A party in interest, also called a real party in interest, is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.
The required interest must be a present and substantial interest, not a mere expectancy or a future, contingent, subordinate, or consequential interest. It must be a material and direct interest, as distinguished from a mere incidental interest.
Generally, every action must be prosecuted or defended in the name of the real party in interest, unless otherwise authorized by law or the Rules. Failure to bring the suit in the name of the real party in interest can be a ground for dismissal.
In actions prosecuted or defended by a representative, such as a trustee, guardian, executor, or administrator, the beneficiary is deemed to be the real party in interest and must be included in the title of the case. A representative like an attorney-in-fact is generally not the real party in interest.
In contractual matters, the parties to the contract, their assignees, and heirs are typically the real parties in interest. A person not a party to a contract generally cannot sue or be sued upon it unless their interest is affected, such as being an assignee.
In criminal proceedings, the "party" can include the government, the accused, the offended party (complainant), employers civilly liable, and bail bondsmen. The People of the Philippines are the real parties-in-interest in the criminal action itself. The private offended party or complainant is also considered a "party" and has an interest in the civil liability arising from the crime.
For intervention in a case, a person must have a legal interest in the matter in litigation, in the success of either party, or against both, or be adversely affected by the disposition of property in the court's custody. This legal interest must be actual, material, and direct, not merely indirect or contingent.
Other types of parties in interest include indispensable parties, who are real parties in interest without whom no final determination can be had, and necessary parties, who ought to be joined for complete relief but are not indispensable. Nominal or pro forma parties are joined due to technical rules but have no real interest or relief demanded.