Canada: Parties, Cocktails & Cannabis – The Triple Threat For Host Liability

Last Updated: December 3 2018
Article by John Alexander “Sandy” Jenkins

This is the first holiday season in the post-legalization of cannabis era. If, as an employer, you are planning a holiday gathering, you should be aware that you may be exposing your company to significant financial liability for the actions of an impaired guest. The concept of host liability is not new, but with the introduction of cannabis legislation, a refresher on this topic is critical.

The issue of host liability is categorized in three ways: Commercial, Social, and Employer. The following principles and best practices are important to keep in mind, especially during this time of year.

Commercial Host Liability

The concept of commercial host liability was set out by the Supreme Court of Canada in Jordan House Ltd v Menow, [1974] SCR 239. In that case, a customer had been kicked out of the bar because of his level of intoxication. The customer attempted to walk home when he was struck by a vehicle. The customer alleged that the bar was negligent in serving him alcohol to the point of intoxication and then ejecting him from the bar when the staff knew, or ought to have known, that he was unable to take care of himself. The Court held that the bar was negligent in failing to see that the customer got home safely or was under the care of a responsible person.

The Menow decision established that bars, restaurants, and other commercial establishments that serve alcohol have a duty to protect their customers and the public. They cannot serve customers alcohol to the point of intoxication and then simply turn them loose.

Social Host Liability

Thirty years later, in the case of Childs v Desormeaux, 2006 SCC 18, the Supreme Court of Canada tackled the issue of whether individuals who host a party can also be held liable for the actions of their intoxicated guests. In that case, the defendants had hosted a New Year's Eve party at their home. The guests of the party provided their own alcohol. One of their guests, who was known to have engaged in impaired driving on multiple occasions in the past, drove home from the party in an intoxicated state. While on his way home, he collided head-on with another vehicle, killing one of the passengers and seriously injuring three others. The party hosts were not held liable for the car accident. The Court explained that a social host may be held liable if their conduct contributed to the risk:

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 actions, unless the host's conduct implicates him or her in the creation or exacerbation of the risk. [Emphasis added]

The Childs decision opened the door for the imposition of liability on a social host where the host serves alcohol to a guest to the point of intoxication and fails to prevent the guest from driving home while intoxicated. Even on these facts, the Court cautioned that policy considerations may still mitigate against a finding of liability.

Employer Host Liability

Employer host liability first arose in Jacobsen v Nike Canada Ltd, 1996 Can LII 3429 (BC SC). The employer had provided employees with a substantial amount of beer during working hours. The employer was aware that all employees had driven to work and were not within walking distance of their homes. After one employee finished work, he and his co-workers went to two bars and consumed more alcohol. While driving home from the final bar, the employee drove off the highway and suffered serious injuries that rendered him a quadriplegic. The employee sued his employer, alleging that the employer was negligent by providing alcohol to him during working hours and failing to take any steps to prevent him from driving while intoxicated. The Court held that the employer was 75% liable for the accident as the employer failed to provide a safe workplace by introducing alcohol at work.

In John v Flynn, 2001 Can LII 2985 (ON CA), the Ontario Court of Appeal provided some guidance on how an employer may avoid employer host liability. The employee in question had a drinking problem. For eight hours prior to his shift, and during his shift, the employee drank steadily. Despite his intoxication, the employee managed to leave work and arrive home safely, where he continued to drink. He later drove to a friend's home and, on his way, was involved in a motor vehicle accident. The Court of Appeal held that the employer was not liable because:

  • the employer did not provide any alcohol to the employee;
  • the employer was not aware that the employee was drinking on the job;
  • the employee did not demonstrate any signs of intoxication; and
  • the employer did not condone drinking and driving.

The Alberta Court of Queen's bench came to a similar decision in Jenkins v Muir, 2012 ABQB 352. In this case, the employer did not provide alcohol, was not aware of the employee's intoxication when leaving the premises, and the employer's policies included using taxis at the employer's expense.

Impacts of Cannabis on Host Liability

The courts are yet to test commercial host, social host, and employer host liability with respect to cannabis. However, the matter appears to be relatively straightforward for commercial entities and employers. Under the federal government's Cannabis Act, it is a "criminal activity" for an organization to possess cannabis, unless otherwise authorized under that act (see Section 8(1) of the Cannabis Act). "Organization" under this act includes almost any type of business, as well as trade unions. Fines for violating the Cannabis Act can be as high as $100,000. So, commercial entities and employers serving cannabis appears to be off the table.

