Legal Definitions - in pari causa

in pari causa

This Latin phrase translates to "in an equal case" or "in an equal cause." In legal terms, it describes a situation where two or more parties involved in a legal matter have equal rights, standing, or claims concerning the issue at hand. When parties are considered "in pari causa," it implies that no single party has a superior legal position over the others regarding the specific rights or obligations being disputed.

• Example 1: Unsecured Creditors in Bankruptcy

  Imagine a small business declares bankruptcy, owing money to several different suppliers. These suppliers are all unsecured creditors, meaning their debts are not backed by specific collateral. If there isn't enough money to pay all suppliers in full, they are typically treated in pari causa. This means they all have an equal right to receive a proportional share of the available funds, rather than one supplier being paid entirely before others receive anything.

• Example 2: Co-Owners of Joint Property

  Consider two siblings who jointly inherit a house, each owning an undivided 50% share. If they disagree on whether to sell the house or how to manage it, their ownership rights are considered in pari causa. Neither sibling has a superior claim to the property or a greater right to dictate its future than the other, as their legal interest in the property is equal.

• Example 3: Multiple Beneficiaries of a Trust

  Suppose a trust fund is established for the benefit of three grandchildren, with instructions that the remaining assets be distributed equally among them upon reaching a certain age. If the trustee needs to make a decision that affects the distribution, all three grandchildren are considered in pari causa regarding their entitlement to the trust's assets. Each has an equal and identical right to their share, and no one beneficiary's claim takes precedence over another's.