noted. “We felt that had a better chance of passing the legislature than rolling back absolute liability.”

The language of the proposed law states that the conduct of the claimant or decedent will not bar recovery, but the amount of damages recoverable will be affected by the commission of a criminal act, impairment from drugs or alcohol, failure to use safety devices or failure to comply with practices that are taught in safety training classes. Coletti’s members in the BTEA have spent $40 million on safety training, he said.

“The employer could have said, ‘Don’t use this ladder, it’s broken,’ and the guy uses it anyway,” Whalen said “That could be taken into consideration.”

Surprisingly, that couldn’t be taken into consideration under Labor Law 240. Contractors have no right to present evidence to a jury.

Contractors, however, have made headway, Coletti said.

“We made significant progress this year because a large contractor might find a way to absorb these high premiums, but if you’re a small- or mid-size contractor, especially a minority or woman-owned firm, these premiums will bankrupt you,” he said “The problem is completely out of hand this year.

“I think this next session [of the legislature] a number of people are listening who, in the past, were not inclined to do so. There seems to be an environment in Albany where tort reform is a major item of discussion. People are fed up all across the board.”

Meanwhile, a New York City law firm has won an unusual case — the right to present evidence to a jury in a Labor Law 240 case.

The case, Meade v. Rock-McGraw Inc. et al, centered on a journeyman carpenter injured while replacing ceiling tiles in the hallway closet of a Midtown office building. Attorney William J. Smith of Lifflander, Reich & Smith convinced a judge that the only reason why the worker was injured was 100% his own fault. The judge agreed and said the evidence should be presented to a jury.

According to court papers, the carpenter determined that a 6-ft. ladder he had been using was too big, and he retrieved a 5-ft., wooden A-frame ladder that he said was in good working order. The carpenter positioned the ladder against the closet wall in the closed position and climbed to the third step, took both hands off the ladder and began to work when the ladder slid out from under him and he fell to the floor and sustained injury, according to the court papers.

“We were able to successfully argue first at the trial court level (Manhattan Supreme Court) and then at the appellate level (First Department, Appellate Division) that [the carpenter’s] misuse of the ladder by leaning it against the wall constituted the sole proximate cause of his injuries,” Smith said.

The decision was so rare that the New York Law Journal ran it June 13 as its featured “Decision of the Day.”