The Supreme Court of Canada rendered its decision in Stewart v. Pettie, infra. 17 years ago and it has been almost 30 years since Jordan House Ltd. v. Menow, infra.; however the law in the area of host liability is far from defined.  At a fundamental level, a commercial host will be liable for failing to take reasonable steps to prevent foreseeable harm to patrons or third parties.  Stewart and Jordan House determined that bars and taverns have a duty to protect intoxicated patrons from becoming a danger to themselves or a third party as a result of their intoxication.  As will be discussed in further detail below, the Supreme Court of Canada in Childs v. Desormeaux, infra. considered the bookend of host liability concluding that social hosts do not per se owe a similar duty of care to adult guests and third parties as far as intoxication is concerned.  As the Court put it, “a person who accepts an invitation to a private party does not park his autonomy at the door.”

Between commercial and social hosts lay a gamut of relationships with less defined limits as to the existence of a duty in general, and the extent of the standard of care in the circumstances.  One of those relationships is the employer-employee relationship.  While consideration of potential liability for each situation is heavily fact dependent, an examination of the case law gives some indication as to how the courts are assessing these claims.  In this paper, the notion of “employer host” liability will be considered.

Commercial Host Liability and the Evolution of the Duty of Care

In the 1995 Supreme Court of Canada decision of Stewart v. Pettie, [1995] 1 S.C.R. 131 the SCC clarified the law concerning commercial hosts and the duty of care owed by them to third parties.  The Court confirmed the law set out in Jordan House Ltd. v. Menow [1974] S.C.R. 239 that a duty of care is owed by drinking establishments to their customers who become intoxicated to the extent that they are unable to take care of themselves.  From this beginning, finding that such a duty is also owed to “third parties who might reasonably be expected to come into contact with the patron, and to whom the patron may pose some risk” was a logical progression [Stewart, para. 28].  The Court clarified the difference between the establishment of a duty and the standard of care applicable to that duty.  The question of duty concerns the existence of a sufficient relationship between the parties to justify the imposition of obligations on behalf of one of the parties for the care of the other.  This is properly a question for the Court to decide.  The legal standard of conduct for the party owing the obligation and whether that standard is met in the particular circumstances is for the jury to decide [Stewart, para. 32].  From this it may be inferred that the existence of a duty of care is properly a question of law based on the relationship between the parties, whereas the standard of care is a question of fact to be determined upon the specific facts of each individual case.

Over-service of alcohol is not in itself a negligent act so as to raise a positive obligation on the establishment to prevent harm to any third party, “it is only if there is some foreseeable risk of harm to the patron or to a third party that [the establishment] and others in their position will be required to take some action” [Stewart, para. 35].  As Justice Major found at paragraph 36:

Without a reasonable foreseeable risk of harm to [the patron] or a third party, the fact of over-serving [the patron] is an innocuous act.  Therefore, liability on the part of [the establishment], if it is to be found, must be in their failure to take any affirmative action to prevent the reasonably foreseeable risk to [the Plaintiff].

According to Justice Major, and relying on the decision of Justice Wilson from Crocker v. Sundance Northwest Resort Ltd., [1988] 1 S.C.R. 1186, there are two questions which need to be answered in every case:

The first is whether the defendant was required, in the circumstances, to take any positive steps at all.  If this is answered in the affirmative, the next question is whether the steps taken by the defendants were sufficient to discharge the burden placed on them.  [Stewart, para. 41]

However, in determining when the relationship between alcohol purveyor and consumer requires positive obligations, the basic tenet of tort law comes into play, that is, the foreseeability of risk.  According to Justice Major, “where no risk is foreseeable as a result of the circumstances, no action will be required, despite the existence of a special relationship” [Stewart, para. 49].

At the other end of the spectrum is the Supreme Court of Canada decision of Childs v. Desormeaux, 2006 SCC 18.  While not an employer host liability scenario, it is impossible to consider the evolution of the jurisprudence without recourse to the comments of McLachlin C.J.C. in Childs regarding the duty of care in general.  In this decision, the SCC considered for the first time the issue of social host liability.  The Court held that the differences between a social and commercial context “mean that the existence of a duty on the part of commercial providers of alcohol cannot be extended by simple analogy to the hosts of a private party” [Childs, at para. 23].  The Court went on to determine whether a duty arose on the part of the social host such that the host could be liable for a failure to act.

