One reason for adding a party to a proceeding is to ensure that both sides are present to provide arguments to the panel as part of the adjudicative process. In HE v APEGA Appeal Board, 2019 ABCA 298, http://canlii.ca/t/j1w4d, a professional engineer appealed a discipline finding to court. The legislation made the tribunal, as opposed to the prosecutor, the respondent to the appeal. Generally the tribunal is limited in what submissions it can make of its own decision. The tribunal requested that the prosecuting entity at the discipline hearing be made a party to present the other side of the argument to the Court. The Court agreed indicating that this was appropriate and added the prosecuting entity as a party.
There are other circumstances in which a third entity can be added as a party to the proceedings. But the starting point for the analysis is to ensure that both sides at the original proceeding have standing.