Picture a Brampton homeowner suing a general contractor because a new basement leaks. The contractor reads the claim and thinks: the waterproofing was done by my subcontractor, using a product from a supplier, following a design from the homeowner’s engineer. If any of that is true, why should the contractor be the one left holding the bill?
This is a hypothetical, but the problem is common. A person served with a lawsuit often believes someone else is partly or entirely responsible. Ontario procedure gives defendants two main tools for dealing with this: the crossclaim, against someone who has already been sued, and the third party claim, against someone who has not. Using either one can shift the financial burden, and it can also make a lawsuit bigger, slower, and more expensive.
What follows is general information about Ontario’s civil rules, not legal advice on any actual dispute. If you have been served, your own response deadline may be running, so have the documents reviewed promptly.
The Basic Vocabulary
Legal terms in this area sound alike, so here is a plain map of who sues whom:
- Claim: the plaintiff sues the defendant.
- Counterclaim: the defendant sues the plaintiff back (Rule 27).
- Crossclaim: one defendant makes a claim against another defendant in the same action (Rule 28).
- Third party claim: a defendant brings in a person who is not yet part of the action (Rule 29).
- Fourth party claim: the third party does the same to someone else, and so on down the chain.
Using the earlier example, if the homeowner sued both the contractor and the subcontractor, the contractor would crossclaim against the subcontractor. If the homeowner sued only the contractor, the contractor would issue a third party claim against the subcontractor.
When a Crossclaim Is Available
Rule 28 lets a defendant crossclaim against a co-defendant who is or may be liable for all or part of the plaintiff’s claim. It also covers an independent claim for damages or other relief arising from the same or a related transaction, and situations where the co-defendant should be bound by the result of a dispute between the plaintiff and the defendant.
Where a defendant wants contribution from a co-defendant under the Negligence Act, the rules say it shall be done by crossclaim.
Crossclaims are drafted in the same document as your defence, which is then titled a statement of defence and crossclaim. It is generally due within the same period as the defence: 20 days after service if you were served in Ontario. It can also be delivered at any time before you are noted in default, or later with leave of the court. The co-defendant then has 20 days to deliver a defence to the crossclaim, or a different period if served outside Ontario.
Co-defendants often make a tactical decision here. Two defendants who spend a trial blaming each other can make the plaintiff’s job easier. Sometimes they agree not to exchange crossclaims right away, or to deal with allocation of responsibility privately after the main claim is resolved. Any such arrangement needs to be in writing and reviewed against limitation periods.
When a Third Party Claim Is Available
The test under Rule 29 mirrors the crossclaim test, but it is aimed at someone outside the lawsuit. A third party claim can be started against a person who is not a party to the action and who:
- is or may be liable to the defendant for all or part of the plaintiff’s claim,
- is or may be liable to the defendant for an independent claim arising from the same or a related transaction or occurrence, or
- should be bound by the determination of an issue between the plaintiff and the defendant.
Common situations include a vendor sued over a defect who says the previous owner or a contractor is responsible, a business relying on a contractual indemnity from a supplier, a driver who blames another driver, or a guarantor seeking reimbursement from someone else who also signed.
The claim does not have to be a sure thing. The word “may” matters. You do need a real factual and legal basis, though, and a claim thrown in for pressure can be attacked and can lead to costs consequences.
Deadlines: The 10-Day Rule and Your Limitation Clock
Timing is where many defendants get caught. Under Rule 29.02, a third party claim must be issued within 10 days after the defendant delivers a statement of defence, or at any time before the defendant is noted in default. If the plaintiff delivers a reply in the main action, the defendant has 10 days from that reply.
Outside those windows, a third party claim can still be issued with the plaintiff’s consent or with leave of the court. The rule says leave shall be granted unless the plaintiff would be prejudiced, so prejudice is the central question. A claim brought on the eve of trial that would delay a long-awaited hearing faces a much harder road than one brought shortly after discovery reveals someone’s role.
The third party claim must then be served on the third party within 30 days of being issued, along with all the pleadings delivered in the main action to that point. It also needs to be served on every other party. The third party then generally has 20 days to deliver a defence if served in Ontario, 40 days if served elsewhere in Canada or in the United States, and 60 days if served anywhere else.
Separate from the procedural deadline is the question of limitation periods. Two years under the Limitations Act, 2002 is the general rule, but section 18 deals specifically with contribution and indemnity claims between alleged wrongdoers. For that purpose, the day the first alleged wrongdoer was served with the plaintiff’s claim is treated as the day the act or omission took place, unless the person proves otherwise under the discovery rules.
