What Is the Dram Shop Law in Michigan?

When an intoxicated person causes an accident, it is natural to assume they are the only one liable for the resulting harm. In Michigan, however, the law recognizes that another party may share responsibility: the establishment that sold them the alcohol. The dram shop law in Michigan holds businesses accountable for irresponsibly serving alcohol to individuals who then cause injury to others.

Understanding dram shop laws can be vital for accident victims seeking full compensation for their losses. The personal injury lawyers in our law firm explain how Michigan’s Dram Shop Act works, the specific requirements for filing a claim, and the strict deadlines that apply.

What Does “Dram Shop” Mean?

“Dram shop” comes from 18th-century England, where alcohol was sold by the dram—one-eighth of a fluid ounce. It now refers to places like bars and pubs that serve alcohol.

Understanding Michigan’s Dram Shop Law

Michigan’s Dram Shop Act, found in the Michigan Liquor Control Code (MCL § 436.1801), allows a person injured by a visibly intoxicated person to file a lawsuit against the licensed establishment that provided the alcohol. The purpose of this law is to protect the public by encouraging bars, restaurants, and liquor stores to serve alcohol responsibly and to provide a path to justice for those harmed by a vendor’s negligence.

Dram shop claims succeed in Michigan when two key conditions are met:

1. Unlawful service: The injured party must prove that the vendor unlawfully sold, gave, or furnished alcohol to a person who was “visibly intoxicated” or to a minor (someone under 21 years of age).
2. Causation: The service of alcohol must be a proximate cause of the third party’s injury or death. This means there must be a direct link between the over-service and the subsequent accident (like a drunk driving accident).

Proving that a person was “visibly intoxicated” is a critical part of these dram shop liability cases. It requires evidence that the individual showed clear signs of drunkenness—such as slurred speech, stumbling, or belligerent behavior—when they were served.

The “Name and Retain” Provision

A unique feature of Michigan’s Dram Shop Act is the “name and retain” provision. This rule requires the injured person to name the intoxicated individual as a defendant in the lawsuit and to retain them in the dram shop case until the litigation is concluded. This means you cannot settle with the drunk driver or at-fault person and then continue to pursue a claim against the bar alone.

The purpose of this provision is to prevent collusion between the injured party and the intoxicated person. By keeping the at-fault individual in the lawsuit, the law ensures that all responsible parties—those who overuse or sell alcohol—are held accountable. There are limited exceptions to this rule, such as if the intoxicated person’s identity cannot be determined after diligent inquiry.

What Is a Social Host Liability Claim?

While dram shop laws apply to retail licensees and businesses, Michigan also has laws regarding “social host” liability when the at-fault party hosted a private function. This applies to individuals who host private parties serving alcohol to minors and adults. A social host can be held liable if they knowingly provide alcohol or an open bar to minors who are under the legal drinking age of 21, and that minor then causes an injury to a third party.

However, unlike licensed vendors, social hosts are generally not liable for damages caused by an intoxicated adult guest. This is a significant distinction, as the legal responsibility is placed primarily on commercial establishments that profit from the sale of alcohol.

Strict Time Limits for Filing a Claim

Michigan law imposes strict time limits for dram shop and social host liability cases that differ from other personal injury claims.

Under Michigan statute MCL § 436.1801(4), you must provide written notice to the licensed establishment of your intent to file a claim within 120 days of retaining an attorney. This notice allows the business to preserve evidence, such as video surveillance footage and sales records.

Furthermore, the statute of limitations for filing a dram shop lawsuit is two years from the date of the injury. If you fail to file a lawsuit within this two-year period, you will lose your right to pursue compensation from the establishment, including medical expenses, lost wages, property damage, and more.

Seeking Justice After an Accident

Dram shop liability laws are complex and require diligent inquiry to gather the necessary evidence to prove a vendor’s liability. Proving visible intoxication at the time of service often relies on eyewitness testimony, expert analysis, and video evidence. An experienced personal injury attorney from our law firm can help navigate the specific requirements of the Dram Shop Act, ensure all deadlines are met, and build a strong case—ensuring the at-fault party is held responsible for injuries caused.

If you or a loved one has been injured when bars sold alcohol to intoxicated patrons, remember that the law may provide more than one source of recovery. By holding a business liable for an intoxicated driver or intoxicated minor (the person’s age was under 21) whose alcohol consumption caused an accident, you can secure the compensation you need to recover.