In the scenario it only says that Larry had "a bit too much to drink" which could have been just enough to impair his reflexes and not enough to be visible to the person serving the drinks. If there were witnesses to Larry being visibly intoxicated prior to being served more drinks, then it may apply.
I think one thing to company could have done is have a cash bar. People seem to drink more when it’s free! In addition to limiting the amount of drinks served, limit the amount of time the bar is open, and no last calls. Last calls, can cause some people to order a few drinks at a time and drink