Illinois’ Dram Shop Act: Knowing Your Limits, Even When Your Patrons Don’t

By Scott A. Schoen on June 22, 2016 | Posted in Blog

At common law, Illinois businesses that were engaged in the for-profit sale, distribution, manufacturing and wholesaling of alcohol were not liable for injures arising out of alcohol transactions. However in 1872, Illinois’ Dram Shop Act was enacted, which specifically recognized a cause of action against such businesses where an intoxicated person injured another. The Dram Shop Act currently provides that:

“Every person who is injured within this State, in person or in property, by any intoxicated person has a right of action in his or her own name, severally or jointly, against any person, licensed under the laws of this State or any other state to sell alcoholic liquor, who, by selling or giving alcoholic liquor, within or without the territorial limits of this State, causes the intoxication of such person.” 235 ILCS 5/6-21.

Under the Act, once a non-negligible amount of alcohol is provided to an intoxicated person, the for-profit seller or provider may be exposed to liability. While many sellers of open alcohol are keenly aware of the expenses and potential liability that can follow from the misuse of their products, many sellers of packaged alcohol are unaware of their potential exposure. Under the Dram Shop Act, recoverable damages may include an injured person’s medical expenses, pain and suffering, loss of means of support, society, and/or lost wages. However, there is a statutory limit to the amount an individual may recover under the Act. This makes insurance coverage a very valuable asset considering the sheer number of alcohol transactions the average business executes on a daily basis. In these circumstances, insurance can offset the costs of settling cases of uncertain liability, and pay for the defense against frivolous suits.

Fortunately, under certain circumstances Dram Shop actions may be defensible based on the contributory conduct of an injured person and their relationship to the intoxicated person. For instance, where an injured party provokes an intoxicated person into committing harmful conduct, such as engaging in a bar fight, the seller or provider may avoid liability by showing that the injuries were caused in part by the injured party’s own contributing actions, or “provocation.”

The “complicity,” or “drinking companion,” defense may also apply. This defense precludes recovery for an injured party that actively contributed to or procured the intoxication of the intoxicated person. For example, where an injured party accepts a ride home with an intoxicated person and they are involved in a vehicle accident, the complicity defense precludes recovery for the injured party if the defendant can show that he or she actively contributed or procured the intoxication of the intoxicated driver.

In today’s litigious society, for-profit alcohol sellers, distributors, manufacturers, and wholesalers are engaged in a risk-inherent business. Luckily, once business owners are aware of their potential liability, and the ways in which to limit their liability, they can plan for worst-case scenarios and protect themselves by taking proactive steps to obtain insurance and train their employees to identify potentially troublesome patrons and situations.

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