As subrogation counsel, we often encounter situations where there is already active subrogation litigation when an assignment is received from insurer clients.
In such scenarios, we must consider whether it is more practical to seek intervention in the existing litigation or to file a new lawsuit, which could potentially be consolidated with the ongoing case. To determine the best course of action, it is essential to know whether intervention is an option.
Generally, there are two types of intervention: (1) permissive intervention under Federal Rule of Civil Procedure 24(b); and (2) intervention as a matter of right under rule 24(a)(2). In the former, a court may allow a party to intervene in a case if the motion is timely and the intervenor’s cause of action shares a common question of fact or law with the existing action. Courts typically analyze the timeliness of permissive intervention by using the following nonexclusive factors: (1) the length of time since the movant became aware of its interest in the case; (2) the potential for prejudice to the existing parties; and (3) the potential for prejudice to the movant. The prejudice analyzed relates to the intervenor’s delay in joining the litigation, rather than the burden on an existing party to defend against an additional litigant.
Intervention as a matter of right is granted if the following criteria are met: (1) the movant claims an interest relating to the property or transaction that is the subject of the action; (2) the disposition of the litigation may, as a practical matter, impair or impede the movant’s interest; and (3) the existing parties do not adequately represent the movant’s interest. WildEarth Guardians v. Nat’l Park Serv., 604 F.3d 1192, 1198 (10th Cir. 2010).
In a recent decision, a federal judge in Kansas examined both permissive intervention and intervention as a matter of right in the context of a subrogation action. SF Overland Park, LLC v. Johnson Controls Fire Prot., L.P., No. 2:24-CV-02601-JWL-TJJ, 2025 WL 2461305 (D. Kan. Aug. 26, 2025).
In Overland Park, the court determined that the subrogation insurer had a valid interest in the subject of the existing action because of the subrogation provision in the policy issued to the plaintiffs/insureds, and because the intervenor issued payment to the insureds. The court noted that an interest sufficient to warrant intervention as a matter of right is fact-specific; it must be “direct, substantial, and legally protectable” and “one that would be impeded by the disposition of the action.” Barnes v. Sec. Life of Denver Ins. Co., 945 F.3d 1112, 1121 (10th Cir. 2019). Furthermore, “the mere threat of economic injury is sufficient for granting intervention.” LM Ins. Corp. v. Smart Framing Constr. LLC, No. 24-2097-JAR-ADM, 2024 WL 4134898, at *2 (D. Kan. Sept. 10, 2024) (citing Utahns for Better Transp. v. U.S. Dep’t of Transp., 295 F.3d 1111, 1115 (10th Cir. 2002)).
The Overland Park court further held that the intervenor’s interest would be impaired if it was not allowed to intervene because the defense claimed that the loss was caused by the insureds’ negligence. SF Overland Park, 2025 WL 2461305 at *3. There was a risk that any recovery by the insureds would be insufficient to cover the damages demanded both by the policyholders and the intervenor. Most notably, the court found that since the defense alleged negligence by the insureds, the interests of the plaintiffs/insureds and the intervenor were not fully aligned. Id. Therefore, the court concluded that the difference in interests satisfied the second factor, indicating that the disposition of the litigation might impair or impede the intervenor’s interest. Id. Additionally, because of these differing interests, the existing parties could not adequately represent the intervenor’s interests, thereby satisfying the third factor. Id at 4. Consequently, the court ruled in favor of the subrogation insurers and granted the motion to intervene as of right. Id.
While there is no one-size-fits-all approach to weighing intervention in an existing action, insurers should consider factors such as timing, the amount of insurance coverage available to potential tortfeasors, and the number of claimants pursuing recovery.
