Governor Kathy Hochul recently signed an amendment to the Avoiding Vexatious Overuse of Impleading to Delay (AVOID) Act that simplifies the Act by requiring defendants to commence any third-party action within 90 days of serving its answer without an order of the court.
The Feb. 13, 2026, amendment also revises the application of the law to only apply to cases commenced on or after April 18, 2026.
Key Amendment Provisions
With the new amendment, under the AVOID Act, a defendant seeking to enforce any rights against third parties, must commence a third-party action within 90 days after serving an answer. To commence a third-party action outside of the 90-day limitation period, an order from the court is required.
The Act specifically prohibits the filing of any third-party action after the note of issue has been filed unless good cause is shown or in the interest of justice.
There are limited exceptions to the AVOID Act. One exception exists where the third-party defendant files a third-party complaint against plaintiff’s employer without an order of the court, then it must be within 90 days after the later of: (1) the date the identity of the employer of the plaintiff becomes known to the defendant or third-party defendant, or (2) the date the defendant or third-party defendant knows or should know the plaintiff sustained a grave injury, as the term is defined in Section 11 of the workers' compensation law.
The amendment further provides the AVOID Act shall only apply to all cases commenced on or after April 18, 2026.
Best Practices Moving Forward
As noted in our previous alert on the AVOID Act, third-party actions are one of the most common mechanisms to enforce and ensure the proper allocation of liabilities. The AVOID Act will now require defendants to swiftly identify any persons or entities they believe may be liable to them for plaintiff’s claims. Moving forward, defendants and their insurers must be prepared to adapt to a different third-party landscape to protect their rights:
- Early Investigation – Aggressive investigations into potentially liable parties should begin upon notice of claim or potential claim, including the use of pre-action discovery devices or subpoena powers to identify all potential third-party defendants.
- Early Filings – Third-party actions may, and in some instances should, be filed without the benefit of discovery or receipt of responses to defense and indemnity tenders to preserve risk transfer and allocation rights. Under the AVOID Act, deferred third-party actions will be barred if not commenced within the statutory timeframe but a third-party action that is brought timely (but later deemed unnecessary) can be easily discontinued.
- Overinclusion of Third-Party Defendants – In addition to filing early, defendants should err on the side of overinclusion of third-party defendants to preserve their ability to pursue all potential third parties.
- Secure Extensions from the Court – If additional time is needed to conduct relevant investigations and prepare third-party pleadings, motions should be filed requesting an order of the court for leave to file a late third-party complaint.
- Multiplicity of Interrelated Lawsuits – The AVOID Act does not affect a defendant’s ability to commence independent complaints against potentially liable parties. In actions where the deadlines to commence third-party actions have elapsed, a defendant and their insurer must be prepared to prosecute separate actions to recover contribution or indemnification from third parties.
- Piecemeal Resolutions – While one of the chief benefits of third-party practice has been the convenient and economical disposition of related issues in a single proceeding, the timing constraints posed by the AVOID Act may necessitate settlement of primary actions before third-party liability is determined. This will likely delay final resolution and keep claim files open longer. Claim files should be handled in tandem in order to achieve consistent resolution.
The AVOID Act is likely to result in a significant increase in third-party claims being brought early in litigation as well as independent claims being filed separately to enforce contractual and common-law rights. This will result in higher litigation costs for defendants, insureds and insurers. Despite these costs, defendants must be vigilant and proactive to preserve their rights. Beginning April 18, 2026, litigants must look at all new incoming cases to determine if a third-party complaint for indemnification or contribution should be filed.
