Third-party practice after the AVOID Act: What defense counsel and claims professionals must know now

Listen to this article

New York’s “Avoiding Vexatious Overuse of Impleading to Delay” (AVOID) Act represents the most significant change to third-party practice in decades. The Act amends New York’s civil practice laws and rules (CPLR) to impose a strict deadline on third-party actions and to bar impleader once a note of issue is filed. This action will have significant impacts on civil legal defense strategies.

The Chapter Amendments clarified that the Act applies only to actions commenced on or after the effective date, which is April 18, 2026, a critical distinction for matters already in suit. The flexible, discretionary basis that once allowed defendants to wait through depositions and document discovery before identifying third-party targets no longer exists.

A missed impleader deadline does not just close a procedural door, but it can also eliminate indemnification recovery, extinguish contribution rights, and fundamentally alter the economics of a claim.

Before the AVOID Act, CPLR 1007 imposed no express deadline for third-party practice. A defendant could proceed against any person “not a party who is or may be liable” for all or part of the plaintiff’s claim, and courts evaluated timeliness under discretionary prejudice and undue delay standards. In construction and Labor Law litigation, owners and general contractors routinely waited until depositions revealed which third-party defendant is responsible before filing a third-party complaint.

That approach had real strategic value; however, New York has moved from a no-deadline impleader system to a “use it or lose it” system. For construction and Labor Law defendants where multi-party structures are the norm and risk transfer is the cornerstone of defense strategy, the AVOID Act changes the dynamic of these cases.

90-day deadline

The AVOID Act establishes a new threshold: defendants cannot file a third-party summons and complaints more than 90 days after serving its answer without a court order. All third-party claims, contractual or non-contractual, must be filed within 90 days of service of the answer without a court order. The clock starts the moment the answer is served.

Because the AVOID Act’s 90-day clock starts from service of the answer, pre-answer motion practice takes on new strategic significance. A motion for a more definite statement, or a motion to dismiss, does not start the AVOID Act clock and may serve the dual purpose of narrowing the claims while providing additional lead time to investigate potential third-party targets. Filing the answer on the last available day can strategically maximize the investigation window, though this must be weighed against court deadlines. Pre-answer stipulations to extend time to answer are equally important and may become standard practice for investigating cases.

The Act currently doesn’t explicitly prohibit stipulations between parties to extend the 90-day deadline or motions to the courts to extend it.

The employer/grave-injury exception

Under the new CPLR 1007(e), a defendant may implead an employer, outside the 90-day deadline under certain circumstances. These include (1) when defendants are seeking contribution or indemnification for a grave injury, (2) the identity of the employer had not been known before the 90-day window expired.

In either scenario, the third-party complaint against the employer must be filed within 90 days of the latter of the two triggering events, learning of the grave injury or identifying the employer.

Practically speaking, this exception is narrower than it may appear. Some categories of grave injury,  such as death, loss of a limb, and loss of an eye, are immediately apparent in the legal proceedings. Others, particularly a brain injury resulting in permanent total disability, require medical and vocational proof that may not crystallize for years.

Practical consequences

The period prior to filing the answer should not be considered a passive information-gathering stage. The 90-day window begins running the moment the answer is served, which means contract review, tender analysis, and risk-transfer decisions must occur before or simultaneously with the filing of the answer.

Obtaining the complete prime contract and subcontracts, all change orders and purchase orders, project daily logs and safety reports, incident and OSHA documentation, trade contractor certificates of insurance, and any other documentation must be treated as a priority. From this material, a third-party chart, mapping each entity’s contractual relationship, scope of work, and proximity to the accident, establishes the basis for the third-party complaint.

Broad early impleader practice may be necessary to avoid the 90-day deadline and to guarantee the risk-transfer options. Filing and then withdrawing or discontinuing later, if the target proves uninvolved, could be a possibility until enough precedent is established or the law is amended.

In Labor Law cases with significant exposure, particularly under New York’s Scaffold Law, paying careful attention to the issue deadline is crucial. Now, once the note of issue filed, no further impleader is permitted absent a good-cause or interest-of-justice showing. Counsel must monitor note-of-issue deadlines, document diligence with correspondence and meet-and-confer notes and be ready to vacate or extend the note if third-party discovery on potential defendants remains pending.

Under the AVOID Act, service of process of third-party summons and complaint must be made within 120 days or the third-party, otherwise, it is dismissed without prejudice. The 120-day deadline can be extended only upon showing of a good cause or in the interest of justice.

If a third-party complaint is not filed within 90 days of the answer, or after the note of issue is filed absent good cause, the right to pursue that claim in the main action is lost. While a separate indemnification action may theoretically be available, such actions present serious obstacles: settlements in the main action may extinguish contribution rights against non-parties, claim-splitting doctrines may bar recovery, and the loss of shared discovery means re-litigating facts already established in the main case at high additional cost. The bottom line is, a missed deadline can convert a fully indemnifiable loss into an unrecoverable one.

The first case to miss an AVOID Act deadline, and to lose its indemnification recovery as a result, will serve as the cautionary benchmark for every practitioner and every claim professional who handles New York construction files.

Mostafa Soliman serves as Counsel for leading insurance defense litigation firm Coffey Modica LLP, practicing out of their Buffalo, NY office. A seasoned legal professional with a robust background in international and comparative law, his practice focuses on defending clients in complex litigation cases. He previously served as a legal fellow with Equal Justice Works AmeriCorps in Western New York.