Her waterproofer settled and left her holding the claim

The situation

Shalini and Sanjay had known each other since arriving in Leamington within a year of one another, both taking day jobs while they found their footing, Shalini as an early childhood educator and Sanjay as a forklift operator at a produce distribution warehouse common to the area's greenhouse economy. The two families became close, sharing meals and helping each other through the early years of settling into a new city, and it was that friendship, more than any formal business plan, that led them to start taking on small renovation jobs together on weekends. What began as helping a neighbour finish a basement grew, over four years, into a modest but steady side business, mostly basement finishing and small additions for homeowners around the area, work that had grown by referral rather than advertising.

For a basement renovation that included waterproofing ahead of finishing the space, Shalini and Sanjay subcontracted the waterproofing itself to Tom, someone Sanjay had worked alongside briefly at the warehouse years earlier before Tom left to start his own business doing foundation and drainage work. It was the first job the two businesses had done together, arranged mostly through a handshake and a modest deposit rather than a formal written agreement, with Sanjay vouching for Tom's competence based on what he had seen of him as a careful, reliable colleague during their time working the same shifts.

The basement finishing went ahead on schedule, with drywall and flooring installed over the waterproofed foundation walls once Tom's portion of the work was signed off as complete. Roughly eight months later, after a stretch of heavy spring rain, the homeowner found water seeping along the base of one wall, damaging flooring and the lower section of drywall Shalini and Sanjay's crew had installed on top of Tom's work. The homeowner's own investigation, and later a formal expert report commissioned once the dispute began, pointed to a gap in the waterproofing membrane along one section of the foundation, work that fell entirely within what Tom, not Shalini and Sanjay's crew, had been hired to do.

The homeowner sued Shalini and Sanjay's business directly, as the contractor of record on the job and the party they had a signed agreement with, for the cost of repairing both the water damage and the finishing work that had to be torn out to fix it properly. Shalini, who spoke limited English and had never been party to a lawsuit before in either country she had lived in, found the statement of claim arriving in the mail one of the more disorienting experiences of her time running the business, unsure at first whether it meant the business itself was at risk.

The risk we had to size

The immediate legal step was clear in principle: because the actual failure was in work Tom had performed, Shalini and Sanjay's business could bring what is called a third party claim against him within the same lawsuit, asking the court to require Tom to cover any amount they were found responsible for, on the basis that his defective work, not theirs, had caused the damage the homeowner was claiming for.

Sizing the real risk meant looking past that straightforward legal theory to the practical position Shalini and Sanjay were actually in as the case unfolded. As the contractor who homeowners had a direct relationship with, they carried the primary exposure regardless of whose work had actually failed; the homeowner's claim did not depend on proving Tom specifically was at fault, only on proving the basement had failed and that Shalini and Sanjay's business was the party they had a signed contract with. The third-party claim against Tom was the mechanism for shifting that cost sideways once liability was established, not a defence to the original claim itself, and that distinction needed to be understood clearly from the outset.

A second layer of risk came from Tom's own financial position, which our office looked into early rather than assuming it would work itself out. He was a sole proprietor with limited insurance coverage and modest personal assets, meaning that even a fully successful third-party claim against him might produce a judgment that was difficult, or practically impossible, to actually collect in full. That risk needed to be explained clearly to Shalini, through an interpreter for the more technical parts of the discussion, so she understood from early on that winning the claim against Tom on paper and actually being paid by him were two separate questions with two separate answers.

The amount in dispute, once repair costs, the torn-out finishing work, and the homeowner's other claimed losses were totalled, sat in the tens of thousands, meaningful for a weekend business Shalini and Sanjay ran alongside full-time jobs and modest household incomes, and not the kind of amount that justified open-ended litigation risk stretching over years if a workable settlement was available instead through negotiation.

There was also a relationship to consider that a purely financial risk assessment would have missed. Sanjay had vouched for Tom, and the friendship between the two men, along with Sanjay's own working relationship with Tom from their warehouse days, meant the family weighed how hard to push the third-party claim against more than just the numbers on paper. That was part of what we had to size too, not as a legal factor, but as something that shaped how quickly Shalini and Sanjay wanted the whole matter resolved.

