It’s the most wonderful time of the year. And for many, this holiday season marks the return to social gatherings of pre-pandemic proportions. With revelers sure to crowd restaurants and bars, there is also an increased risk of alcohol-related accidents and injuries. So, what can permittees do to avoid the pitfalls of serving one too many cups of cheer?

First, permittees should know the law. North Carolina has a public policy of protecting individuals from injuries caused by intoxicated persons. To that end, N.C. Gen. Stat. § 18B-305 provides that it is unlawful for alcohol permittees or their employees to knowingly sell or give alcoholic beverages to any person who is intoxicated. A violation of this law can give rise to a negligence action against the permittee by a third party who has been injured by an intoxicated patron. To prove this claim, the injured individual has the burden to show (1) that the patron was intoxicated and (2) that the permittee knew, or should have known, that the patron was intoxicated at the time he or she was served.

“Intoxication” here means that the patron’s mental or physical functioning is materially impaired as a result of the use of alcohol. This requires a showing that the patron had an outward manifestation of impairment, such as bloodshot eyes, slurred speech, poor coordination, and/or smell of alcohol. In other words, there must be proof of visible signs sufficient to put the permittee on notice of the patron’s impaired condition at the time of service in order for liability to be imposed.

In addition to a common law negligence claim, there is a statutory cause of action for injuries caused by alcohol sales to an underage person. N.C. Gen. Stat. § 18B-121 provides that an “aggrieved party” has a claim for damages against a permittee if: (1) the permittee (or their agent or employee) negligently sold an alcoholic beverage to an underage person; (2) the underage person causes a motor vehicle accident while under the influence; and (3) the injury was proximately caused by the underage driver’s negligent driving while impaired. Of note, the “aggrieved party” does not include the underage person or anyone who aided or abetted the sale of alcohol to the underage person.

As is so often, an ounce of prevention is worth a pound of cure when it comes to alcohol-related accidents. Permittees should set clear policies for employees to understand the signs of intoxication, recognize when it is time to stop service, and know what to do in the event a patron has been overserved. Of course, these policies are meaningless without proper instruction and enforcement. Employees must be trained on the policies and be held accountable.

In the event a customer has been overserved, it is crucial that employees intervene. Depending on the situation, it may be appropriate to ask the patron’s family or friends for assistance, call an Uber or Lyft, or offer food and water. It may be necessary to involve the police if the customer shows signs of aggression or violence.

Even with the best policies in place, however, alcohol-related incidents can still happen. Permittees should be prepared to defend against claims brought by injured parties. Therefore, employees should maintain complete records of all drinks served. They should also keep an incident log for instances when service has been refused. These documents can be used to demonstrate that the permittee acted reasonably in light of the circumstances.

Finally, permittees should notify their insurance companies about all potential dram shop claims. With the help of an experienced attorney, permittees can put themselves in the best position to investigate and defend the claim.

This post was originally published on November 23, 2021.