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ISSUE IN BRIEF: “Safe Place to Work” Reform

Staff Contact:

Every sector of New York's economy, including manufacturers, is adversely affected by the virtually open ended liability created by the state's current tort laws.

The cost of doing business in New York State is being driven up by frivolous lawsuits forcing companies to pay excessive damages, which are often baseless, irrational, and unpredictable.

The Business Council, as a long standing member and active participant of the statewide tort reform coalition "New Yorkers for Civil Justice Reform", supports a comprehensive reform program that will restore fairness and balance to the state's tort system while protecting the rights of injured victims to recover damages. New York's construction industry faces an insurance crisis, and one uniquely shortsighted state labor law is largely to blame. Sections 240 and 241 of the Labor Law provide that if a worker is injured on the job as a result of falling from a height, or being hit with something that falls from a height, the owner and contractor are absolutely liable.

Under current law, this holds true even if the worker is at fault for the accident. For example, the employer is 100% liable even if the employee refused to use safety equipment, ignored company safety policies, or was impaired by drugs or alcohol during the time of the accident. New York State is the only state that imposes such a liability standard.

The Business Council has adamantly advocated the reform of Section 240 and 241 of the Labor Law, the so called "scaffolding" law. However, over the years there has been little movement on proposed legislation designed to amend or repeal the state's draconian absolute liability standard. The result of which has lead to insurance premiums spiraling out of control throughout the state.

Obtaining affordable general liability insurance coverage has been the single most pressing business concern for the construction industry for many years. In the current environment, insurance companies are opting not to provide insurance to New York State businesses at all. Understandably, this is because the liability under 240/241 is extremely broad and unforgiving. Those carriers that remain in New York offer 240/241 protection only with steadily increasing premiums.

In the December 2004 Court of Appeals decision involving Cahill v. The Triborough Bridge and Tunnel Authority, the court narrowed the scope of Labor Law 240/241 by reversing a lower courts decision. The decision in Cahill held that a worker who is provided adequate safety devises and trained on their use, is not entitled to strict liability protections if he/she decides to forgo proper protection and is injured as a result. Although this decision supports our efforts, because of the narrow fact pattern in the case, the courts ruling does not help bring insurance rates down and does not create a fairer playing field in New York State. We need reform.

It should be noted that these laws have not only affected the construction community, but manufacturers, commercial property owners, and private home owners who employ contractors for home improvements as well.

The Business Council supports adoption of a more sensible and balanced negligence-based standard, such as A.2946 sponsored in the Assembly by Joe Morelle. Its companion last year, S.1710 sponsored by Dale Volker, has yet to be reintroduced.