As an alcohol-serving establishment, businesses can be especially vulnerable to the legal risks of over-serving their patrons. While bartenders can be particularly effective in limiting the damage that an intoxicated person may potentially cause by cutting them, they may also face legal and civil charges as a result of over-serving.
Because of this, many states have enacted legislation to allow for prosecution and civil suits of commercial establishments that serve alcohol to visibly intoxicated individuals or to minors. These laws are often referred to as “Dram Shop” laws, which hold those serving alcohol liable for the acts committed by the intoxicated person(s) they are serving.
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What Are Dram Shop Laws?
The term dram shop is used to describe a tavern, bar, restaurant, or other commercial establishment that serves alcoholic beverages. It was used to refer to establishments where spirits, were sold by the spoonful or a dram, a unit of liquid measurement. Dram shop laws originated during the Temperance Movement in the United States.
Dram shop liability or laws refer to laws governing commercial establishments that sell and serve alcoholic beverages to people who are visibly intoxicated, or to minors, who go on to cause injury or death to others (third parties). They also allow third-party victims to file civil lawsuits against the server, store clerk or establishment serving alcohol to an intoxicated person or minor.
Victims may also bring lawsuits against the intoxicated person and may receive damages from both the establishment and the individual. The laws are designed to protect the public from potential danger as a result of commercial establishments selling alcoholic beverages to people who are intoxicated or to minors.
Many establishments that serve alcohol have some form of liability insurance to protect them in these instances. Dram shop laws are also legislated on the state level, rather than the federal. In recent years, organizations like Mothers Against Drunk Driving (MADD) have lobbied for stricter dram shop laws and for more severe penalties associated with the violation of these laws.
How Do Over-Serving Laws Work?
Prior to the formal imposition of dram shop laws, the court system often discouraged or even prohibited lawsuits against the sellers and servers of alcoholic beverages stating that serving alcohol did not actually cause the damage and that it occurred as a result of the actions of a heavily intoxicated individual. There are two specific categories of dram shop cases: first-party and third-party.
First-party dram shop cases occur when the person who consumed too much alcohol prosecutes the bartender or establishment that served them to receive compensation for any injuries or damages they caused while under the influence. However, not many states allow for prosecution in first-party dram shop cases because there is a presumption that individuals should be responsible for how much alcohol they consume.
This also relates to the prosecution of DUI cases. Typically, individuals arrested on DUI charges can’t blame the person who served them for allowing them to drink and drive by claiming that they were not responsible for how much alcohol they consumed. Yet in many states, there may be provisions that allow minors or the guardians of minors to prosecute these cases because in all states, individuals under the age of 21 are not allowed to drink alcohol legally.
First-party dram shop cases are also very hard to prosecute and win. It’s tough to convince a jury of a person’s innocence because after causing an injury or damage as a result of their own actions.
A third-party dram shop case occurs when the intoxicated person causes injury or damage to another person or party. For instance, if a visibly-intoxicated person drinking in a bar continues to receive alcohol and later gets in an accident after attempting to drive, the third-party injured in the accident can sue for damages.
The states that allow third-party dram shop cases typically have stipulations on what the third party must prove in court to successfully sue the bartender or establishment. Different states have various standards of evidence that must be achieved, but in general, the third party must:
- Prove that the bartender or establishment sold or gave alcohol to the person.
- Demonstrate some relationship between the person’s level of intoxication and their use of the alcohol that was sold or given to them.
- Provide evidence of recklessness on the part of the bartender or establishment, such that they intentionally served alcohol to a person who was visibly intoxicated and disregarded obvious signs that serving alcohol to the person could potentially cause damage or harm to others.
- Prove that the bartender or establishment knowingly served alcohol to an individual who was addicted to alcohol and/or drugs.
- Demonstrate that the establishment or bartender served alcohol to a minor.
- Demonstrate that the act of serving alcohol to the individual was intentional.
Consequences of losing a dram shop case can include significant fines, loss of license or employment, lawsuits that can result in significant financial penalties, and even potential jail sentences, depending on the state and/or circumstances of the case.
What States Have Dram Shop Laws?
The National Conference of State Legislators website indicates that at the time of this writing, the 30 states have some form of dram shop law. Check with your state website to see exactly what the stipulations are regarding these laws.