When Drugs Are Involved, Do Dram Shop Laws Apply?

Dram shop laws are civil liability statutes that hold businesses or individuals liable for serving or selling alcohol to intoxicated persons or minors who later cause harm to themselves or a third party. These laws allow victims of drunk driving accidents or other alcohol-related incidents to seek compensation from the establishment or party that provided alcohol to the intoxicated individual. While most dram shop laws apply to commercial establishments, some jurisdictions also extend liability to social hosts who serve alcohol at private functions. However, it is important to note that the specific laws and their interpretations can vary from state to state in the United States, where these laws are enacted at the state level rather than the federal level.

Dram shop laws and liability for drunk driving accidents

Dram shop laws are civil liability statutes that hold businesses liable for serving or selling alcohol to minors or intoxicated persons who later cause harm to themselves or a third party. The laws are enacted at the state level and enable victims of drunk driving accidents to hold bars, alcohol retailers, and private citizens who provided alcohol to the intoxicated person liable for damages.

Dram shop laws allow victims of drunk driving accidents (or their families) to hold bars, alcohol retailers, and private citizens who provided alcohol to the intoxicated person liable for deaths, injuries, or any other damages. In many cases, a bar, alcohol retailer, or individual may be covered by insurance that adequately compensates the plaintiff. For example, a host of a wedding who continues to serve someone who is visibly drunk may have party insurance that will cover the damages.

Proving Liability in a Dram Shop Case

Proving liability in a dram shop case can be challenging due to varying tolerance levels among individuals. Bartenders may not know if a patron is drinking on an empty stomach or if they plan to drive a car. However, depending on state law, a plaintiff may need to show that the alcohol vendor had actual knowledge of the patron's intoxication. In most states, the retailer must have known or reasonably should have known that the patron was so intoxicated that providing more alcohol would increase the risk of danger to the patron or others.

Evidence in Dram Shop Cases

Dram shop laws often specify certain types of evidence that indicate a bar's liability, such as serving a minor without requesting proof of age, serving someone who appeared to be intoxicated, serving after closing time, or serving an amount that would likely result in intoxication. On the other hand, bars can also demonstrate evidence that they were not negligent by implementing policies such as sending servers to education courses, promoting non-alcoholic beverages, and encouraging customers to use taxis if they have had too much to drink.

Compensation in Dram Shop Cases

A successful dram shop claim can provide victims and their families with various types of compensation. A bar or restaurant may be held liable for medical expenses, rehabilitation, lost wages, property damage, and pain and suffering.

Dram shop laws and social host liability laws

Dram shop laws are civil liability statutes that hold a business liable for serving or selling alcohol to minors or intoxicated persons who later cause harm to themselves or a third party. The term "dram shop law" comes from 18th-century Britain, where alcohol was sold by the spoonful, or "dram". Today, dram shop laws apply to all businesses that sell or serve alcohol, including restaurants, bars, liquor stores, taverns, and stadium vendors.

In the United States, dram shop laws are enacted at the state level, and they vary from state to state. As of 2023, 42 states and the District of Columbia have dram shop laws in effect. These laws allow victims of drunk driving accidents or other alcohol-related harm to hold bars, alcohol retailers, and other businesses accountable for deaths, injuries, or any other damages caused by an intoxicated customer.

Proving fault under dram shop laws can be challenging. State laws provide a series of criteria that the victim (plaintiff) must prove, including proof that the establishment sold alcohol to a visibly intoxicated person and that this sale resulted in the defendant's intoxication.

Social host liability laws are similar to dram shop laws, but they apply to private individuals hosting functions where alcohol is served. These laws hold the hosts of private functions liable for injuries, wrongful deaths, or other harm caused by their negligence in serving alcohol or failing to prevent an impaired guest from driving. Like dram shop laws, social host liability laws vary from state to state.

Proving fault in a dram shop case

To prove fault in a dram shop case, the plaintiff must generally demonstrate the following:

• Proof of sale of alcohol to the intoxicated patron: This includes providing evidence that the establishment sold alcohol to a visibly intoxicated person or a minor.
• Proximate cause between the alcohol sale and intoxication: The plaintiff must establish a direct link between the alcohol sale and the intoxication of the patron.
• Intoxication as a cause of third-party damages: It must be proven that the intoxication of the patron was at least one cause of the harm or damages suffered by the third party.

