A necessary party to a lawsuit is some person or entity who is required to be included in the action for the court to render a judgment. Generally there are three factors that may make a person or entity a necessary party. First is the question of whether or not the missing party may be directly harmed by the outcome of the case. Second is whether the missing party has rights in the subject of the litigation that creates an obligation on one or more of the other parties to the litigation. Last is the question as to if the court can provide full relief to the plaintiff in the event the court finds in his or her favor without the missing party.
The first factor that could lead to someone being considered a necessary party to an action is if that person or entity has an interest that could be directly harmed in the litigation. Take, for example, a contract between two people in which Person A grants a home to Person B for the duration of his or her life. If the contract provides for the home to go to Person C upon the death of Person B, Person C becomes what is called a third party beneficiary. Should someone sue Person B asserting that he or she is the true owner of the house and the agreement between Person A and Person B is void, Person C is a necessary party as his or her interest in the house will be harmed should the court decide to void the agreement.
The second factor that could result in a person being a necessary party is whether one of the present parties to the litigation has an obligation to that third party due to the subject of the litigation. Continuing the above example, it is clear that Person C is a necessary party by this standard as well. Person B has an obligation to confer possession of the home to Person C upon his or her death.
The third and final factor that typically decides whether or not a person is a necessary party is if the plaintiff can get complete relief without the presence of the missing party. The above example where another person is suing Person A and Person B still implies that Person C is a necessary party by this standard. Person C has a vested interest in the home as a third party beneficiary to the contract. Therefore, Person C’s interest must be destroyed if the plaintiff is to be granted the relief he or she seeks and Person C is a necessary party.