11: Liability Concerns

Administrative Liability

The Pennsylvania Liquor Code makes it illegal for licensees, or their servants, agents or employees, to serve alcoholic beverages to visibly intoxicated patrons (VIPs) and minors. Violations of that law by licensees may result in fines from $1,000 to $5,000 (unless, at the time of the sale, the licensee was RAMP certified and had not sold to VIPs or minors in the previous 4 years, then the licensee’s fine would be from $50 to $1,000); suspension or revocation of the liquor license; and mandated RAMP certification.

This is often referred to as “strict liability” because licensees are always responsible for the actions of their employees – even when the licensee is absent.

Criminal Liability

There are two different ways a person could be fined criminally, under the Pennsylvania Liquor Code and under the Pennsylvania Crimes Code.

A. The Pennsylvania Liquor Code

• If a licensee or employee sells to a visibly intoxicated person or minor, he/she could be fined up to $5,000 and/or be imprisoned from 3 months to 1 year.
• Any other person who violates any provision of Article IV of the Liquor Code commits a misdemeanor and could be fined from $100 to $500.

B. Pennsylvania Crimes Code

• People who sell or furnish alcohol to minors can also be prosecuted criminally under the Pennsylvania Crimes Code. Anyone convicted of willfully and knowingly selling or furnishing alcoholic beverages to a minor faces a minimum fine of $1,000 for the first offense and $2,500 for each subsequent offense, as well as a possible jail term of up to one year for each offense.

Civil Liability

“Dram shop” is a legal term in the United States referring to a bar, tavern or the like where alcoholic beverages are sold. Traditionally, it referred to a shop where spirits were sold by the dram, a small unit of liquid.

“Dram shop liability” refers to the body of law governing the liability of taverns, liquor stores and other commercial establishments that serve alcoholic beverages. Generally, dram shop laws establish the liability of establishments arising out of the sale of alcohol to visibly intoxicated persons or minors who subsequently cause death or injury to third-parties (those not having a relationship to the bar) as a result of alcohol-related car crashes and other accidents.

Dram shop liability is commonly called third-party liability because the lawsuit involves three parties:

• 1st party is the licensee and/or server
• 2nd party is the minor and/or intoxicated patron
• 3rd party is the victim

Dram shop cases have resulted in verdicts awarding substantial amounts of money to those parties involved. Violators have been successfully sued for everything they own, including their businesses, houses and other personal property. The Liquor Code provides that no licensee shall be liable to third parties on account of damages inflicted upon them off of the licensed premises by customers of the licensee unless that customer was sold, furnished or given alcohol by the licensee or its servants, agents or employees, when that customer was visibly intoxicated.

Slide 11: Liability Concerns