Real Party in Interest

The issue of “real party in interest” may arise in insurance litigation when there is a subrogation claim. Imagine a car crash where the injured party was not at fault. If the injured party’s insurance company fully compensates her, it is subrogated to her rights against the negligent party. The question becomes who should be the named plaintiff in litigation: the insured or the insurer?

Illinois appellate courts provide that the interest of a subrogee cannot be “concealed in any proceeding brought for its benefit, but it must either be named as the plaintiff or disclosed as the real party in interest.” Prudential Ins. Co. v. Romanelli, 243 Ill.App.3d 246, 250 (1st Dist 1993). However, if the insured has even a de minimis pecuniary interest in the lawsuit, said lawsuit can be brought in his or her name. Shaw v. Close, 92 Ill.App.2d 1, 4 (Ill. App. Ct. 1968); Orejel, 287 Ill.App.3d at 604.

Put simply, the general rule is that if the insured has not been fully compensated by the insurance company the lawsuit can proceed in the insured’s name. However, if the insured has no pecuniary interest in the outcome of the case, then the case should proceed in the insurance company’s name. Obviously, this is the general rule and different facts can bring different results.

 If you have any questions related to insurance litigation, please feel free to give the attorneys at Perl & Goodsnyder a call at 312/243-4500 or visit our website: http://www.perlandgoodsnyder.com/. The attorneys of Perl & Goodsnyder have substantial litigation experience and are able to help individuals and businesses navigate the complexities associated with litigation.