Towards Personal Responsibility

The insurance industry may at times take a dim view of the judiciary and the actual or perceived failure of judges to support the notion of personal responsibility. To insurers, the tort system often appears a frustrating machine that intends to ensure not that fault is apportioned to those actually responsible for causing loss, but rather to those with available insurance coverage. But in rejecting the plaintiffs’ appeal in Childs v. Desormeaux, and in speaking the following words, the Supreme Court of Canada has actually increased rather than decreased the focus on personal responsibility:

“A person hosts a party. Guests drink alcohol. An inebriated guest drives away and causes an accident in which another person is injured. Is the host liable to the person injured? I conclude that as a general rule, a social host does not owe a duty of care to a person injured by a guest who has consumed alcohol and that the courts below correctly dismissed the appellants’ action.”

Few remain unfamiliar with the Childs case, which represents the first time the Supreme Court has had the opportunity to address the issue of social host liability. For additional background on this issue, please refer to Craig Harris’ excellent article, “Social Host Hangover” in Canadian Underwriter’s April 2006 issue.

FACTS IN CHILDS

The tragic facts of the case are, by now, well known. Desmond Desormeaux and his girlfriend attended a New Year’s Eve party thrown by Julie Zimmerman and Dwight Courrier. They brought with them 24 beers, a bottle of Amaretto and a bottle of wine. After drinking to excess (his blood alcohol concentration was .183, more than double the legal limit), Desormeaux proceeded to drive home, eventually causing a head-on collision with a vehicle in which Zoe Childs was a passenger. One occupant of the car was killed, two others were injured and Ms. Childs was rendered a paraplegic. Desormeaux had no insurance and no money, and so Zoe Childs pursued the social hosts Zimmerman and Courrier for compensation, alleging that they owed her a duty to keep Desormeaux off the road.

Childs’ case failed before both the Ontario Superior Court and the Ontario Court of Appeal. The trial judge found that Zimmerman and Courrier owed a prima facie duty to the public to prevent Desormeaux from driving while intoxicated, but the judge went on to find that public policy militated against the imposition of a duty of care. Childs appealed and found an even less favorable audience at the Ontario Court of Appeal, which rejected even the notion that a prima facie duty existed. Unlike commercial hosts, the court found that Zimmerman and Courrier were under no statutory duty to monitor the alcohol consumption of their guests. Childs appealed to the Supreme Court of Canada; in a unanimous decision released May 5, 2006, the Supreme Court rejected Childs’ arguments and upheld the dismissal of the action against Zimmerman and Courrier.

MONITORING CONSUMPTION

The Supreme Court of Canada’s decision opens with a discussion of the “neighborhood” concept used to establish the existence of a duty of care. As it has in the past, Canada’s high court relied upon the British House of Lords’ decision in Anns v. Merton London Borough Council, which proposed a two-part test to determine when a duty of care ought to be found. The first stage of the test asks whether the relationship between the plaintiff and the defendant is proximate enough to warrant the imposition of a duty (“Can the relationship give rise to a duty?”). The second stage of the test asks whether there are any policy considerations that ought to negate or limit the scope of the duty or the class of persons to whom it is owed (“Should the relationship give rise to a duty?”).

The Supreme Court of Canada didn’t need to address the second part of the Anns test, because it was satisfied no prima facie duty of care arose. In reaching its conclusion, the court first determined whether the duty sought to be imposed was novel. The court confirmed that it was. While the notion of a duty of care owed to third parties had already been extended to commercial hosts, it had not yet been extended to social hosts. The court reinforced the rationale for the duty in the commercial context, but noted that commercial establishments are different from social hosts for three key reasons:

* It is generally expected that commercial hosts will monitor alcohol consumption. They are in a unique position to do so, are paid for service and are specially trained in the performance of that duty.

* Commercial service of liquor is strictly regulated; the rules suggest commercial establishments operate in a different context than social hosts.

* The relationship between a tavern and its customers is contractual; as such, it is fundamentally different than that which exists between a guest and a social host.

