When a construction dispute leads to litigation, determining who may be responsible for a claim can take time. Contractors may need to review project documents, investigate alleged defects, consult with design professionals, or evaluate the work of subcontractors and suppliers. A New York law now places greater pressure on defendants to make those decisions earlier.
The Avoiding Vexatious Overuse of Impleading to Delay (AVOID) Act changes the deadlines for bringing additional parties into lawsuits in New York state courts. For construction businesses, the law makes early investigation and review of contractual obligations particularly important.
Key takeaways:
- The new law generally requires defendants to obtain court approval to bring third-party claims more than 90 days after serving their answers.
- The law can affect claims involving contractors, subcontractors, suppliers, and design professionals.
- Missing applicable deadlines may result in third-party claims being separated from the original lawsuit or dismissed without prejudice.
- Early review of contracts, indemnity provisions, and insurance coverage can help construction businesses identify potential claims.
What is the AVOID Act?
The AVOID Act took effect on April 18, 2026, and applies to cases commenced on or after that date. The law changes New York’s rules for impleader, the process by which a defendant can bring another potentially responsible party into an existing lawsuit.
For example, a general contractor sued over allegedly defective construction work may seek to bring a subcontractor into the case if the subcontractor could be responsible for some or all of the claimed damages. Under the AVOID Act, defendants generally have 90 days after serving their answers to file these third-party claims without a court order.
The law also places restrictions on claims filed later in the litigation. Third-party claims that violate the applicable requirements may be severed or dismissed without prejudice. Certain severed claims also cannot be consolidated with the original lawsuit.
Why does the law matter for construction disputes?
Construction claims frequently involve multiple businesses and overlapping contractual responsibilities. A dispute may involve an owner, general contractor, subcontractors, suppliers, and design professionals. Determining responsibility may require reviewing contracts, construction records, drawings, inspection reports, and other project documentation.
In some cases, the full extent of another party’s involvement may not become clear until depositions, site inspections, or expert analysis occur. New York’s requirements create a shorter window for evaluating whether those parties should be included in the lawsuit. For contractors, this means waiting until discovery is well underway may create additional procedural risks.
What happens if a contractor misses the deadline?
A contractor that seeks to bring another party into a lawsuit after the applicable deadline generally needs court approval. The law also restricts third-party filings after a note of issue has been filed, although exceptions may apply.
Claims brought in violation of the requirements are subject to severance or dismissal without prejudice. This may require a contractor to pursue potential recovery in separate proceedings rather than in the original lawsuit. The consequences will depend on the circumstances, including the timing of the claim and whether the court permits a later filing.
Does the AVOID Act apply in Pennsylvania?
No. The AVOID Act governs covered litigation in New York state courts. Pennsylvania has separate rules governing the joinder of additional defendants. Although Pennsylvania also imposes deadlines, its procedural framework differs from New York’s amended law.
Construction businesses operating in multiple states should be aware that the requirements for bringing additional parties into a lawsuit can vary by jurisdiction. The differences can affect how quickly a business needs to identify potentially responsible parties and evaluate available claims.
What should contractors consider when a claim arises?
The AVOID Act reinforces the importance of responding quickly when a construction dispute may lead to litigation. Contractors and other construction businesses should consider:
- Reviewing project contracts early. Identify indemnification provisions and other terms that may affect responsibility for a claim.
- Identifying potentially responsible parties. Evaluate the roles of subcontractors, suppliers, design professionals, and other project participants.
- Reviewing insurance coverage. Determine whether applicable policies may provide defense or indemnity coverage and whether notice is required.
- Preserving project documentation. Maintain contracts, drawings, correspondence, inspection records, and other materials relevant to the dispute.
- Involving legal counsel promptly. Early review can help identify filing deadlines and evaluate whether additional parties should be included in the litigation.
Construction businesses may also want to review their internal claims-response procedures before a dispute occurs. Having contracts, insurance information, and project records readily available can support faster decisions when litigation begins.
Preparing for construction claims
The AVOID Act changes the timeline for how quickly construction defendants must identify and pursue claims against other project participants. Although the law is intended to reduce delays, its requirements may also lead defendants to evaluate potential third-party claims before all relevant facts have been established.
For contractors, the central consideration is preparation. Early investigation, organized contract records, and prompt legal review can help businesses assess their options when a claim arises.
McNees’ Construction Group advises contractors, owners, developers, and other construction professionals on construction contracts, claims, and disputes. Contact a member of the group to discuss questions involving construction litigation and contractual risk allocation.
