Committee hears bill to shift civil defense costs from servers to retailers

Summary

At a Feb. 10 Business Committee hearing, staff and the bill sponsor outlined House Bill 1977, which would require retailers to pay defense costs and any civil judgments entered against servers accused of overserving. Hospitality industry witnesses said insurance market problems, not this single bill, are driving coverage gaps and higher premiums.

The House Business Committee held a public hearing Feb. 10 on House Bill 1977, which would require a retailer to pay necessary legal defense expenses and any monetary judgment entered against a current or former server sued for allegedly selling liquor to a person apparently under the influence.

Peter Klotfelter, staff to the committee, told members the bill would not replace administrative penalties under Washington liquor law. "For the licensed business, the first violation would be a five-day license suspension or a $500 penalty," Klotfelter said, and penalties escalate on repeated violations (a seven-day suspension for a second violation within two years, a 30-day suspension for a third, and potential license cancellation for a fourth). He said HB 1977 would shift civil-defense responsibility to the retailer in suits brought against servers and would allow a judgment creditor to seek satisfaction only from the retailer, not from the server or the server's property. The bill also, in staff's description, does not limit a server's personal liability for administrative fines.