Front-Loaded Impleader: How the AVOID Act Reshapes Risk Transfer Litigation

Amendment to CPLR § 1007

New York litigators should take immediate note of a statutory change that significantly restricts the filing of third-party actions. Governor Kathy Hochul has signed into law Bill S8071A/A8728, which amends NYS CPLR § 1007. The Bill, entitled the “Avoiding Vexatious Overuse of Impleading to Delay (AVOID) Act,” provides a defendant with 60 days after serving an answer to commence a third-party action sounding in contractual indemnification.

The AVOID Act further limits the filing of a second third-party action to 45 days after a third-party defendant appears. Any subsequent third-party actions must be commenced within 20 days after answering.

The statute permits a court to grant an extension of no more than 30 days, provided that the third-party action is not filed more than 12 months after service of the answer.

No third-party action may be commenced after the filing of the Note of Issue.

These time limitations do not apply where a defendant or third-party defendant seeks contribution or indemnification against a plaintiff’s employer in cases involving:

1. common-law claims based upon a grave injury; or
2. circumstances in which the identity of the employer was not known to the defendant until after the applicable time periods had expired.

Notably, this exception to the filing deadlines, whether pre- or post- Note of Issue, applies only to claims against employers, and does not extend to other potential parties whose identities were not previously known. For that, a party must seek the Court’s permission to file a third-party action, and only if it’s within the 12-month period since that party answered.

Practical Consequences for Risk Transfer Litigation

The AVOID Act compels a front-loaded approach to third-party practice. Counsel must evaluate indemnification rights, insurance coverage, and potential downstream liability almost immediately upon answering, potentially naming all conceivable third parties at the outset. In Labor Law actions, this may require impleading every subcontractor that worked on a project.

The reality is that the AVOID Act may result in expanded and extended discovery, additional depositions, and increased motion practice, thereby delaying resolution of cases - the very outcome the statute appears intended to prevent. Clearly, the legislature, in attempting to curb a perceived delay tactic, has now mandated it.

While we do know there will be amendments, whether the amendments will make this law less restrictive remains unclear.

The law takes effect April 18, 2026.