Serving Alcohol: The Evolving Law

by Murray Stieber, Christopher Afonso | Oct 23, 2019

Introduction

Insurers of those who serve alcohol continue to grapple with uncertain liability. Commercial host and social host liability are different but related lines of negligence law. Both involve an inquiry into a whether a duty of care was owed between the host and an injured party, who may or may not be a guest of the host.

Generally, the law is well established that commercial and social hosts owe duties of care to guests to those they serve alcohol. However, the courts continue to refine the scope and extent of these duties. Recent decisions in Ontario suggest that the duration of the duty exceeds ensuring the safe arrival home of an intoxicated guest, and may include any subsequent harm so long as the subsequent harm was foreseeable.

This paper begins with a review of the law of commercial host liability and the impacts of Hummel v. Jantzi, a 2019 trial decision of the Superior Court. We will then survey the law of social host liability and the most recent application of same by the Ontario Court of Appeal in Williams v. Richard. The paper will then discuss some new challenges to insurers and the implications of social host liability on cannabis users.

Commercial Host Liability: A Review

The Statutory Duty of Care

The duty of care owed between a commercial entity and patrons served alcohol is informed by common law and the Ontario Liquor Licence Act.

Section 29 of the Ontario Liquor Licence Act prohibits the sale or supply of liquor to any person who or appears to be intoxicated. Section 39 of the Act imposes a duty of care on commercial entities to any person who suffers injury or damages as a result of harm caused by an intoxicated patron. Over-service is not enough to establish liability; the over-service must produce the patron’s intoxication such that it is reasonably foreseeable that the patron may injure another.[1]

The Common Law Duty of Care

The common law duty of care is informed by the landmark decisions Jordan House Ltd. v. Menow [2] and Stewart v. Pettie.[3] In Jordan House Ltd., the Supreme Court of Canada found a bar liable after a patron, who had been served to the point of intoxication, was struck by a motor vehicle on his walk home. The Plaintiff was known to be intoxicated by servers and had spent hours drinking at the bar on the night of the accident. The Court held that the server’s knowledge about the Plaintiff’s intoxication established foreseeability and proximity necessary to create a duty of care. Interestingly, the Court framed the duty as one to ensure that the Plaintiff arrived home safely.[4]

In Stewart, the Court expanded the duty of care owed between a bar and a patron to include third parties harmed by an intoxicated patron:

It is a logical step to move from finding that a duty of care is owed to patrons of the bar to finding that duty is also owed to third parties who might reasonably be expected to come into contact with the patron, and to whom the patron may pose some risk. It is clear that a bar owes a duty of care to patrons, and as a result, may be required to prevent an intoxicated patron from driving where it is apparent that he intends to drive. Equally such a duty is owed, in that situation, to third parties who may be using the highways. In fact, it is the same problem which creates the risk to the third parties as creates the risk to the patron. If the patron drives while intoxicated and is involved in an accident, it is only chance which results in the patron being injured rather than a third party. The risk to third parties from the patron’s intoxicated driving is real and foreseeable.”[5]

Commercial vendors of alcohol have an obligation to monitor a guest’s consumption of alcohol and should have protocols in place to ensure that all reasonable precautions are taken to prevent intoxicated guests from driving.[6] A commercial host cannot evade liability through ignorance of the guest’s level of impairment, and will be liable if it or its employees ought reasonably to have known in the circumstances that the guest was intoxicated.[7] A commercial host will also be liable for over-serving patrons who, due to their intoxication, decide to enter vehicles driven by intoxicated persons and subsequently suffer injuries.[8]

In Stewart, the Court concluded that a bar was not liable for an accident caused by a patron to whom it served alcohol. The intoxicated patron was accompanied by two other patrons who did not consume any alcohol. The patrons were served by a single server who kept track of all the orders. The server was able to confirm that the other members at the table had not ordered any drinks and appeared sober. It was found that, to the knowledge of the commercial host, the intoxicated patron was in the care of two sober and responsible persons when leaving the establishment. Therefore, it was not reasonably foreseeable that the intoxicated patron would operate a motor vehicle after leaving the bar.

In Childs v. Desormeaux,[9] a landmark about social host liability, the Supreme Court noted several distinctions between social hosts and commercial hosts. Monitoring alcohol consumption is easy and expected of commercial hosts, who have an incentive to keep track in order to issue a bill.[10] Further, regulators often require servers undertake training in the signs of intoxication and the risks over over-serving.[11] The sale of alcohol itself his highly regulated, involving licencing schemes and special rules governing the service of alcohol.[12]

Recent Developments

The internal policies of a bar and exercise of care by servers was weighed heavily by the Superior Court in the recent decision of Hummel v. Jantzi.[13] In this case, a bar was found liable for injuries sustained by the passengers of a motor vehicle driven by an intoxicated patron.