The Court’s comments at paragraphs 31-32 are helpful:

Foreseeability is not the only hurdle Ms. Childs’ argument for a duty of care must surmount. “Foreseeability does not of itself, and automatically, lead to the conclusion that there is a duty of care”: G. H. L. Fridman, The Law of Torts in Canada (2nd ed. 2002), at p. 320. Foreseeability without more may establish a duty of care. This is usually the case, for example, where an overt act of the defendant has directly caused foreseeable physical harm to the plaintiff: see Cooper. However, where the conduct alleged against the defendant is a failure to act, foreseeability alone may not establish a duty of care. In the absence of an overt act on the part of the defendant, the nature of the relationship must be examined to determine whether there is a nexus between the parties. Although there is no doubt that an omission may be negligent, as a general principle, the common law is a jealous guardian of individual autonomy. Duties to take positive action in the face of risk or danger are not free-standing. Generally, the mere fact that a person faces danger, or has become a danger to others, does not itself impose any kind of duty on those in a position to become involved. In this case, we are concerned not with an overt act of the social hosts, but with their alleged failure to act. The case put against them is that they should have interfered with the autonomy of Mr. Desormeaux by preventing him from drinking and driving. It follows that foreseeability alone would not establish a duty of care in this case.

The Court restates the law that a positive duty exists where there is foreseeability of harm and where the relationship between the parties establishes “a special link or proximity”.  The Court posits three scenarios where legal strangers are brought into proximity and positive duties are imposed:

• Where a defendant “intentionally attracts and invites third parties to an inherent and obvious risk that he or she has created or controls” [para. 35].  Examples include a boat captain, organizers of a competition, manufacturers of dangerous goods;
• Where there are “paternalistic relationships of supervision and control, such as those of parent-child or teacher-student” [para. 36];
• Finally, where defendants “either exercise a public function or engage in a commercial enterprise that includes implied responsibilities to the public at large” [para. 37], commercial hosts fall into this category.

The Court found that there was insufficient proximity between the hosts of a private party and users of a public roadway.  In addition, there was no finding that the hosts knew or ought to have known that the defendant was intoxicated, which relates to the foreseeability aspect of the inquiry.

The Court went on to analyze whether social hosts fall into any of these three categories and determined that on the facts of the case, they did not.  Significantly, at paragraph 44, the Court held:

Holding a private party at which alcohol is served – the bare facts of this case – is insufficient to implicate the host in the creation of a risk sufficient to give rise to a duty of care to third parties who may be subsequently injured by the conduct of a guest. The host creates a place where people can meet, visit and imbibe alcohol, whether served on the premises or supplied by the guest. All this falls within accepted parameters of non-dangerous conduct. More is required to establish a danger or risk that requires positive action. It might be argued that a host who continues to serve alcohol to a visibly inebriated person knowing that he or she will be driving home has become implicated in the creation or enhancement of a risk sufficient to give rise to a prima facie duty of care to third parties, which would be subject to contrary policy considerations at the second stage of the Anns test. This position has been taken in some states in the U.S.A.: N.J. Stat. Ann. ss. 2A: 15-5.5 to 5.8 (West 2000). We need not decide that question here. Suffice it to say that hosting a party where alcohol is served, without more, does not suggest the creation or exacerbation of risk of the level required to impose a duty of care on the host to members of the public who may be affected by a guest’s conduct.

The Court found that there was no duty upon the hosts to monitor the consumption of guests, that no one relied upon them to do so and dismissed the claim.

Employer Host Liability – Case Summaries

If an employee consumes alcohol at a work or at a work related function and then is injured or injures others as a result of his or her intoxication, does the employer face liability in the same way a bar or tavern would?  There are only a handful of cases in Canada that have considered this issue.

Jacobsen v. Nike Canada Ltd. (1996) 19 B.C.L.R. (3d) 63, [1996] 4 W.W.R. 488 (BCSC)

In this case, the 19 year old plaintiff was asked by his employer to assist in setting up a trade show exhibit.  He was required to bring his own vehicle to the site.  During the course of the day, his supervisor brought in beer for the crew while they worked throughout the evening.  No controls were placed on the consumption of alcohol and it was determined that the supervisor did not monitor the consumption of his employees.  The plaintiff attended two local pubs after work and eventually walked back to his car near 2:00am.  While driving home, the plaintiff fell asleep and was involved in a single vehicle crash suffering a spinal injury.