The heart of the Anns’ test is the notion of proximity. The court found proximity had not been established based on the facts of the case, because Zimmerman and Courrier did not actually know that Desormeaux was intoxicated. The court was not prepared to infer that they ought to have known that Desormeaux was drunk based solely on his past instances of excess consumption. The court emphasized a clear difference between cases of non-feasance (the failure to act in circumstances that call for it) and active misfeasance. In the process, the court noted: “As a general principle, the common law is a jealous guardian of individual autonomy.”

HOSTS CAN’T BE IRRESPONSIBLE

The court was not willing to impose the same type of positive duty that exists when a person has created the risk of harm or exacerbated it – i.e. when a relationship is paternalistic in nature (such as in parent-child or student-teacher relationships) or when a public function or commercial enterprise dictates that positive steps must be taken. In each historical case in which a positive duty to act has been imposed, others have placed a reasonable reliance on the fact that the person best able to prevent the harm will take steps to do so. The court re-iterated that “a person who accepts an invitation to attend a private party does not park his autonomy at the door.”

From the plaintiffs’ perspective, the facts in Childs were far from ideal: the party was B.Y.O.B., which intuitively limits the ability of the host to monitor guests’ consumption. That being said, the court left open the notion of a duty in circumstances in which the hosts serve the alcohol. However, this situation, absent extenuating circumstances, may not give rise to liability unless the host exacerbates the risk by promoting consumption. Finally, the court infers that had the hosts been aware that Desormeaux was drunk and preparing to drive home, a positive duty to stop him from doing so might have arisen.

The Supreme Court’s decision has garnered substantial press coverage, much of which overstates the breadth of its application. Media headlines such as “Social Hosts Cannot Be Sued If Their Drunken Guests Cause Damage or Death,” and “Party Hosts Are Not Legally Liable For The Actions Of Their Drunken Guests Once They Leave The Premises” imply the court slammed the door shut on these types of cases. But, people who read the decision in detail recognize this is not the case.

The reality remains that the decision is favorable from an industry perspective. “I think, from a practical point of view, the Childs decision will make pursuing the social host through protracted and costly litigation a poor business decision for the law firm financing the case in all but the most extraordinary of circumstances,” Ontario personal injury lawyer Dale Orlando of McLeish Orlando concludes. “If the SCC hasn’t slammed the door shut on social host liability, it has come pretty close. A crack in the door may have been left open in circumstances where there is an extra onus on the social host to monitor the conduct of thei r guests – a situation in which minors are present at a party, for example, or in which the host encourages the consumption of large sums of alcohol through drinking games or things of that nature. The Court has clearly decided that any evolution of the law in favor of extending a duty of care to a social host will be a slow, painstaking journey.”

INSURERS RELIEVED

The decision comes as relief for insurers, given the problems posed by rating this type of risk. According to Greg Somerville, Aviva Canada’s executive vice-president of claims and reinsurance: “The situation that befell Zoe Childs and the other innocent victims of this accident was a tragedy. One must bear in mind, however, that it would be a rare circumstance for the full accident benefit regime to be unavailable to those injured in accidents caused by drunk drivers; as such, the situation is not one where the loss will go unpaid if the case against the social host fails. Zoe Childs’ claim, if successful, had the potential to add costs to the system across the board. Given the difficulty of underwriting this type of risk, no doubt any increase in homeowners’ premiums would have been spread across all policyholders, resulting in increased premiums across the board or possibly even the decision to exclude the risk altogether.”

Randy Bundus of the IBC looks at the bigger picture and sees the potential application of the decision to the development of tort law in general. “The IBC is pleased to see the industry’s arguments were accepted,” he notes. “This seems to send a clear message that expansion of the categories where a duty will be recognized in tort is not automatic. The court was not prepared to expand the recognition of a duty to social hosts simply because it has in the past recognized that duty in the commercial context. That being said, the Childs decision is by no means an open invitation for hosts to be irresponsible hosts. The risk of liability remains a reality for those who act irresponsibly, whether they be guests or hosts.”

Whether Childs v. Desormeaux is a blip on the radar screen or the start of trend towards the return of personal responsibility remains to be seen. However, from an industry perspective, it remains a solid step in the right direction.