The intoxicated patron (“PJ”) drove his five friends to the bar shortly before 10:00PM to watch a hockey game. He has consumed two beers beforehand. The bar was offering a “12 for 12” special” – twelve 6 oz. glasses of draft beer for $12. The six friends consumed four orders of the special; approximately 42 glasses. PJ drank approximately 20 glasses. The group left at around 1:00AM.

The trial judge noted that the bar did not have sufficient staff working that evening nor a policy in place to monitor consumption. There were two servers for the entire bar. No staff checked IDs. No food or water was offered to the group. Neither server counted the number of glasses of beer consumed by each guest. One server mistakenly told police that there were 8 guests at the table. No inquiries were made about who in the group was driving. The servers did not recall seeing the group leave; however, receipts confirmed PJ had paid the bill. Relying on expert evidence, the trial judge concluded that the PJ would have been showing obvious signs of impairment (red eyes, staggering, stumbling, slurred speech, and impaired fine motor skills).

Nevertheless, PJ was able to drive all of his friends safely to one of their homes in Fonthill, Ontario. About 30 minutes after returning to the home, PJ and two of his friends decided to drive to a nearby gas station to buy cigarettes. It was on the way home, around 1:30AM, that PJ lost control of his vehicle and struck a tree. This accident caused serious injuries to one of his passengers, W.

It was clear that the bar owed a duty of care to PJ and those injured in the accident, based on Liquor Licence Act and Stewart v. Pettie. However, the Court made this finding despite the PJ and his guests having already returned home safely after leaving the bar. You will recall that the Court in Jordan House Ltd. held that a bar owed a duty of care to ensure intoxicated patrons arrive home safely.

Relying on Williams v. Richard (discussed below) the trial judge did not accept submissions that the group’s return to one of their homes terminated the bar’s liability:

…It does not make sense that if [PJ] had been involved in an accident while driving from the [bar] to the Fonthill residence, the [bar] would be liable to third parties such as [W] but the [bar] is not liable to [W] because [PJ] had driven him to his home. The same lack of judgment, induced by the consumption of alcohol, which resulted in [PJ] driving a motor vehicle upon leaving the [bar] and [W] becoming a passenger in the vehicle also was a significant contributing factor to [PJ] and [W] leaving the Fonthill residence in [PJ’s] motor vehicle to go to purchase cigarettes. It was the same consumption of alcohol which impacted both poor decisions.

Also, although not determinative of the issue, the Smart Serve protocols provide that the licensed establishment is responsible for the guest until he or she is sober.”[14]

Social Host Liability: A Review

The Common Law Duty of Care

Childs v. Desormeaux[15] is the leading Canadian case regarding social host liability. The Supreme Court of Canada applied the Anns-Cooper framework to conclude that the social hosts in that case did not owe a duty of care to public users of the highway who had been injured by the hosts’ intoxicated guests. In deciding this case, the Court’s analysis hinged on two issues: foreseeability and proximity.

In situations where the claim is based on a failure to stop a guest from driving, the injured party has the onus of establishing that the harm caused by an intoxicated guest was foreseeable to the host, and that there were other aspects of the relationship between the injured party and the host that created a special link of proximity.[16]

Jurisprudence has held that social host duty of care is a fact-specific determination. Foreseeability depends on the host’s knowledge of a guest’s intoxication or future plans to engage in a potentially dangerous activity that may cause harm.[17] Consideration is given to the host’s knowledge, whether there were signs of intoxication, or a reasonable belief that the guest would engage in certain acts that may lead to an accident.[18]

Regarding proximity, the Court in Childs articulated three traits of a relationship that may cause a legal stranger to take action to prevent another from causing harm:

  1. Where a host intentionally attracts or invites third parties into an inherent and obvious risk that the host creates or controls;
  2. A paternalistic relationship of supervision and control; and
  3. Where a host exercises a public function or engages in a commercial enterprise that includes implied responsibilities to the public at large.[19]

Case law suggests the Court will engage in a factually specific evaluation of whether there is “something more” that would make a social gathering an inherent and obvious risk, including: whether the host served alcohol or guests brought their own; the size and type of the party; and, the presence of other risky behaviour, such as underage drinking or drug use.[20] The Court also noted that a prima facie duty of care owed by hosts to third parties may be established where the host continues to serve alcohol to a guest they know is intoxicated.[21]

Generally speaking, the consumption of alcohol and the assumption of the risks of impaired judgment is usually a personal choice and inherently personal activity.[22] Proximity will not be established in the absence of proof that any party relied on the social hosts to monitor their guests.[23]

In Childs, the Court noted an absence in the trial judge’s findings that the hosts knew or ought to have known that their guest was intoxicated when left the party by car. The hosts’ knowledge of their guests previous drinking and driving did not establish foreseeability.

