Christopher Carucci, Vice President of Client Services and Litigation Management at Gallagher Bassett Services, Sean Keely, a Partner with Smith Gambrell & Russell, LLP, and Andrea Silk, a partner with Gallo Vitucci Klar, LLP provided valuable insight into handling and litigating New York Labor Law Claims. A video replay of this presentation is available on the AIRROC On Demand platform. Below are some of the key takeaways:
- New York Labor Law can impose strict liability on owners, general contractors, and their agents in construction accident cases, regardless of actual negligence.
- The barrier to recovery under the Scaffold Law (NYLL § 240(1)) is low, creating incentives for abuse of the law, particularly given the rise of nuclear verdicts. Consistent with the increase in nuclear verdicts, the settlement values of claims arising out of the Scaffold Law have also increased.
- There are currently two legal avenues of note aimed toward limiting potential abuse:
- A bill was introduced in the New York legislature on January 31, 2024, proposing to add a new section to the Penal Law making it a crime to “stag[e] a construction site accident . . . with intent to commit and in furtherance of a fraudulent insurance act . . .” No action has been taken on this bill to date.
- There are certain RICO cases working their way through the New York courts that allege that certain law firms, medical providers, and purported claimants engaged in an unlawful scheme to defraud workers compensation carriers by staging worksite accidents and providing unnecessary medical treatment. These cases are in their initial stages, and the panelists agreed that it would likely be another 12-18 months before any potential impact on settlement activity would be seen.
- The panel then discussed practical steps that could be taken to limit exposure to claims under the New York Labor Law. These include:
- Education of onsite leaders concerning proper care for injured workers
- Prompt investigation of claims, including swift collection of photographic or video evidence and witness interviews
- Interview of injured employee within 48 hours of the alleged incident, with the goal of obtaining a statement
- Employing a full-time on-site investigator where practicable
- Preservation of evidence, including ladders and safety equipment
- Prompt retention of defense counsel to work in coordination with the claims team and investigators and to protect privilege
- Prompt analysis of risk transfer opportunities and pursuit of those opportunities
