What is the difference between necessary and indispensable parties?

The correct answer highlights the distinction between necessary and indispensable parties by emphasizing the role each type plays in the legal proceedings. Necessary parties are those whose participation in the lawsuit is required for the court to provide complete relief to the existing parties. Their presence contributes to ensuring that all relevant interests are represented and that the judgment can address the full range of issues involved in the dispute.

Indispensable parties, on the other hand, are those whose absence would fundamentally impede the court's ability to resolve the matter. If an indispensable party cannot be joined, the case cannot continue because their interests are so tightly bound to the outcome that their absence would adversely affect the fairness and completeness of any judgment.

The difference here lies in the degree of necessity: while necessary parties are important for ensuring a comprehensive resolution, indispensable parties are critical to the functioning of the case itself, and their absence would halt the proceedings entirely. Thus, while all indispensable parties are necessary, not all necessary parties meet the threshold to be considered indispensable.