For New York litigants, this is a must-read. Dramatic changes to the timing of third-party actions (impleaders) have been enacted—representing the most significant shift in third-party practice in decades. Governor Hochul has signed the bill into law as Chapter 704 of the Laws of 2025, effective in 120 days.
Third party actions sounding in contractual indemnification must be filed within 60 days after serving an answer or 60 days after learning of potential common law liability. Otherwise, the third-party action will be severed or dismissed without prejudice. Second third-party actions to be filed within 45 days and subsequent third-party actions within 30 days.
No impleaders after Note of Issue has been filed. Statute doesn't apply to "grave injury" claims against employers.
Editor's note:
Think of the impact to this change in premises and Labor Law risk transfer cases. No longer is there any significant time to negotiate the assumption of defense in additional insured/contractual liability claims or to secure agreements by excess carriers to follow the lead of the underlying insurer in picking up indemnity for additional insureds. Often, an excess carrier want to wait until depositions are completed, at least, to make that decision. Will no longer be able to give that courtesy.
To read the Chapter, click here.
Governor Hochul signed legislation:
- Provides that third party litigation funders must register with the Department of Financial Services (discovery rules may be coming, but not yet)
- Changes the requirement for peer-to-peer share programs’ insurance coverage
- Establishes standards for glass repair
- Modifies the definition of Deceptive Business practices under Section 349 of the Business Corporation Law.
Thanks to the New York Insurance Association for updates.
To read about these legislative changes and veto messages, click here.
Other Significant Legislative Vetoes and Changes
Governor Hochul vetoes legislation that would:
- Allow direct recovery of verdicts against third party defendants
- Require “liberal construction” of New York State Labor Law
- Prohibit insurers from settling claims within 30 days of accidents
- Would have provided that foreign corporations that apply for authority to do business, automatically consented to personal jurisdiction in NY.
