By Peter A. Berdon, Esq.
One of the most troubling letters a retailer can receive is one from a lawyer advising them of a pending “dram shop” claim. This article will discuss what the retailer should do when receiving such a notice, what liabilities they 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 is critical as soon as the retailer becomes aware of either an actual claim or the possibility of a claim, even if formal notice is not received. Under Connecticut Law formal notice of a claim under the Dram Shop Act needs not be served until 120 days after injury, or 180 days in the case of death. This time period is often too long to preserve critical evidence such as video recordings, which often “over-write” every 14 days.
› Call your lawyer. Obtaining competent legal advice is critical. A lawyer experienced with defending dram shop claims can assist in helping to preserve evidence that may exculpate the retailer and provide proper notice to insurance carriers who may be obligated to defend the claim.
› 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 steps are taken and notice is sent to the proper addresses.
What is the basis for a “dram shop” claim?
› Often the phrase “dram shop claim” is used to refer to any liability for the sale of beverage alcohol; however, there are several different claims within 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 no 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.
› “Negligence” and “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. Significantly, negligence claims are permitted when the sale or service is made to someone under the age of 21. 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 or that the retailer’s actions involved an “extreme departure from ordinary care.”
While a full exploration of what retailers can do is beyond the scope or space of this article, the following basic items should be considered.
› Server Training. Require all employees who serve beverage alcohol to hold a current valid server training certificate from a recognized program such as TIPS® or SafeServe®.
› Carding. Establish a carding procedure to minimize the risk of any sales to minors.
› Age Statement Forms. Use state approved Age Statement forms if the age of the person is in question and develop a system to retrieve the form for each sale.
› House Rules. Establish “House Rules” for the service of alcohol, including overall quantities to be served to any one patron and having managers address situations where a patron may become intoxicated.
Attempting to prevent claims may take time, money and energy, it is far easier than defending them. Invest up front and make sure you have the proper insurances in place, and if you have questions, seek the advice of a competent professional.
This column is not intended to be legal advice; consult an attorney for answers to your specific questions and situation.
Attorney Berdon, a partner with Berdon, Young & Margolis, PC, has represented wholesalers, manufacturers, package stores, restaurants and bars before the State of Connecticut DCP and the Federal TTB as well as in litigation matters in court since 1991. Contact firstname.lastname@example.org or www.bymlaw.com.