Real Party In Interest Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Real Party In Interest, written in plain English, along with examples of how it is used.

What is Real Party In Interest?

(n) A Real Party In Interest is the person who is ultimately getting benefited from the outcome of the case or lawsuit filed by a person whether interested in that case or not. For example a company files a suit against an insurance company not paying insured workman compensation to the staff.

History and Meaning of Real Party In Interest

Real party in interest has its roots back to the beginning of the United States legal system, where it was defined as the actual person or entity who stands to gain or lose from the outcome of a lawsuit. The term is often used in civil litigation and is designed to prevent third parties from interfering in legal disputes where they have no direct interest. The idea behind the rule is to ensure that only the person with real skin in the game is able to pursue legal action.

In practical terms, real party in interest is a way of determining who has the right to sue in disputes, and makes it easier for parties to know who they need to deal with in order to resolve a dispute. Typically, the real party in interest is the person or entity that has been injured or harmed in some way, and who therefore has the legal right to seek damages or compensation from the party responsible.

Examples of Real Party In Interest

  1. A homeowner sues their insurance company for refusing to pay out on a claim. In this case, the real party in interest is the homeowner, who stands to gain compensation if the lawsuit is successful.

  2. An individual hires a lawyer to sue a construction company for injuries suffered in an accident at a job site. The individual is the real party in interest, as they are the person who has been harmed and has the most to gain from the lawsuit.

  3. A shareholder files a lawsuit against a company on behalf of all shareholders, alleging that the board of directors has engaged in fraud. In this case, the real party in interest is the shareholders as a group, rather than the individual who filed the lawsuit.

Legal Terms Similar to Real Party In Interest

  1. Standing: A legal concept that determines whether a party has the right to bring a lawsuit or appear in court. In many cases, standing is closely related to real party in interest.

  2. Beneficial owner: A person or entity that enjoys the benefits of ownership, even if they do not hold title to the property in question. Beneficial owners are often considered real parties in interest in legal disputes.

  3. Indispensable party: A party that must be included in a lawsuit in order for it to proceed. This concept is similar to real party in interest, but focuses more on the practicalities of litigation than on the legal principles involved.