Serving alcohol is a serious responsibility that is governed and controlled by laws at the national, state and local levels. One of the most important and overlooked aspects of this responsibility is third party liability. Third party liability means you can be held responsible for the actions of those you serve alcohol to. It is important to know the law and where your responsibility starts and ends.
New Mexico is just one of the many states that allows such limited third party liability claims by an injured person after an alcohol-related accident. These laws are called “Dram shop” laws, and can be used to hold an alcohol vendor liable for selling or serving alcohol to a person who causes injuries to someone else.
Section 41-11-1 of the New Mexico Statutes Annotated contains the state’s third party liability law. The statute allows an injured person to hold a licensed alcohol vendor liable if:
the vendor sold or served alcohol to an intoxicated person, and
the person’s intoxication was “reasonably apparent” to the vendor, or
the vendor knew that the person buying or receiving the alcohol was intoxicated.
The Act also states that if the injured plaintiff is the one that was served the alcohol, rather than an injured third-party, then that plaintiff can only recover if the licensee acted with gross negligence and reckless disregard for the safety of the person who purchased or was served the alcoholic beverages.
An intoxicated person cannot collect damages from a vendor who serves alcohol to that person, unless the service was “grossly negligent” or “reckless.” However, a person injured by an intoxicated person may be able to seek damages from the vendor if the above conditions are met.
Like other injury claims in New Mexico, a third party liability claim must be filed in court within three years, or the court is almost certain to dismiss it.
Liability in alcohol-related accident claims is expressed solely in terms of money damages. Common types of damages compensated for in successful third party liability claims include damages for medical bills, property damage, lost wages, and pain and suffering.
It’s important to note here that New Mexico limits the amount of damages available in a dram shop or social host liability claim. The damage caps in these cases are $50,000 per person or $100,000 per accident for bodily injuries, and $20,000 per accident for property damage.
So it is important to stay vigilant: check for ID, don’t over serve, pay attention to your guests and most of all… never let anyone drive drunk. If you serve alcohol, you will always be open to third party liability claims, but if you follow the laws and keep your staff trained, it could be what prevents a costly or even worse, deadly mistake.
For more info on alcohol serving check out our resources here!