In plain language, a defendant’s clock to claim contribution generally starts when they are served, and it is not paused while they wait to see how the main action turns out. If you were served with a lawsuit some time ago and have only just started thinking about bringing someone in, treat that as urgent.
A claim that is not for contribution or indemnity, such as a separate breach of contract claim against the third party, may have its own limitation period that started earlier. Contract clauses can shorten time too, if the agreement is a business agreement.
What It Is Like to Receive One
Many people served with a third party claim feel confused, since they may have never heard of the plaintiff. Being a third party means someone has claimed that you owe them, and they want you involved in the action. Your insurer may need to be notified immediately, especially if you have commercial general liability or professional coverage, as late notice can create a coverage dispute.
A third party can do two things, and sometimes must do both:
- Deliver a third party defence, answering the defendant’s claim against you.
- Deliver a statement of defence in the main action, answering the plaintiff’s claim directly, under Rule 29.05.
The second option deserves real thought. If the defendant’s defence to the plaintiff is weak or abandoned, you may be left exposed unless you can contest the plaintiff’s claim yourself. Choosing to do this gives a third party the same rights and obligations in the main action as a defendant, including with respect to discovery, trial, and appeal.
If you do nothing, you can be noted in default. Under Rule 29.07, the defendant may then obtain judgment against you at the trial of the main action or on a motion to a judge, and you will have given up your best chance to tell your side of the story. Silence is a very poor strategy.
How the Lawsuit, and Your Costs Exposure, Change
Adding parties multiplies almost everything. Each party is entitled to documents from the others. Discovery becomes more complicated. Scheduling a mediation or pre-trial with five sets of counsel can take months. Experts may need to address more issues.
The court has some ability to manage this. Rule 29.09 says a plaintiff is not to be prejudiced or unnecessarily delayed by a third party claim, and on the plaintiff’s motion the court can impose terms, including ordering that the third party claim proceed as a separate action. Otherwise, a third party claim is placed on the trial list immediately after the main action, and the court can give directions about how the two will be heard.
For a plaintiff, the arrival of a third party has one further wrinkle. A third party is not automatically liable directly to the plaintiff. If the plaintiff might want a judgment directly against that person, the plaintiff generally needs to add them as a defendant, subject to any limitation problem.
A third party claim that fails often carries its own costs consequences. If the plaintiff loses against the defendant, the third party claim usually falls away, and the question becomes who pays the third party’s legal costs. Courts have discretion, and in some cases may direct that an unsuccessful plaintiff pay or reimburse some of the costs of a successful defendant or third party. Those outcomes depend heavily on whether it was reasonable to bring the extra party in and how the claims were connected.
In other words, a plaintiff who sues and loses can sometimes be affected by costs from a chain of claims it did not start. A defendant who pulls someone in without good reason can bear the cost of that decision.
Contracts Can Decide the Issue
Before spending money on a third party claim, read the contract documents. Many commercial agreements contain:
- An indemnity clause, requiring one party to cover another party’s losses.
- An insurance clause, under which one party should have named the other as an additional insured.
- A limitation of liability clause, capping or excluding what can be recovered.
- A release or waiver of subrogation.
- An arbitration clause, which can raise a question of whether the dispute with the third party belongs in court at all.
A subcontract with a Brampton trades firm, a logistics agreement with a carrier, or a lease with a commercial landlord can each change the picture. Our page on contractual litigation describes some of the disputes where these clauses come up.
Business owners should keep those contracts and certificates of insurance somewhere easy to find. Asking a supplier for proof of coverage after a loss is much harder than asking for it when signing.
Small Claims Court Works Differently
The Small Claims Court uses different language and rules. A defendant who wants to claim against the plaintiff, a co-defendant, or someone who is not yet a party generally does so with a defendant’s claim under Rule 10 of the Small Claims Court rules. It must be issued within 20 days after the defence is filed, subject to a court order extending the time.
The same practical judgment applies, although the amounts are smaller. If the extra party adds months of delay over a modest claim, it may make more sense to defend the main action and pursue the other party separately afterward. Check the limitation period before choosing that route.
Questions to Ask Early
When you are served with a claim and suspect someone else is responsible, a few early questions will shape the decision:
- Who actually did the work, supplied the product, or made the statement?
- Is that person or company already a defendant?
- Is there a contract with an indemnity, limit, or arbitration clause?
- Do they have assets or insurance, so that a recovery would mean something?
- When were you served, and when does your defence fall due?
- Would blaming that person help or hurt the way your defence looks?
A claim against another party can be a sensible way to put the loss where it belongs, or an expensive detour against someone who can never pay. If you have been served and think another party should share the responsibility, you can contact the firm with the claim, your contracts, and the date you were served, and ask for an early review of the options.