Who is a “Third Party” in a Lawsuit?

Who is a “Third Party” in a Lawsuit?

Often in a lawsuit, one party (the plaintiff) sues a second party (the defendant). These two are the only ones participating in the lawsuit. 

However, it is common for an additional third party to join the legal action. Sometimes they join voluntarily, and sometimes they are added unwillingly. These third parties have formal names like “impleaders,” “intervenors,” and “interpleaders.”

Third Parties: Impleaders, Intervenors, and Interpleaders

So, what’s the difference between an impleader, intervenor, and an interpleader? Here’s what you need to know.

What is an Impleader?

Impleading refers to the procedure in which a plaintiff or defendant brings in a new party to a lawsuit. This new third party may be liable to the party impleading them. There are two common ways this procedure works.

First, the defendant, now called a third-party plaintiff, adds a person to the lawsuit. They are called a third-party defendant.

Second, the defendant may file a counterclaim against the plaintiff. In this case, the plaintiff may bring a third party (who the plaintiff believes to be liable) into the lawsuit in a similar manner.

For example, assume Phyllis is involved in a car accident with Dan. Phyllis sues Dan, claiming that he negligently ran a red light and crashed into her. Dan, however, claims that Tom was driving the car. Dan, as a third-party plaintiff, can add Tom as a third-party defendant.

What is an Intervenor?

Texas civil procedure also provides for “intervention” in a legal action. Unlike an impleader, an intervenor is a party that petitions to join a lawsuit. There may be several reasons why someone would want to do this. For example, the litigation could affect the intervenor’s legal rights or other interests. Alternatively, the result of the litigation could prevent the intervenor from filing their own lawsuit on the same or similar issues in the future.

Intervention is not a right. Any existing party to the lawsuit may challenge the intervention. The Texas Supreme Court has held that courts may grant a petition to intervene if the intervenor has a justiciable interest.

A justiciable interest means: 

  1. The intervenor had a right to file a lawsuit against the at-fault party had the original action not been brought; then
  2. The intervenor would have been entitled to recover at least some of the relief sought in the original lawsuit.

There are good public policy grounds for intervention. It saves time and court resources by consolidating multiple legal issues into one lawsuit instead of litigating them separately.

What is a Federal Intervenor?

Intervention is also possible in federal lawsuits. One common example is the procedure allowed under the False Claims Act. Under this law, an employee may report or disclose that their company has violated the Act. The employer may not retaliate against the employee for reporting the violation. If they do, the employee may sue their employer for damages.

However, there are times when the issues in the lawsuit also implicate the interest of the federal government, like when the employer engaged in fraud or otherwise lied to the federal government. In this case, the government may intervene and assume responsibility for the prosecution of the case, although the employee remains a party to the lawsuit and is eligible for damages if the employer violated the law.

What is an Interpleader?

Another procedure for allowing a third party to be brought into a lawsuit is called interpleader. This involves insurance companies and policy funds. When competing claimants make a claim for policy funds, the insurance company may file a lawsuit. In this legal action, the insurance company names the third-party claimants. Then, the insurance company is generally dismissed from the case, and the court adjudicates which claimant is entitled to the policy funds.

For example, assume that Mark and Malaya divorce after several years of marriage. Pursuant to the divorce settlement, Mark makes Malaya the beneficiary of a life insurance policy for $1,000,000. 

A couple of years later, Mark marries Tonya and notifies his insurance company that he is changing the beneficiary from Malaya to Tonya. The insurance company denies the request, citing the divorce settlement, and asks Mark to amend his request. However, Mark dies in a car accident before he can do so. Within a month, the insurance company receives two competing claims – one from Malaya and one from Tonya.

The insurance company can file an interpleader action. It deposits the $1,000,000 with the court and names Malaya and Tonya as third-party claimants. The court then decides which claimants are entitled to the proceeds of the life insurance policy.

Contact a Personal Injury Lawyer for Help

The process of adding third parties to a lawsuit is further complicated by legal terminology like impleader, intervenor, and interpleader. However, the goal of third-party joinder is to get the right parties together in one legal action to resolve the disputes.

If you have a claim, consult an experienced personal injury lawyer at Stephens Law Firm today to protect your rights and zealously represent your interests. Call (817) 420-7000, or contact our law office in Texas online to learn more.