NJ.com: Inside the fight to undo a century‑old law blamed for soaring infrastructure costs

By: Larry Higgs

A coalition seeking to reform a 19th-century labor law says changing it could save hundreds of millions of dollars on megaprojects such as the Gateway Tunnel, the new Port Authority Bus Terminal and Penn Station.

The Scaffold Law was enacted in 1885 as a needed protection for workers on tall buildings.

The Build More New York coalition — made up of contractors, business groups, chambers of commerce and others — wants federal legislation to change New York’s law to resemble the laws in 49 other states.

“This is the only such law in the country - it has consequences in New Jersey,” said John Faso, former congressman and chairman of the Build More New York coalition.

The law affects the cost of bi-state projects done by the Port Authority, which saw liability claims double on the New York side of the Goethals Bridge project. Those claims were $22 million on the New York side, compared with $10 million on the New Jersey side.

The Scaffold Law’s “absolute liability” clause makes employers, property owners and government agencies responsible for any fall or “gravity” injury on construction sites, even if workers are negligent.

“New Jersey and other states do not have absolute liability,” he said. “It doesn’t lower injuries and fatalities.”

A bill proposed in Congress would change existing law by requiring states that receive federal funds for infrastructure projects to follow the liability laws of the other 49 states. That bill could be acted on this month.

“It would say that on any federally funded project, the liability standard is comparative negligence, not strict liability,“ Faso said. ”Cases would be heard in federal court where there are stricter standards of proof."

Laws like the Scaffold Law were common until the country had the federal Occupational Safety and Health Administration (OSHA) and local safety laws, Faso said.

Supporters also cited the potential for fraudulent claims under the current Scaffold Law, as shown by projects that span New York and other states.

“This would lower costs for Port Authority projects done in New York state. We’d have more money for construction and jobs,” he said.

Supporters commissioned a study to determine how much Scaffold Law claims could add to the cost of various public projects, including the replacement of the Port Authority Bus terminal in midtown Manhattan, which is underway, and the replacement of Penn Station, which is in the planning phases.

For a Penn Station replacement estimated to cost $7 billion, switching to a negligence standard comparable to other states could save between $280 million and $560 million in insurance costs.

Potential savings could be between $590 million and $880 million for the new $10 billion Port Authority Bus terminal now under construction. Reform could save between $180 million and $300 million for the $16 billion Gateway Hudson River Tunnel project, the report said.

“If adopted, in New York state, $1.1 to $2.3 billion would be saved on transportation projects over the next five years,” Faso said.

Officials of the Laborers’ International Union of North America did not respond to a request for comment about the proposed legislation.

Opponents of reform have said that saving money should not be the only factor considered when reforming the law.

“New York has some of the strongest labor laws in the nation, laws that set the benchmark for upholding workers’ rights,” Gary LaBarbera, president of the Building and Construction Trades Council, said in an Albany Times-Union op-ed.

“Among them is the Scaffold Law, which has been a beacon of construction site safety and contractor accountability for more than a century,” he said.

Faso said federal labor statistics show New York’s construction fatality rate is the highest in the tri-state area, even with the Scaffold Law in place.

“Reform is about fixing an outdated system that raises costs without improving safety,“ he said.

Past efforts at reform in New York have been blocked by trial lawyers, Faso said, and an independent analysis by the nonprofit Empire Center.

That analysis said law firms handed out T-shirts to workers at construction sites to drum up business. That report said the only debate about suits brought under the law was how much the settlements would be worth.

“Past efforts to reform the law in Albany over 40 years have been stymied by the trial lawyer lobby which benefits from these lax legal standards,” Faso said.

A New York County Trial Lawyers Association analysis concluded, “Only under the Scaffold Law can a claimant be 99% at fault for causing his/her own injuries and still recover 100% of the damages from a defendant.”

That report said current interpretations of the Scaffold Law, “wholly ignore New York’s public policy of fairly and equitably balancing liability among the parties based on their relative degrees of culpability.”