By Peter A. Berdon as seen on thebeveragejournal.com
One of the most troubling letters a retailer can receive is a letter from a lawyer advising the retail that a “dram shop” claim will be made against the retailer. This article will discuss what the retailer should do when receiving such a notice, what liabilities a retailer may face for the sale/service of beverage alcohol and how to best protect against such claims.
What to do with a “dram shop” notice?
- Preserve all evidence. Preserving any evidence that exists is critical as soon as the retailer become aware of either an actual claim or even the possibility of a claim, even if formal notice is not received. Under Connecticut Law formal notice of claim under the Dram Shop Act need not be served upon the retailer until 120 days after injury and in the case of day 180 days. This time period is often too long to preserve often critical evidence such as video recordings of the patron who was served in the establishment which often “over-right” every 14 days.
- Call your lawyer. Obtaining competent legal advice is critical. A lawyer who is familiar with defending dram shop claims can assist in helping to preserve evidence that may exculpate the retailer as well as providing proper notice to insurance carriers who may be obligated to provide a defense of the claims.
- Notify your insurance company. If you have dram shop and/or liquor liability insurance coverage you should notify your insurance carrier. When providing this notice you should first seek the advice of your lawyer and/or insurance agent to ensure that all requisite step are taken and notice is sent to the proper addresses.
What is the basis for a “dram shop” claim?
- Often the reference to a “dram shop claim” is used to refer to any liability for the sale of beverage alcohol; however, there are several different claims with in this larger umbrella.
- “Dram Shop Act” claim. A Claim under Connecticut’s Dram Shop Act, CGS § 30-102 requires a claimant establish only two key facts: i) sale or service of beverage alcohol to an intoxicated person; and ii) harm resulting from that sale or service. Claims brought under a dram shop act such as Connecticut’s are known as strict liability claims – meaning no fault needs to be established by the claimant. Therefore no matter how careful a retailer may be and not matter how strict the retailer may be in its sales procedures, if a sale/service occurs to an intoxicated person and harm results then the retailer will be liable. As draconian as this sounds the retailer’s liability is limited to $250,000 per person and $500,000 per an occurrence.
- “Recklessness” claims. Connecticut does not recognize negligence claims – that is the failure to exercise a reasonable degree of care – for the sale or service of alcohol to adults. These claims are barred by the Dram Shop Act. However, Connecticut does permit claims arising out of the reckless sale and service of beverage alcohol. To successfully bring such a claim, a claimant must establish either the sale or service to a visibly intoxicated person and that the retailer’s actions involved an “extreme departure from ordinary care”.