Posted on: May 26, 2023
The Complexities of Liability and Responsibility in Alcohol Service
Serving alcohol comes with great responsibility. At TIPS, we believe it’s important to understand and reinforce the legal justifications for serving and selling alcohol responsibly.
Whether you serve alcohol in a restaurant or bar, sell beer at a convenience or liquor store, or offer wine and other spirits in your own home, you could be held liable, or responsible, should one of your patrons, customers, guests or friends become intoxicated and cause damage to themselves, others or property. Obtaining certification in a reliable alcohol service training program can help prevent some of the issues that arise from alcohol misuse.
There are three types of liability that individuals or companies can face when serving alcohol: civil liability, criminal liability, and administrative liability. Let’s take a closer look at each one of them.
Civil liability allows individuals to bring suit against licensees, social hosts, or companies depending on where the incident occurred. Lawsuits can be filed by innocent victims injured by an intoxicated person or by the intoxicated person himself. Juries typically award monetary damages to compensate victims (compensatory damages) and to punish the offender (punitive damages). Awards can range from a few thousand to millions of dollars. Civil lawsuits are based on three basic types of law.
- DRAM SHOP LAWS – These are specific statutes that address liability issues for liquor license holders. These statutes are intended to promote responsible alcohol service and provide a means for third parties to file suit for injuries and fatalities resulting from a liquor law violation.
- COMMON NEGLIGENCE LAWS – These laws, although not specifically defined, address negligent behavior with negligence being defined as not doing what any reasonable person could be expected to do under a certain set of circumstances. With regard to alcohol, it is assumed that a person (server/seller) can be expected to follow a set of procedures and if he or she fails to do so, the server/seller has acted negligently.
- SOCIAL HOST LAWS – These are specific laws stating that social hosts (hosts of a party, function, etc.) who provide alcohol to their guests can be held responsible for the actions of their guests if alcohol was served improperly. The laws in each jurisdiction vary, so check with your local liquor board to find out which laws apply in your state.
The state can hold licensees, establishment owners, employees, social hosts, or employers criminally liable for serving alcohol irresponsibly. Unlike civil suits, these cases address the criminal aspect of the matter. One common example of criminal liability related to alcohol is when the state brings a case against an intoxicated person who causes harm or death to a third party. The state can also charge the individuals who served alcohol to the intoxicated person.
NOTE: Many cases involving injury or death result in both civil and criminal charges. The cases would be decided independently, and the penalty, in either case, is not dependent on the other. Also, while a civil suit typically carries a monetary judgment, the result of a criminal suit can be prison time.
Administrative liability applies to the holder of a liquor license and to servers/sellers who possess a permit to serve or sell alcohol in that state. The licenses and permits are granted by state liquor control boards that set the administrative penalties for non-compliance of government regulations. Penalties for violating the terms of a liquor license or the conditions associated with a server/seller permit can include fines, suspension of the license/permit or even revocation of the license/permit.
Suspension of a license/permit will mean lost revenue for the period of the suspension, as well as damage to the establishment’s reputation and image or that of the server/seller. License revocation can result in a business having to close its doors while the loss of a server permit can result in unemployment for the server/seller.
Administrative liability is usually the first form of liability that licensees and their employees will experience. Common grounds for these penalties include failing to check IDs, serving an underage patron, and serving an intoxicated patron.
Protect Yourself and Your Business
Overall, as a server or seller of alcohol, you are responsible for the individuals you serve and potentially for their actions. Being certified in a quality alcohol service training program such as TIPS and understanding the legal responsibilities that come with serving alcohol will help you confidently intervene to prevent alcohol-related tragedies.