A bill recently signed into law by New York Governor Kathy Hochul has sent tremors through New York’s litigation community and will have a significant impact on the defense of claims.  The new law, known as the “AVOID Act”, establishes sharply curtailed time limits for impleading third-party defendants into any action. While the final wording of the law will not be known until early January 2026, in general, contractual indemnification impleaders will have to be brought by a defendant within 60 days of the service of the Answer. Impleaders filed in violation of the new rule will result in a severance of the third-party action or in a dismissal without prejudice – neither of which helps the defense of the claim.

As a result of the new law, defense counsel, carriers, and insureds must coordinate efforts early to secure relevant documents and determine potentially liable third parties. Failure to do so will likely result in a claim being adjudicated against an insured without all other potentially liable parties (and their insurers) contributing to the judgment. In light of this new law, MMP&S urges a S.W.A.T. team approach, including (i) pre-suit client/insured contact to secure party information and documents, (ii) searches of relevant agencies (like the Department of Buildings) to secure relevant party information, and (iii) securing a sufficient extension of time for responding to the Complaint (with consideration of pre-Answer Motions to Dismiss, which would have the effect of lengthening the answering time).