Twelve year old Jane Adler was babysitting two boys, aged 3 and 5 in the boys' family home. The boys' parents (and owners of the home) are Jim and Kerry Walsh. A fire broke out in the home. Jane was able to get the boys and the family pet out of the house, so that no lives were lost and there were no injuries. She was heralded as a hero in the local press.

The fire destroyed the Walsh family home and severely damaged the two houses on either side.

It was alleged that the fire started by the five year old, who was playing with a lighter in the bathroom.

TD insurance, the insurer of one of the neighbours, paid $55,000 to repair damage to their insured's home. TD has now sued Jane Adler as well as Jim and Kerry Walsh to recover the $55,000 it paid to repair their insured's home.

After a huge public outcry, TD has dropped the suit against Jane Adler, but is continuing as against Jim and Kerry Walsh.

On what basis could TD sue Adler and the Walshes on behalf of the neighbour (on what legal principle is it based ie, how can an insurance company sue for the money they paid out)?

On what legal theory would TD have sued Jane Adler and the Walshes?

What was the risk to TD in naming Jane Adey in the lawsuit?

Please provide a detailed explanation.