The Trends in Dram Shop Laws and How They Affect the Hospitality Industry: Balancing Competing Policy Considerations of Tort Reform and Curbing Drunk Driving

Abstract

This article outlines the history of and the current trends in dram shop legislation throughout the United States. It will be seen that the term "dram shop" law can have extremely divergent meanings from state to state. In part, this is because such laws are designed to address competing and difficult-to-reconcile public policies. On the one hand, there is the public interest in curbing the incidence and consequences of drunk driving, which is an argument in favor of increasing the liability of alcohol vendors and servers. On the other, there is the public interest in keeping insurance available and its costs under control, which indicates a policy of reducing the liability of those in the hospitality industry and thus decreasing their exposure (and, hence, the exposure of their insurance carriers) to insured risks. The purpose of this article is to explain these competing policies and to show how the states are currently balancing them in enacting or amending their dram shop laws. Those in the hospitality industry will then be better able to predict and, through informed participation in the legislative process, influence the direction of this important area of the law. Key Words: Dram shop laws, liquor liability, drunk driving, tort reform, public policy.