With respect to proximity, the Court held that simply holding a house party where alcohol was served was not an invitation to participate in highly risky activity. More was required to establish a risk that creates positive duty to act.[24] The hosts had provided only small amounts of champagne, and most guests brought and consumed their own alcohol.

Recent Developments

As mentioned above, foreseeability and proximity will likely be established where a social host knowingly allows an intoxicated guest to drive away. This duty may go beyond simply ensuring the intoxicated guest arrives home, and include any subsequent action that was foreseeable.

In Williams v Richard,[25] the Ontario Court of Appeal dismissed a summary judgment motion and ordered that a trial was necessary to determine whether a social host owed a duty of care to an inebriated guest for harm caused after the guest had safely returned home.

Two friends, Mr. Richard and Mr. Williams, had a history of being drinking buddies – even entering a pact that, if either of them were going to drive drunk and children were involved, the other would call the police. On the day in question, Mr. Williams consumed 15 cans of beer in Mr. Richard’s garage over a span of three hours. Mr. Williams lived approximately 500m away from Mr. Richard’s house. Upon arriving home by foot, Mr. Williams decided to drive the babysitter home. He also brought his children along in the vehicle. Although he safely drove the babysitter home, Mr. Williams was involved in a fatal car accident on the way home, in which his children suffered serious personal injuries.

The Court of Appeal noted that Mr. Richard took no steps to prevent Mr. Williams from driving. Mr. Richard’s evidence indicated he was aware that Mr. Williams was inebriated, and that he intended, once home, to drive the babysitter home with his children in the car. Mr. Richard threatened to call the police, but did not do so. Further, he did not alert Mr. William’s wife or the babysitter of his intoxication. Mr. Richard also did not ask his mother, who was home, to drive the babysitter home. Mr. Richard did not walk Mr. Williams home to see if his car was in the driveway. However, Mr. Richard did call the police approximately 30 minutes after Mr. Williams left the house, after noticing Mr. Williams car was not in his driveway.

The Court further made note of the fact that Mr. Richard continued to offer beer to Mr. Williams, despite knowing he was intoxicated. On these grounds, it distinguished this case from Childs:

“…The motion judge did not advert to or consider the obvious factual differences between [this case and Childs v. Desormeaux]. This was not a large social gathering, rather it was two men drinking heavily in a garage. There was a developed pattern of this behaviour, enough so that the men had a pact as to what to do in the event one of them drove children while under the influence. Alcohol was provided or served, to a certain extent, as the garage refrigerator the men were accessing had 30 to 40 cans of beer in it…Moreover, nowhere in her analysis did the motion judge consider the statement in Childs, at para. 44, that ‘it might be argued that a host who continues to serve alcohol to a visibly inebriated person knowing that he or she will be driving home has become implicated in the creation or enhancement of a risk sufficient to give rise to a prima facie duty of care to third parties’.”[26] [emphasis added]

In light of this, the Court determined there was a genuine issues requiring a trial regarding whether Mr. Richard, as a social host, may have invited Mr. Williams to an inherently risky environment that he controlled and created, thereby causing a positive duty of care.

Much like they duty of commercial hosts, the duty of a social host does not necessarily end upon the safe arrival home of an intoxicated guest. The Court held that the motion judge erred in concluding, in the alternative, that any duty owed by Mr. Richard ended when Mr. Williams returned home:

“…[The motion judge] seized upon the fact that Mr. Williams arrived home safely to find that any duty of care ended when Mr. Williams reached that point. This was an error of law. In a social host liability case, there is no automatic rule that the duty of care expires once the intoxicated driver arrives home safely. The limits of the duty are determined by the facts of the case. The motion judge was obliged to explain why the duty of care ended on Mr. William’s arrival home, especially since the evidence focussed not on whether Mr. Williams would drive home, but on whether he would drive the babysitter home.”[27] [emphasis added]

The Impacts

The outcomes of Hummel and Williams broaden the scope of liability for both commercial and social hosts. Both types of host must now consider not just how their guests will get home, but also what they may do afterwards. Further, a host’s risk assessment remains complicated given the Court’s affirmation that the scope and extent of the duty is fact-specific and not class-based.

Foreseeability and proximity remain at the core of the analysis. Proximity is established at statute and common law in cases of commercial host liability. With respect to social hosts, Childs suggests that simply hosting a party where alcohol is served does not establish a positive duty to prevent inebriated guests from causing harm.[28] In both cases, however, Courts will consider whether it was reasonably foreseeable that service of alcohol would cause to harm to the guest or other third parties.

What About Cannabis?

In light of the above, uncertainty arises from the legalization of cannabis. There is no duty of care imposed under any existing federal or Ontario cannabis legislation. Commercial host issues will not apply so long as cannabis bars remain illegal; however, the newly legalized substance may pose challenges for social hosts.

