Publication

Social Host Liability Claims: 3 Insurer FAQs

Published:

November 13, 2024

Author(s):

• Catherine Hirbour
• Céleste Branch
• Patrick Kerr

Share

Print

Social host liability for injury to a third party – and coverage of social host liability claims – isn’t straightforward. Social host liability claims are fact-specific and due diligence in an investigation is key to analyzing the claim correctly. To help you understand social host liability generally, and to assess whether you have a duty to defend and potentially cover the liability of an insured social host specifically, here are the answers to three questions insurers frequently ask us.

1. Does a social host owe guests or third parties a duty of care?

A host of any kind isn’t liable for injuries to a guest or a third party injured by that guest unless it owed them a duty of care. There are three types of “hosts”: 

Employer Hosts. An employer host is one where an employer hosts an event, often an office party or the like, and has an employment relationship with either an injured employee and (or) a third party injured by an employee. Employers owe employees a duty to ensure a safe workplace. This obligation can extend beyond the four corners of the employer’s premises and the official “on-duty” hours to employer-hosted social events. Often, this duty can even surpass that of commercial hosts due to the unique and special relationship between employers and their workers. 

Commercial (a.k.a. Public) Hosts. A commercial host is one that provides alcohol to the public for profit. Commercial host liability is relatively straightforward and well-defined: commercial hosts are subject to statutory obligations respecting alcohol consumption monitoring and premises control. It’s reasonable to expect commercial hosts to protect the public interest and the public relies on them to do so. Commercial hosts therefore owe a duty of care to members of the public who could be injured by an intoxicated patron.

Social Hosts. A social host is typically one in a non-commercial setting, like a friend hosting an event at their private residence, that provides guests with either a venue in which to consume alcohol or other impairing substances (the “BYOB” scenario) or provides them with alcohol without financial gain (the “open bar” scenario). Whether a social host owes a guest or a third party a duty of care is a more complex analysis.

The Supreme Court of Canada’s 2006 decision in Childs v. Desormeaux remains the leading Canadian decision on a social host’s liability to third parties injured by a guest. A well-known drinker without a license or insurance was a guest at a “BYOB ” New Year’s party hosted by friends at their home. The hosts didn’t supply or serve alcohol or provide the guest with alcohol. After leaving the party, the guest was involved in an accident that left the other vehicle’s passenger paralyzed. The injured passenger sued the hosts. The B.C. Court of Appeal dismissed the claim, stating it could not “accept the proposition that by merely supplying the venue of a BYOB party, a host assumes legal responsibility to third party users of the road for monitoring the alcohol consumed by guests … It would not be just and fair in the circumstances to impose a duty of care.” The Supreme Court of Canada agreed, deciding the social hosts owed no duty of care to the injured passenger: they weren’t involved in serving alcohol at the party so the risk to a third party wasn’t foreseeable; they had no statutory duty to monitor the guest’s alcohol consumption or control the structure of the atmosphere in which alcohol was served; and it wouldn’t be just and fair in the circumstances to impose a duty of care.

The Court in Childs emphasized that foreseeability alone can – but doesn’t necessarily – establish a duty of care on a social host. In this context, the distinction between an overt act and a failure to act becomes very relevant:

Overt Act. Foreseeability alone is more likely to establish a duty of care where the host’s overt act directly caused harm to the injured party. However, the Court specifically noted that hosting a party at which alcohol is served isn’t enough on its own to establish the necessary proximity to trigger a duty of care on the hosts to third parties whom an intoxicated guest might injure.

Failure to Act. Foreseeability alone is less likely to establish a duty of care where it was the host’s failure to act that caused the harm to the plaintiff. The Court examined the nature of the relationship between the host and the guest to determine whether there’s a nexus between them – “something more” – to create a positive duty to act. Judicial decisions indicate this “something more” could be facts suggesting, for example, the host invited the guest to an inherently risky environment, the host’s knowledge of a guest’s level of intoxication or future plans to engage in a potentially dangerous activity that subsequently causes harm, or a paternalistic relationship between the parties. And while a failure to act can be negligent, the mere fact a person faces danger or has become a danger to others doesn’t generally impose on others a positive duty to act.

