It was a night of celebration and laughter for Reese Witherspoon at ELLE's 20th Annual Women In Hollywood Awards on Monday.

The Oscar-winning actress was presented with an award by her good friend Chelsea Handler, but ever the inappropriate joker, Chelsea brought up that unfortunate drunken traffic incident Reese was involved in earlier this year.

However, rather than hide her head in shame, Witherspoon, 37, found herself overcome by laughter as Handler, 38, turned the embarrassing incident into just another funny yarn.

From the stage at the Four Seasons hotel in Beverly Hills, Chelsea began: ‘Personally, as a true friend, my favourite project of hers was an overlooked short film that she made earlier this year.

‘She plays a very inebriated housewife defending her inebriated husband.’

According to E! News, Reese burst into giggles with her husband Jim Toth laughing along right there next to her.

The night Handler refers to was in April when the actress was arrested in Atlanta for disorderly conduct after pulled their car over when they became suspicious that Toth – a Hollywood agent - was driving while over the legal alcohol limit.

Refusing to wait in the car, Reese confronted the police officer, unwittingly become the star of a YouTube hit after the incident was recorded.

Continuing her roasting of Witherspoon, Chelsea then crudely referred to one of the American actress’s most famous turns, as Elle Woods in Legally Blonde.

‘I've seen her naked and I can tell you, she was miscast,’ Handler said ‘A more appropriate title would have been Legally Bald.’

However maybe the late night TV host went over the line, as Witherspoon retorted, ‘I don't know if I should thank you for that. Jesus!’

But clearly there were no hard feelings, as Reese told E! at the event: ‘Any party gets that much better when Chelsea Handler shows up.’