Foreseeability of harm caused by users of cannabis is complex issue. Due to the recent legalization of cannabis, a reasonable person may not be as informed about the potential effects of cannabis on their guests as s/he would be with alcohol. While alcohol has predictable qualities of impairment and consistent rates of onset, cannabis does not.

Alcohol has the benefit of numerous medical studies, as well as longstanding cultural acceptance. Experienced drinkers are now familiar with different concentration amounts in alcohol. A reasonable person will likely be able to anticipate the different effects between two oz. of 40% liquor, versus 8 oz. of 5% beer. However, new users of cannabis may fail to comprehend the difference between percentages of THC of CBD, nor anticipate the personal effects. Even experienced cannabis users may not know the precise percentage of same in cannabis purchased illegally.

Further, the method of consumption may vary the onset and extent of the effects. Edibles make take several minutes or hours to take effect, whereas the effects from smoking are much sooner.

Wrongful death litigation arising from cannabis-induced states of psychosis has emerged as a recent trend in US case law.[29] In such cases, plaintiff’s plead that extreme reactions to cannabis resulted in harm to the consumers and to others, including suicide and murder. Several actions claim the harm was caused several days after the cannabis product was consumed. Does this foreshadow potential claims made against social hosts?

Williams suggests that a social host’s duty may extend beyond ensuring the guest arrives home safely, so long as there is proximity and foreseeability. Future litigation may turn on the reasonable person’s ability to appreciate the effects of cannabis. This may require the use of experts in ways not required in cases involving alcohol. Regardless, each case will likely be decided on the facts, with consideration to the particular knowledge of the parties involved.

Conclusion

Whether a duty of care is owed by social or commercial hosts to their guests and third parties continues to be a fact-specific determination. There is strong indication the case law will continue to develop in light of the myriad circumstances under which a host can provide an intoxicant, know the extent of their guests intoxication, and/or be subject to specific circumstances of proximity with the general public.

Recent developments have debunked any notion that the initial safe return home of an intoxicated guest severs any duty owed to a host. Liability may be established where the host has knowledge or foreseeability with respect to any dangerous behaviour the guest may undertake while intoxicated. The duty, therefore, may be owed up until sobriety.

The legalization of cannabis poses several challenges for insurers of social hosts. Regulation around cannabis is new, while legalization of the substance may entice new users who are unable to accurately gauge their reactions. Hosts must also be aware of the method by which their guests consume cannabis.

For insurers, there remains a cloud of uncertainty that complicates risk assessment. Only time will tell how Courts apply alcohol-inspired tort law to cannabis providers.

[1] Dickerson v 1610396 Ontario Inc, 2010 ONCA 894 at para 30/

[2] 1973 CanLII 16 (SCC), [1973] SCR 239 [Jordan House Ltd].

[3] 1995 CanLII 147 (SCC), [1995] 1 SCR 131 [Stewart].

[4] Jordan House Ltd, supra note 2 at p 249.

[5] Stewart, supra note 3 at para 28.

[6] McIntyre v Grigg, 2006 CanLII 37326 (ON CA) at para 23 [McIntyre]

[7] Ibid note 6.

[8] Pilon v Janveaux, 2006 CanLII 6190 (ON CA) at para 13.

[9] 2006 SCC 18 [Childs].

[10] Ibid at para 18.

[11] Ibid.

[12] Ibid at para 20.

[13] 2019 ONSC 3571 [Hummel].

[14] Hummel, supra note 13 at para 106 and 107.

[15] Childs, supra note 9.

[16] Ibid at para 34.

[17] Williams v Richard, 2018 ONCA 889 at para 24 [Williams].

[18] Ibid at para 25.

[19] Childs, supra note 9 at paras 35-37.

[20] Williams, supra note 17 at para 27.

[21] Childs, supra note 9 at para 44.

[22] Ibid at para 45.

[23] Ibid at para 46.

[24] Ibid at para 44.

[25] supra note 16.

[26] Williams, supra note 17 at para 34.

[27] Williams, supra note 17 at para 46.

[28] Childs, supra note 9 at para 44.

[29] Kirk v Nutritional Elements, No 2016 CV-31310 (Colo Dist Ct, Denver City, Apr 13, 2016) [three children suing cannabis manufacturer in negligence, failure to warn, strict liability, and misrepresentation after their father ingested an edible cannabis product and murdered their mother in psychotic state]; Estate of John Anthony Sdao v Makki & Abdallah Investments, No 322646, 2016 WL 279635 (Mich Ct App Jan 21, 2016) [plaintiff’s estate sue seller of synthetic cannabis in breach of warranty and negligence after suicide]; Tuck v Wixom Smokers Shop, No 330784, 2017 WL 1034551 (Mich Ct App, Mar 16, 2017) [plaintiff sues seller of synthetic cannabis in breach of warranty and negligence after psychotic state resulted in him burning down his house].