jump to navigation

Third party liability October 28, 2007

Posted by Sharath Rao in ideas, policy.

The question of – “Should Hosts Be Liable for Serving Liquor to Guests Who Cause Accidents While Driving under the Influence? –And Other Issues of Third-Party Liability.”

Listen to Gary Becker.

I am dubious about this approach because of the difficulty of effectively enforcing such third-party liability. Only a small fraction of patrons of most bars both drink heavily and then drive afterwards. Waiters and other bar employees would have to keep track not only of how many drinks patrons have had, but also of how drunk they are, and whether they would be driving afterwards. I do not see how many bars could ever hope to have accurate information about all three stages involved in producing drunk drivers, especially whether patrons would be driving afterwards, particularly when they do not know their patrons well.

To be sure, if they were liable, bars might have rules that no patron may have more than I or 2 drinks, which would be the limit in most states before most drinkers would fail the usual sobriety tests. The problem with such a rule is that it does not focus on the behavior of patrons who are potential drunk drivers. It punishes patrons who want to drink more than that and have no intention of driving while under the influence. Moreover, such a rule is ineffective against patrons who go from bar to bar and only have one or two drinks at each one. It is also ineffective against patrons who drink at home first and then add a few drinks at a bar or restaurant. The same considerations apply if bars get insurance to cover these liabilities, and then raise the cost of drinking to everyone to cover the additional costs.

It could be claimed that while holding bars liable would not work perfectly, such third-party liability would cut down on the number of drunk drivers. It probably would, but would the effect be large, and how much costly and inefficient litigation would be stimulated against bars and others held liable who are not in any important way responsible for the drunk driving of persons who been at their establishments? Why not also hold friends liable who did not stop a drunk driver from drinking so much, or did not force him to take a taxi home? The ultimate question is whether the general and specific harms from imposing liability on bars to innocent patrons, friends, and others exceed the gain from cutting down drunk driving? I believe it does, especially because better approaches are available.

Actually, this extravagantly broad interpretation of “third party liability” in Europe/North America which condones suing the neighborhood fast food restaurant for becoming obese, is hard to understand.

Can the fast food restaurant then legitimately seek monetary rewards from its thin/lanky customers for having keep them that way ? We will then have a situation where restaurants will want to locate to areas with lot of healthy people and the healthy one running away from these places to avoid paying them. And of course, the unhealthy/obese folks running after restaurants so they can get legal settlements. 🙂



No comments yet — be the first.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: