Canada: Legalizing Marijuana: Potential Impact On Social Hosts

All hosts know there are several elements that need to be properly planned when hosting a social function: the company, the food, the music and, of course, the refreshments. With the anticipated legalization of recreational marijuana in Canada, however, could a social host face exposure if marijuana is provided and something unexpected happens?

Canadian jurisprudence has consistently held that special relationships exist whereby commercial organizations and establishments that serve alcohol or other impairing products owe their patrons a duty to ensure that no foreseeable harm occurs while on or after leaving the premises. These duties include the following:

  • to ensure the establishment does not over-serve patrons to the point of intoxication;
  • to ensure sufficient protections are taken to ensure the patron does not suffer damage while on or after leaving the property; and
  • to ensure that the intoxicated patron does not inflict damage on another person — including damages caused from driving.

This same duty, however, does not attach to social hosts without the existence of some form of a special relationship. Situations where a special relationship could be found to exist include, but are not limited to the following:

  • hosting where adults are supervising minors who become impaired;
  • where the host encourages or knowingly approves of the potentially negligent actions by an impaired guest; and
  • where the host provided guests with unsupervised access to impairing substances or products and then failed to monitor their actions.

With the legalization of recreational marijuana set to occur in Canada during the summer of 2018 and access to the drug likely increasing, it is only a matter of time before the courts will have to determine whether or not a social host can be held liable for foreseeable harm occurring as a result of their guest's marijuana consumption. While the determination of liability is always fact-specific, it is anticipated that the courts will likely look to cases pertaining to social hosting and alcohol consumption to assist with their analysis.

A Social Host's Potential Liability

In the 2006 seminal case of Childs v. Desormeaux, the Supreme Court of Canada examined whether or not a social host owed a duty of care to a person who sustained an injury as a result of the actions of an attendee at a social function. In this case, an attendee at a house party drove following consumption of a high volume of alcohol and got into an accident that left the plaintiff paralyzed. An action was commenced as against the driver of the vehicle who caused the accident and the hosts of the party. Worth noting is that the injured party was not in attendance at the social function.

The evidence was consistent that the hosts did not provide alcohol to the attendees and did not monitor consumption by the attendees. While the hosts knew that the driver had been drinking, they did not know how much he consumed and were found to have used reasonable efforts to ensure that he was able to drive before he left the party. This primarily consisted of speaking with the driver before he got into his vehicle to satisfy the hosts that the driver was not intoxicated and was able to safely drive from the party.

The court held that, as a general rule, a social host does not owe a duty of care to a person injured by a guest at a house party who has consumed alcohol as there was not a sufficient proximity in the relationship to give rise to a duty of care.

Despite the finding, cases since have held that a duty of care could exist. More specifically, a social host may be vulnerable to a liability claim when the foreseeability of harm is present and other aspects of the relationship between the injured person and the host create a special link or proximity. The cases where duties could exist routinely involve paternalistic relationships of supervision and control or situations, where hosts have taken certain actions that directly impact the guests at their function.

In these instances, the courts — including the 2008 ruling by Ontario's Superior Court of Justice in Hamilton v. Kember and the recent decision by the same court in Wardak v. Froom — have routinely taken the position that a trial on the merits is required to determine whether or not the social host encouraged or contributed to the intoxication of his or her guest prior to the incident in question and that liability could arise if such facts were to be found at trial.

Remedies Available t Hosts

Given the general nature of the high court's analysis in Childs, it is reasonable to expect the rule in Hamilton and Wardak would apply to the consumption of marijuana going forward as well. While many of the cases in Ontario that examine a social host's actions involve a motor vehicle accident after a guest has consumed alcohol, it is quite apparent that similar circumstances can — and will — likely arise relating to the consumption of marijuana at a social gathering. We can anticipate this risk to become more prevalent as access increases and Police training and detection methods increase to the point where intoxication by marijuana is easily identified.

While criminal prosecution for a host is unlikely, civil liability is certainly possible. While social hosts may be covered by their home insurance policy, a closer inspection of the specific policy wording should be reviewed to ensure that there are no exceptions or restrictions that could result in a lack of insurance coverage. It may also be wise to ensure that the third-party liability coverage under the home insurance is sufficient to meet potential liabilities.

While a social host will generally not be found solely liable for an incident that arose out of a guest's consumption of marijuana at his or her event, should the court deem that the host knew or ought to have known of the guest's impairment and/or encouraged it, a social host may be found partially liable for the actions of guests and the ensuing consequences. The specific factual matrix will, ultimately, be determinative of whether or not a special link between the parties existed at that time.

Conclusion

There can be little doubt that the legalization of recreational marijuana will result in increased access and consumption by many in the general public. With this, it is reasonable to anticipate an increase in the presence of marijuana at social events in much the same manner that a case of beer, bottles of wine or bottles of spirits are provided to guests. Assuming this occurs, it can be expected this will result in an increase in the number of incidents and accidents relating to the consumption of marijuana and a corresponding increase in the allegations that a host's actions caused or contributed to the incident or accident.

Ultimately, what is important to realize is that a social host may face liability. This will, no doubt, have consequences for insurers who may now need to defend more possible claims alleging a breach of a social host's duty of care. Insurers should be aware of this potential liability exposure and manage risk accordingly. This may materialize in the form of additional questions regarding the general hosting habits of applicants for insurance before an insurer agrees to underwrite this risk, potentially higher rates for homeowners or additional exclusions being written into the homeowner's policy.

How insurers decide to manage this additional risk could, ultimately, be a determinative factor when consumers are considering different insurance providers and products for their home insurance needs.

Insurance brokers should also be sure that they understand the coverages potentially available to their clients when recommending certain insurance policies. Failure to properly warn clients of the limitations in the coverage purchased, and to identify the different coverages available, could result in a finding that the insurance broker was negligent in arranging insurance for its client and, ultimately, responsible for the loss suffered.

First published in Canadian Underwriter, June 2017 Edition

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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