New York's AVOID Act Imposes Strict Deadlines on Third-Party Practice

New York Gov. Kathy Hochul signed the Avoiding Vexatious Overuse of Impleading to Delay (AVOID) Act into law on December 19, 2025, fundamentally changing how third-party practice operates in New York state. The law takes effect on April 18, 2026, and will apply to all cases pending on or after that date. Defendants, insurers and in-house counsel should familiarize themselves with these new requirements now and take appropriate action before the effective date.

Key Provisions

The AVOID Act amends Civil Practice Law and Rules (CPLR) Section 1007 to impose express time limits on the commencement of third-party actions, an area where New York law was previously silent. The New York Legislature stated that its purpose is to prevent defendants from using late impleader as a delay tactic and ensure that necessary parties are brought into an action within one year after the filing of the complaint.

• Time Limits for Original Defendants. A defendant must file and serve a third-party summons and complaint within 60 days after serving an answer if the third-party claim arises from a contractual relationship with the proposed third-party defendant. For noncontractual claims, such as contribution or common-law indemnification, the 60-day clock begins when the defendant becomes aware that the proposed third-party defendant may be liable for all or part of the plaintiff's claim.
• Shorter Deadlines for Successive Third-Party Actions. The AVOID Act imposes progressively shorter time limits for each level of third-party practice: A first third-party defendant must commence any further third-party action within 45 days of serving an answer; a second third-party defendant has 30 days; and any subsequent third-party defendant has only 20 days.
• Extensions and Court Approval. Parties may stipulate to extend these deadlines by up to 30 days without court approval. Any extension beyond 30 days requires a court order. Critically, if more than 12 months have passed since the defendant filed an answer, commencing a third-party action requires both court approval and written consent from the plaintiff.
• Note of Issue Cutoff. The AVOID Act prohibits the filing of any third-party complaint after the note of issue has been filed. A third-party action filed in violation of this rule must be severed or dismissed without prejudice, and a motion to consolidate the severed action with the main action is expressly prohibited.
• Exception for Plaintiff's Employer. A limited exception applies to third-party claims against a plaintiff's employer. Where the defendant seeks contribution or indemnification based on a "grave injury" as defined by the Workers' Compensation Law or where the identity of the employer was not previously known, the defendant has 120 days from the later of either event to bring the third-party action.
• Reduced Service Period. The AVOID Act reduces the time for serving a third-party summons and complaint from 120 days to just 20 days after filing.

Practical Implications for Litigation Strategy

The AVOID Act fundamentally shifts the timing of risk-transfer decisions to the earliest stages of litigation. Defendants can no longer wait for discovery to unfold before identifying potential third-party defendants. The compressed deadlines will be particularly challenging in complex matters involving multiple potential parties, such as construction defect cases and claims under New York Labor Law §§ 240(1) and 241(6), where contractual indemnification provisions and relationships among project participants may not be immediately clear.

The AVOID Act's "becoming aware" standard for noncontractual claims will likely generate litigation over when the 60-day clock begins. Disputes may arise concerning whether accident reports, request for information documents, insurance correspondence or other communications should have triggered awareness of a potential third-party defendant's liability.

Additionally, because the AVOID Act limits a defendant's ability to implead parties but does not restrict the plaintiff's control over the case, plaintiffs may gain increased settlement leverage by strategically timing the filing of a note of issue to cut off third-party claims before they can be asserted.

Recommended Actions

In light of the AVOID Act's approaching effective date, companies should take the following steps:

• Review Pending Matters. Defense counsel should review all pending litigation to determine whether any third-party actions should be commenced before April 18, 2026, to avoid being subject to the new time constraints.
• Accelerate Early Case Assessment. Upon receipt of a complaint, defendants should immediately identify all potentially responsible parties and analyze contractual indemnification, additional insured and defense provisions before filing an answer.
• Update Internal Protocols. Companies should update incident-response playbooks to ensure that legal review begins immediately after any significant accident or claim and should organize contract management systems so that relevant indemnity and insurance provisions can be located quickly.
• Preserve Project Documentation. Clients should obtain and preserve all project-related contracts at the outset of any project so they are immediately available for review if a claim arises.
• Consider an Overinclusive Approach. Given the risks of missing a deadline, defendants may need to err on the side of impleading all potentially liable parties early in the litigation, even where the facts are not fully developed.
• Adjust Reserve Strategies. Recognize that missed impleader deadlines may permanently shift costs onto the defendant, which should be reflected in early reserve assessments.

If you have questions about how the AVOID Act may affect your pending or anticipated litigation in New York, please contact the authors or your Holland & Knight relationship attorney.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.