The defendant conceded that a duty of care was owed to the plaintiff.  The Court found that Nike did not meet the standard of care in the circumstances, that being the same standard as tavern owners (again as conceded by Nike).  The employer provided alcohol to it employees, failed to monitor consumption and took no steps to ensure the plaintiff did not drive while intoxicated.  The Court also declared that the employer knew or should have known how much the plaintiff had to drink that evening and that he was likely visibly impaired as a result.   During the course of trial it was admitted by Nike that it would have been reasonable to assume that the plaintiff would have had to drive home from the worksite that evening.  The Court stated at paragraph 118:

The law imposes a higher standard of care on an employer than on a tavern-owner.  If it is considered too onerous to tavern-owners to monitor their patrons’ consumption, the same cannot be said of employers who provide alcohol to their employees.  An employer is required to safeguard its employees from unreasonable risks.  The risk of injury from becoming impaired from consuming alcohol and driving in that condition is obvious to any reasonable person.  It is not too onerous, in my view, for an employer who provides alcohol to its employees to monitor consumption, so that it is in a position in the appropriate circumstances to take affirmative steps to prevent the foreseeable risk of injury.  That is especially so in a situation such as this, where the alcohol was provided free in large quantities to a small number of young men who were working hard in a hot environment.

The Court also found that the employer should have taken the plaintiff’s special circumstance into account; he was the youngest member of the crew, an inexperienced drinker, and would have had a 40 minute drive home from the worksite.  These facts were known to the supervisor.

The Plaintiff in this case admitted that he contributed to his own injuries with his consumption of alcohol but argued that the employer should still bear most of the liability.  The Court found that he had no prior expectation of drinking and had no ability to make plans in advance for alternate methods of getting home.  The Court found the defendant 75% liable for the Plaintiff’s injuries.

Clarke v. Connell (1997) 298 A.R. 1, 10 C.P.C. (4th) 276 (ABQB)

This case considered an application for summary dismissal of the plaintiff’s action against the employer for an assault which occurred at an office Christmas party.    The plaintiff alleged that the employer was responsible for the defendant’s assault on the plaintiff which occurred as a result of the defendant’s intoxication.  The employer argued that the assault was not foreseeable, and therefore no preventative steps were required.  The Court was not prepared to say that the plaintiff had no chance of success and noted that the area of law regarding employer liability in these situations was “in a state of infancy.”  The application was dismissed but not the action.

John v. Flynn (2001) 201 D.L.R. (4th) 500, 54 O.R. (3d) 774 (ONCA)

The Ontario Court of Appeal considered the issue of an employer’s duty to third parties who were injured as a result of an intoxicated employee.  In this case, the employee had a known alcohol abuse problem and was intoxicated at work.  He subsequently went home for dinner and was involved in a collision after leaving his home. The Court, at paragraph 26, recognized that there was a duty on the employer to provide a safe working environment, but limited that to the workplace itself.  Considering the duty of employers to third parties, the Court held at paragraph 33:

The fact that Flynn was involved in the [Employment Assistance Program (EAP)] (though this was not known by his supervisor on the night in question) and the fact that Eaton Yale was aware that some drinking was occurring on its premises, without more, are not sufficient to establish an expansive duty of care on Eaton Yale to all members of the public who may come into contact with Eaton Yale employees outside the Eaton Yale plant… A more thorough examination of the prerequisite issue of duty would have revealed that in the case at bar, there is simply no basis to hold Eaton Yale liable for the loss suffered by the Johns, given that Eaton Yale was not aware that Flynn was intoxicated on the night in question, did not provide him with alcohol on that night and did not condone his driving while intoxicated, combined with the fact that the accident was not associated with Eaton Yale in any way other than that one of its employees, who had finished his shift for the night, was involved in the crash.

The Court concluded that there was no duty of care on the employer to members of the public arising out the Employment Assistance Program, and if there was, it would not extend beyond the workplace after the employee had driven home safely.