In Childs, the Supreme Court of Canada found the claim was based on failure to act: having organized the party, the hosts didn’t stop the guest from driving, characterizing the social hosts’ alleged negligence as failure to interfere with the guest’s autonomy – and that alone wasn’t enough to create a duty of care. Post-Childs cases demonstrate whether a social host owes a duty of care to guests or third parties is fact-specific – and that it’s challenging to trigger such a duty. There are few, if any, reported decisions in which a court has found such a duty of care on the merits; most decisions deal with the question in the context of summary dismissal applications, and whether the existence of a duty of care requires a trial or not. For example:

Wenzel v. Desanti, 2011 ABCA 226. In this case, an intoxicated guest was allegedly assaulted at a party after which he was involved in a car accident. The guest filed a personal injury claim against the driver. In turn, the driver and the car’s owner, filed a third-party claim against the hosts of the party. The Court ultimately granted the hosts’ application for summary judgment, concluding the hosts had no knowledge of the circumstances that led to the fight and subsequent assault. They were actively supervising the party, taking steps to ensure its safe conduct. Hosting a party does not create a legal relationship in which hosts are responsible for the intoxication of a guest. As a result, no duty of care existed, making the standard of care and breach irrelevant. The responsibility for the guest’s intoxication or provocation leading to the assault did not lie with the hosts.

Sabourin (Litigation guardian of) v. McKeddie. In this 2016 case, a 16-year-old passenger in a car that went out of control suffered serious injuries after they and a group of people had been socializing, including consuming alcohol. The driver was staying with their father, another defendant. The passenger alleged the father had provided beer to the group and participated in discussions with them. The Ontario Superior Court summarily dismissed the claim against the father. The evidence didn’t support the claim the father had attracted or invited the guest to an inherently risky activity the father controlled, that they knew the guest’s age or that underage drinking was taking place, or that they provided alcohol to anyone or witness obvious signs of intoxication and there was insufficient evidence to establish a paternalistic obligation on the father’s part and no positive duty of care toward the guest.

McCormick v. Plambeck, 2022 BCCA 219. In this case, a 17-year old guest attended a party hosted by the homeowners’ daughters. The homeowner parents allowed underage drinking and drug consumption at the party. The guest arrived and left the party on foot and didn’t appear visibly intoxicated. After leaving the party, the guest and a friend stole a vehicle, resulting in an accident that caused the guest to suffer a brain injury. The guest sued the parent homeowners for the injury. The B.C Supreme Court dismissed the case, ruling the duty of care did not extend to foreseeing that party guests would steal a vehicle and drive it unsafely. The Court of Appeal agreed, finding foreseeability was not established and the duty of care did not arise in the case: the foreseeability analysis needed to consider the circumstances of a 17 and 18-year-old walking home from the party and the judge didn’t consider irrelevant factors, such as the lax community attitude towards underage drinking.

In contrast, in the 2017 case Wardak v. Froom, an underage, intoxicated party guest left a gathering hosted by an underage friend and was involved in a severe single-car accident. The guest sued the friend’s parents, arguing they were aware of the underage drinking and had breached a duty of care owed to the guest. The Ontario Superior Court of Justice refused to summarily dismiss the action, deciding a trial was necessary because there was a possibility of a finding of liability against the parent hosts. The Court noted two important distinctions between Childs and this case: in Childs the guest was an adult so there was no inherent paternalistic relationship between the host and the guest; and the injured party in Childs wasn’t a guest but the victim of a guest’s drunk driving.

2. What standard of care do social hosts owe guests and third parties?

In Canada, the reported decisions of social host liability have dealt primarily with the issue of whether a duty of care exists or not. Accordingly, there are few (if any) reported decisions addressing in detail the question of a social host’s standard of care. However, in Childs, the decision of the Ontario Court of Appeal (which the Supreme Court of Canada affirmed) does offer guidance:

Relatively Lower. The Court noted the standard of care required of a social host will be lower than that of a commercial host. Unlike social hosts, there’s public reliance on a commercial host to comply with the rules prohibiting serving too much alcohol to a guest. The Court referenced the oft-used standard of what a reasonable person would do in the circumstances, suggesting the standard of care is likely to be that of a reasonable social host in the circumstances. If the patron tries to drive, the commercial host must take reasonable steps to prevent them from doing so.

Reasonableness Indicia. While in Childs, the applicable standard of care was a non-issue given the Court’s decision the social hosts owed no duty of care.  If a court were to find a duty were owed, indicia of whether the social host met the standard could include: 

• Did they plan in advance by, for example, having a designated driver, being prepared to have people sleep at their place, and communicating these options to the guests.

• Did they prevent over-indulging by providing alcohol-free alternatives and food, and/or discouraging shots and/or games involving the chugging of alcohol.

• Did they have a plan to deal with over-indulgers, for example, reminding them of the advance plan, taking their car keys or offering to call them a cab and even pay for it.

3. Do insurance policies typically cover social host liability claims?

Some academics have suggested that one reason courts have been reluctant to recognize a duty of care against social hosts are policy considerations based on lack of coverage for social host liability under the social host’s homeowner’s insurance policy and the cooling effect social host liability may have on social gatherings. Keep in mind the possibility of insurance coverage often determines who gets sued. Therefore, determining whether the social host’s insurance policy insures them for social host liability is of prime importance.

