(Just The News)—A coalition of business groups is calling on New York City Mayor Zohran Mamdani to add his weight to a push for state reforms to a law critics say has fueled a wave of bogus litigation.
In a letter to Mamdani, the groups said the law, which dates back to 1885, continues to impose “absolute liability” on New York property owners and contractors for injuries on construction sites, which has caused insurance rates to “skyrocket” in recent years.
The groups, which include Associated General Contractors of New York, the Lawsuit Reform Alliance of New York and the Citizens Budget Commission, said the mandate has caused construction insurance rates in New York City to skyrocket, driving up the cost of housing, schools, and infrastructure. They said it also has resulted in significant fraud as staged accident suits have flooded the courts.
As a result, New York City construction and development projects face insurance premiums 2 to 5 times higher than in comparable markets, adding about 7% to 10% to overall construction costs, they said.
“Furthermore, bad actors exploit the law to defraud the legal system, further driving up insurance and construction costs,” they wrote.
The groups said amending the Scaffold Law to apply so-called “comparative negligence” — a rule commonly used in personal injury lawsuits — “juries can consider the responsibility of all parties involved, which will reduce the volume of lawsuits, fraudulent claims, and the price of insurance.”
“These savings will lower construction costs and encourage investment in the development of thousands of additional affordable housing units,” they wrote.
Critics of reforming New York’s scaffolding law say the changes would make it harder for workers to recover damages, reverse safety gains and put workers at even greater risk of injury.
“By holding owners and contractors strictly liable for elevation-related hazards, the Scaffold Law creates a powerful incentive to invest in safety,” Leitner Varughese Warywoda, a New York City-based law firm, wrote in a recent report. “This preventative effect is credited with making New York’s worksites safer than they would be under a negligence standard.”
New York’s legal system is consistently ranked among the worst in the nation in the American Tort Reform Foundation’s annual “judicial hellholes” report for its handling of frivolous litigation.
Trial lawyer groups have ramped up spending on lawsuit ads and aggressive marketing campaigns that critics say are fueling a “fraudemic” of bogus litigation, tort reform groups say.
In the letter, the business groups pointed to Gov. Kathy Hochul’s liability reforms as part of her ‘affordability’ agenda, including a package of auto insurance reforms aimed at cracking down on fraud that she pushed through the legislative process.
“Gov. Hochul’s recent car insurance reforms targeted fraud and legal system abuse to lower costs for all New Yorkers,” they wrote. “To further these efforts, New York City must recommend that the State amend the Scaffold Law’s liability standards to deter fraudulent claims and decrease construction costs.”