What we did

1. Arranged qualified interpretation from the first meeting onward. Because the case turned on technical distinctions between contractor and subcontractor liability that are hard to follow even in a first language, we used a professional interpreter for every substantive discussion with Shalini rather than relying on Sanjay or family members to translate, so her instructions and her understanding of the risks she faced were genuinely her own and accurately recorded on file.
2. Filed the third-party claim against Tom promptly. Bringing Tom into the existing lawsuit as soon as the evidence supported it, rather than waiting to sue him separately later, preserved the ability to have liability determined in one proceeding and avoided the added cost, delay, and risk of inconsistent findings that a second, standalone claim against him would have created. It also meant the same judge and record would govern both questions, so Tom's share of responsibility did not have to be relitigated from scratch later.
3. Obtained the expert report identifying the specific defect. We arranged for an independent foundation specialist to review the homeowner's own expert findings and confirm, in terms that would hold up if contested at trial, that the failure traced specifically to the waterproofing membrane gap rather than to any aspect of the finishing work Shalini and Sanjay's crew had performed themselves above it.
4. Assessed Tom's actual ability to pay early, not at the end. Rather than waiting until a judgment was already in hand to discover Tom had limited insurance and few personal assets, we raised the collectability question at the very outset, which directly shaped the advice given to Shalini about how much weight to put on the third-party claim versus pursuing her own negotiated resolution with the homeowner.
5. Negotiated directly with the homeowner in parallel. Because Tom's limited resources meant the third-party claim might never fully cover any judgment against Shalini and Sanjay, we opened settlement talks with the homeowner's lawyer independent of how the claim against Tom was proceeding, aiming to reduce the couple's exposure regardless of what ultimately happened in the claim against Tom. Running both tracks at once meant the couple was never left waiting on Tom's outcome before their own exposure could start shrinking.
6. Responded when Tom settled out of the case separately. Partway through the litigation, Tom reached his own settlement with the homeowner, paying a modest amount to be released from the claim entirely and stepping out of the proceeding for good. We had to recalibrate the strategy quickly, since that left Shalini and Sanjay facing the remaining claim without Tom's participation, his testimony, or any further financial contribution from him.
7. Used the expert findings to negotiate a reduced settlement. With Tom gone from the case but the expert evidence about his defective work still fully available to us, we used that evidence to argue the homeowner's remaining claim against Shalini and Sanjay should be discounted to reflect Tom's real share of responsibility, even though he was no longer a party contributing anything toward payment.
8. Explained each strategic shift to Shalini as it happened. Because Tom's settlement changed the shape of the case midway through, we made sure, through the interpreter, that Shalini understood why the strategy was changing and what it meant for her likely outcome, rather than letting a significant procedural shift pass without her fully grasping its consequences. That ongoing explanation let her make each decision as an informed choice rather than something that simply happened to the file around her.

The outcome

The case settled with Shalini and Sanjay's business paying a negotiated amount to the homeowner, reduced meaningfully from the full repair claim originally sought, reflecting the expert evidence showing much of the failure traced to Tom's work rather than to the finishing work performed above it. It was not the outcome of having Tom's earlier settlement simply offset their own payment; because he settled separately and directly with the homeowner on his own terms, his payment did not automatically reduce what Shalini and Sanjay still owed under the settlement the homeowner's lawyer was ultimately willing to accept.

The final settlement amount landed roughly in the middle of the range the case had been valued at from the outset, a genuine compromise rather than a clear win for either side of the dispute. Shalini and Sanjay gave up the chance to have a court formally apportion blame in their favour after a full trial, but in exchange they avoided the cost, delay, and real uncertainty of a trial where Tom, no longer a party to the case, would not have been compelled to testify or produce records in the same way he might have if he had remained.

Shalini told us afterward, through the interpreter, that having every conversation properly translated throughout the case mattered to her as much as the financial result did, because she had understood each decision as it was made in real time rather than learning about it after the fact from Sanjay's summary. The business continued operating after the settlement without interruption, and Shalini and Sanjay now use a written subcontractor agreement for every job, with proof of current insurance required before any waterproofing or foundation work is allowed to begin.

The dispute also changed how the two of them think about the business more broadly. What had run for years on trust and referrals now runs with a short written checklist before any subcontractor starts work, a change Shalini said she wished had existed before the renovation that led to the claim, not after it.

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