With respect to social hosts, the matter is different. Individuals are permitted to possess and cultivate cannabis in their homes. While it is an offence to sell cannabis, it is generally not an offence to give cannabis to an adult. As such, social hosts may provide cannabis to their guests. However, this comes with certain caveats and caution should be exercised when considering gifting cannabis.

Despite being legal, cannabis is subject to certain restrictions that alcohol is not. First, there is a limit on how much an individual may possess. While the possession limit is relatively high, you wouldn't want to place one of your guests at risk by assuming they don't have cannabis on them, and subsequently putting them over the possession limit of 30 grams by gifting them some of your "home grown". Second, it is an offence under the Cannabis Act to distribute (which includes giving) more than 30 grams of dried cannabis. So, while you can gift as much alcohol as you want, there is a limit to how much cannabis you can give out. If you're hosting a large party and giving out drink tickets, you may not be able to give out "weed tickets". Lastly, for the same reasons as alcohol, providing cannabis to your guests would likely result in the creation or exacerbation of a risk—a trigger for liability noted by the Supreme Court of Canada in Childs. The alcohol content in home brew can be easily determined, thereby allowing a host to somewhat monitor alcohol intake. Determining THC content in home grown cannabis is less straightforward.

The impairing effects of cannabis, and their duration, are still a subject of debate. This uncertainty was discussed in the recent labour arbitration decision, International Brotherhood Lower Churchill Transmission Construction Employers' Assn. Inc. and IBEW, Local 1620 (Tizzard), Re (2018), 136 CLAS 26. In this case, the arbitrator reviewed several medical authorities and found that it was possible for impairment to last for over 24 hours, the employee could sincerely believe he was not impaired and yet still be long after consumption, and there were essentially no reliable options available to effectively determine impairment. Due to these uncertainties, the arbitrator ruled that an employer did not have to accommodate an employee who was taking prescribed medicinal cannabis.

Despite the difficulty in detecting impairment due to cannabis, either visually or by screening tests, it is generally accepted that, when cannabis and alcohol are consumed together, it takes less amounts of each to become impaired. This is reflected in the Criminal Code, where thresholds for impaired driving offences are essentially cut in half when an individual has consumed both alcohol and cannabis (the threshold for alcohol and cannabis is 50 mg per 100 mL of blood and 2.5 ng per 100 mL of blood, respectively; compare this to thresholds of 80 mg of alcohol per 100mL of blood for alcohol alone and 5 ng of THC per 100 mL of blood for cannabis alone). So, if you are planning to consume both alcohol and cannabis together, limiting the consumption of each is sage advice.

Lessons for Employers

The office holiday party is a great way to boost morale by rewarding staff and giving them a chance to get familiar with their colleagues on a social level. However, employers must remain mindful of their potential liability.

Employer host liability will generally be imposed where the following conditions are met:

  • the employer provides alcohol (or other impairing substances) to the employee;
  • the employer has knowledge of the employee's intoxication; and
  • the employer fails to take sufficient steps to prevent the employee from driving.

Recommended Steps

Employers can minimize the risks of employer host liability by implementing the following best practices when hosting a company party:

  • hire professional bartenders to serve alcohol – they are trained to identify intoxicated patrons and how to handle them;
  • provide non-alcoholic beverage options;
  • avoid an open bar and, instead, provide guests with a limited number of drink tickets;
  • if acting as a private individual, exercise caution if giving out cannabis, particularly when alcohol is available, and vice versa;
  • if acting as an employer/organization, do not give out cannabis;
  • ensure food is served at all times when alcohol is available;
  • provide taxi vouchers to guests who require them;
  • implement a specific cut-off point where the work function officially ends;
  • promote responsible substance use and inform employees of the effects of combining cannabis and alcohol; and,
  • if you hold a management-level or supervisory position, lead by example.

If you think an employee may attempt to drive a vehicle while impaired, consider taking the following steps:

  • provide alternative means of transportation;
  • take away the employee's car keys;
  • provide accommodations for the employee; and/or
  • if the employee refuses your assistance and attempts to drive home, call the local police.

Have a safe and happy Holiday!

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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John Alexander “Sandy” Jenkins
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