Hunt (Litigation Guardian of) v. Sutton Group Incentive Realty Inc. , (2002) 215 D.L.R. (4th) 193, 60 O.R. (3d) 665 (ONCA); [2001] O.J. No. 374; 196 D.L.R. (4th) 738 (ONSC)

This appellate decision considered an employer’s liability in hosting an office party where the plaintiff was both an employee and a guest.  Alcohol was served through a self-serve open bar with no monitoring of consumption by the employer.  After the party, the plaintiff attended a local tavern and eventually tried to drive home, resulting in a head on collision.

The trial decision held that the employer should have foreseen that employees would stop for a drink on the way home.  The trial judge found that the employer’s duty was not discharged by offering a cab or a ride home, but that it should have insisted that the plaintiff leave her keys at the office, insisted on a cab, called her husband, called the police or put her in a hotel.  The trial judge did not consider the duty of care in a liquor liability context as the plaintiff’s claim was based solely upon the master and servant relationship.  At all material times, the plaintiff was engaged as an employee at the party and the trial judge specifically stated at paragraph 43 that “this is not a social host-type of case”.

In Hunt, the Court of Appeal found that the trial judge did not properly consider the causation issue and that the findings of the trial judge were insufficient for the Court to substitute their own opinion on the causation issue.  Ultimately, the Court sent the matter back down to trial as there was an error of law in discharging the jury necessitating a new trial.

Jenkins v. Muir, 2012 ABQB 352

This recent Alberta case involved an employee who was killed in a head-on collision after consuming alcohol at her place of employment after hours with a variety of individuals.  The evidence was unclear as to the exact timing and attendances of the various people, and the source of the alcohol that was consumed, though it appears liquor was brought to the office by individuals and not specifically supplied by the employer.  The deceased’s boss was noted to have left around 9:00pm, but the deceased and others continued to drink in the office until nearly 2:00am.

The Court, after reviewing both the Jacobsen and Childs decisions, found that it had not been established that the employer provided the alcohol, and that there was insufficient evidence regarding how much the deceased drank throughout the evening.  The evidence also established that there was no expectation for individuals to remain and continue to drink until two in the morning.  Finally, the Court recognized that the company had a generous taxi policy that allowed employees to charge the costs of taxi service to the company at any time.  As a result, the Court found that it was not proven on a balance of probabilities that the employer ought to have foreseen the deceased would become intoxicated and operate her vehicle.

Significantly, the Court rejected the argument that a duty of care had been established by virtue of the fact that the deceased was an employee.  At paragraph 68, Burrows J. held that:

Relationship cannot replace the foreseeability analysis.  It is not the law there where an employer’s careless act or failure to act results in injury to an employee the employer is liable even though it was not foreseeable that the act or failure to act would do so.

As foreseeability had not been established, the action was dismissed and no further discussion regarding the duty of care was undertaken by the Court.

Employer Host Liability – Commentary

The Jacobsen, supra. case provides an early extension of the commercial host concept into employment relationships. Interestingly, that court placed a higher standard of care on the employer simply by virtue of the relationship itself as compared to a tavern owner, at least when discussing the obligation to monitor consumption.  The proportion of liability placed upon the employer is high, but the facts of the case are extenuating.  The situation the plaintiff was placed in almost forced him to drive home, a fact that was not lost on the court.  The liability placed on the employer correlates to the pervasive opinion in the judgment that the employer was especially careless in the circumstances resulting in significant injury to the plaintiff.

Comparing John, supra. with Jacobsen, supra. it is easy to recognize a crucial difference in the facts leading to two divergent liability decisions.  In Jacobsen, the employer was not only aware of the consumption of alcohol, but actually provided the beer.  Conversely, in John, supra., the Court found that although the employer was aware of the problem, the employer neither provided the alcohol nor was aware of the consumption on that particular occasion.

While the argument before the Court in Hunt, supra. considered liability in a strictly employer-employee context, the decision remains helpful.  In that decision, the Court determined that the required steps accord with the reasonable steps expected of commercial hosts to ensure intoxicated persons do not drive.  As in the commercial host context, the question is then what is the required standard and how far must the employer go?  For example, would it be enough to book a room, or would the employer be required to ensure the plaintiff actually checked in and stayed in her room?  It may be easy enough to conclude that an employer could have done more, but where precautions are actually taken, at what point will they deemed to be enough to absolve the employer of liability will be determined on the specific facts of each case and require further direction from the Courts.