Duty to Defend. As always, before even getting to coverage, the question is whether the insurer owes the insured social host a duty to defend that claim on the insured’s behalf. As always, the duty to defend and coverage determinations are inextricably linked: there can be no duty to defend without a likelihood that indemnity for the claim will be covered under the insurance contract. And as always, contractual coverage turns on the precise terms of the relevant policy(ies) – including both inclusions and exclusions. The pleadings rule dictates that a mere “possibility” a claim falls within coverage for indemnity based on the pleadings triggers the duty to defend – even if  later, coverage concerns are raised or it’s determined there’s no duty to provide indemnity. This requires careful examination of the pleadings and a focus on the true substance of the conduct on which the claim is based – not necessarily how the claim is framed.

Overt Acts v. Failure to Act. It’s at this point at which the distinction between overt acts and failure to act becomes crucial:

• Overt Acts. Homeowners’ policies typically include a clause providing the insurer will pay the insured for all amounts for which the insured becomes legally liable to pay as compensatory damages because of unintentional bodily injury or property damage arising out of their personal actions or their ownership, use or occupancy of the insured premises. Courts have confirmed such clauses also covers the insured’s negligent overt acts.

• Failure to Act. However, most homeowners’ policies don’t cover an insured’s failure to act, either by way of an express exclusion or by limiting coverage to personal “actions”.

Where do social host liability claims fall on the spectrum of overt act and failure to act? While Childs didn’t appear to involve an insurance coverage claim, the Court’s response to the passenger’s argument in support of the existence of a duty of care is instructive. The passenger framed the claim against the social hosts as based on overt acts: facilitating the consumption of alcohol by organizing a social event where alcohol was consumed on their premises. But the Supreme Court of Canada framed the basis of the claim as failures to act: having organized the party, the hosts didn’t stop the guest from driving, characterizing the social hosts’ alleged negligence as failing to interfere with the guest’s autonomy. This interpretation suggests there would be few occasions on which an insurer’s duty to defend a social host liability claim would arise. But it’s important to bear in mind:

• Childs was an adjudication of the merits of the claim – not whether an insurer owed the insured a duty to defend, a duty triggered by the lower standard of a mere “possibility” of coverage.
• Childs is fact-specific; depending on the circumstances, a court could accept the social host’s behaviour could be framed as overt acts rather than a failure to act based on the pleadings.

These distinctions could lead to a different outcome. For example, in Gilbert Estate v. MacDonald Estate, 2002 NBQB 326, a 17-year-old was killed while operating an ATV. The deceased’s parents sued the ATV owner alleging they were negligent by:

• Giving or supplying alcohol to the deceased and then permitting, inducing, encouraging or enabling them to operate the ATV when the owner knew or ought to have known the deceased wasn’t capable of safely doing so because they were intoxicated.
• Permitting the deceased to consume alcohol at the owner’s home and permitting, inducing, encouraging or enabling them to operate the ATV when the owner knew or ought to have known the deceased wasn’t capable of safely doing so because they were intoxicated.
• Permitting, inducing, encouraging or enabling the deceased to operate the owner’s ATV when the owner knew or ought to have known the deceased wasn’t capable of safety doing so because they were intoxicated.
• Such further and other negligent acts as may appear.

The parents sought damages, including punitive or exemplary damages, arising from the owner’s reckless and wanton disregard of the deceased. The claim engaged two relevant insurance policies the owner held; both insurers argued there was no policy coverage for the claims and thus no duty to defend. But the Court disagreed and found both insurers owed the insured owner a duty to defend:

Standard Auto Policy. The auto policy listed both the owner and the deceased as insured drivers and the S.P.F. No. 1 exclusion for the insured’s liability for loss resulting from the death of an insured was deleted. The auto insurer claimed it had no duty to defend the claims against the owner for two reasons:

• The owner’s liability, if any, related to social host obligations for which there was no policy coverage. The Court, however, found a duty to defend based on the allegation the owner allowed the deceased to operate the vehicle when their ability to do so was affected by alcohol.

• Regardless, the deceased wasn’t a third party under the policy thus no indemnity would be provided. The Court, however, found a duty to defend because the exclusion of the deceased insured was removed from S.P.F. no. 1, entitling them to Section A coverage.

Homeowners’ Policy. The policy covered bodily injury arising out of the insured’s actions but excluded claims for punitive damages, bodily injury caused by any intentional act or failure to act, and for claims arising from the ownership, use or operation of any motorized vehicle. The homeowners’ insurer relied on all exclusions to deny to duty to defend. The Court, however, found a duty to defend because it was conceivable on the pleadings that the owner insured could be liable for supplying alcohol to the young deceased independent of their subsequent ATV operation.

Please contact your McInnes Cooper lawyer or any member of our Insurance Defence Team @ McInnes Cooper to discuss coverage for social host liability.

Share

Print