The "obvious intoxication test" is often applied to determine if the retailer knew or should have known that serving more alcohol to the patron would create a dangerous situation. Examples of obvious intoxication include slow or slurred speech, bloodshot eyes, loss of balance or coordination, and exhibiting obnoxious, aggressive, or emotional behaviour.

It is important to note that dram shop laws can vary from state to state in the United States, and specific terms in the statutes may have different meanings. As of 2023, 42 states and the District of Columbia have dram shop laws in effect, while states like Virginia, South Dakota, Nevada, and Maryland do not.

Dram shop laws and minors

Dram shop laws hold businesses that sell alcohol liable for serving or selling alcoholic beverages to minors or intoxicated persons who later cause harm to another person. This includes death, injury, or property damage. The laws are enacted at the state level and are named after establishments in 18th-century Britain that sold gin by the spoonful ("dram").

In the United States, each state establishes its own Dram Shop Act, which holds establishments liable in certain circumstances and to varying degrees, depending on the applicable law in the state. While most jurisdictions limit liability to only cover harm to third parties, some, such as Pennsylvania, extend this liability to cover first-party harm, allowing a patron to take action against the establishment for any injuries they sustained as a result of their intoxication.

Most jurisdictions limit dram shop liability to commercial establishments, but some, like Maine, extend liability to social hosts. As of 2023, 42 states and the District of Columbia have dram shop laws in effect. The states without dram shop laws are Delaware, Kansas, Louisiana, Maryland, Nebraska, Nevada, South Dakota, and Virginia. However, liability claims for retailers that serve underage patrons may still apply even without full dram shop laws.

Proving liability in a dram shop case can be challenging for third-party victims. Bartenders may be unable to determine a patron's level of intoxication and may not know if they will operate a vehicle. State law provides a series of items that the victim (plaintiff) must prove, including proof that the establishment sold alcohol to the visibly intoxicated person (defendant) and evidence that the sale resulted in the defendant's intoxication.

Businesses should train their employees to identify and refuse to serve or sell alcohol to visibly intoxicated individuals or minors. Examples of intoxication include slow or slurred speech, bloodshot eyes, loss of balance or coordination, and exhibiting obnoxious, aggressive, or emotional behavior. State law may require establishments to post a notice stating they do not sell alcohol to observably intoxicated patrons.

Dram shop laws and the role of insurance

Dram shop laws hold businesses that serve alcohol liable for harm caused by their intoxicated customers. These laws are in place in almost all US states, except Delaware, Kansas, Louisiana, Maryland, Nebraska, Nevada, South Dakota, and Virginia.

The laws enable third-party victims of drunken behaviour to file civil lawsuits against the establishment, wait staff, or store clerk that sold alcohol to the intoxicated person. Victims may also bring suit against the intoxicated individual and possibly receive damages from both parties.

Proving liability is a challenge for third-party victims. Bartenders may be unable to determine a patron's level of intoxication and may not know if they will operate a vehicle. State law provides a series of items that the victim (plaintiff) must prove. These include proof that the establishment sold alcohol to the visibly intoxicated person (defendant) who caused the accident and evidence that the establishment's alcohol sale resulted in the defendant's intoxication.

Businesses should train employees on how to identify and not serve or sell alcohol to visibly intoxicated individuals or minors. Examples of intoxication include slow or slurred speech, bloodshot eyes, loss of balance or coordination, and exhibiting obnoxious, aggressive, or emotional behaviour.

Businesses that serve alcohol can purchase dram shop insurance to protect themselves from the financial risks associated with their industry. This insurance combines several types of coverages to properly shield businesses from liability claims, including products-completed operations, liquor liability, general liability, damage to premises rented, assault and battery coverage, and cyber liability.

The cost of dram shop insurance varies depending on the state, policies included, and coverage limits. At Insurance Canopy, the price starts as low as $550 per year for a plan that includes general liability, liquor liability, and damage to premises rented coverage.

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