The decision in Childs, supra., decided after Jacobsen, John, and Hunt, has clarified the analysis required to determine whether a duty of care arises for liquor liability claims outside of the commercial host context.  In each case there must be an analysis of whether a duty of care arises with a view to the guidelines provided in that case.  Certainly an employer-employee relationship may be sufficient proximity or nexus for the first party of the test to be met.  For these cases, the issue will often be foreseeability.

For example, in the context of an office party, the relationship between the employer and employee may fall under the second category, although that is not perfectly clear based upon the examples given by the Court.  To consider the master-servant relationship as a paternalistic one may unreasonably expand the nature of the duty and the intention of the Court.  There may be no inherent vulnerability of an employee that would justify a restriction of an employee’s autonomy, though it could be argued that the employer creates the risk by an implicit expectation of participation.  This was especially true in Jacobsen, and Hunt.  However, analysis of the employer-employee relationship and the nature of an office party would suggest that such situations could fall under the auspices of a social host category, rather than one of the three categories listed above.  The prior jurisprudence, while considering the nature of the relationship of employer-employee, did not have the benefit of the Supreme Court’s direction and analysis in Childs and no thorough examination of the duty of care has been undertaken in this context.

It is reasonable to suggest that cases involving an office party should apply the same litmus test used by Justice McLachlin.  Arguably the nature of an office party should be considered a social host situation, as the host does not have a commercial interest in purveying alcohol and therefore no inherent responsibility to the public.  In succinct fashion, the Court in Childs at paragraph 45 holds that:

A person who accepts an invitation to attend a private party does not park his autonomy at the door.  The guest remains responsible for his or her conduct.  Short of active implication in the creation or enhancement of the risk, a host is entitled to respect the autonomy of a guest…absent the special considerations that may apply in the commercial context, when such a choice is made by an adult, there is no reason why others should be made to bear its costs.

Without such responsibility, there is no justification to impede upon the autonomy of the individual “without more”.  This analysis suggests that where there is specific knowledge, of impairment and an intention to drive for example, a duty may arise but it does not close off the possibility that the something more may be the employer-employee relationship.  This Court at paragraph 47 states that “a social host at a party where alcohol is served is not under a duty of care to members of the public who may be injured by a guest’s action, unless the host’s conduct implicates him or her in the creation of exacerbation of the risk”.  The question would be whether an employer hosting an office party with expectations of participation, or implicit pressure on the employee due to a power imbalance would equate to the creation or exacerbation of the risk.

The most recent decision is of course Jenkins, supra.  This decision signals a positive step in the evolution of liquor liability decisions.  While Jenkins does appropriately consider the foreseeability aspect of the analysis, it unfortunately does not consider the relationship itself in detail.  As stated in Childs at paragraph 34, “a positive duty of care may exist if foreseeability of harm is present and if other aspects of the relationship between the plaintiff and the defendant establish a special link or proximity”.  The proximity analysis was not undertaken by the Court, as the foreseeability aspect disposed of the claim.

Conclusion

The indicia present in the commercial host context, the inherent responsibility to the public, are not always present where a company hosts an office party.  It may be argued that provision of an open bar at a party creates an inherent and obvious risk but the SCC in Childs held that hosting a party where alcohol is served is not high risk activity and in fact a common occurrence [Childs, para. 42].  What remains to be considered is how the employer-employee relationship will be treated by the Courts both in situations where the consumption of alcohol is and is not a part of the duties of employment in the traditional sense.

It may be argued that employer social activities should be considered just that, social and the analysis in Childs should operate to confirm individual autonomy and absolve employers of liability due to the absence of a duty of care other than in extenuating circumstances, perhaps in cases like Jacobsen.

While the value of pre-Childs decisions may be questionable, these early decisions are useful guides in assessing risks.  Where an employer provides alcohol during a work day and creates a situation where employees may be forced to drive home, there may be a greater risk of liability than a completely optional dinner party.  Unfortunately, there are many gradients to the situation which will require further analysis, and direction, from the Courts.