After winning a lottery, Janice consulted Len, a stockbroker and accountant, about how to invest the huge sum she had won. In their discussion she mentioned that her brother, Steve, would probably ask her for the information and advice she received from Len. "Even though he won as much as I did," she said, "he's too cheap to pay for the help we both know we need, so I better make some notes." Among other things, Len advised Janice to buy shares in a company just before it bought heavily into retail stores in the U.S.A. and became overextended. Janice didn't act on that piece of advice, but Steve did.
a. Discuss whether Steve can bring a suit against Len.
b. If Steve can bring a suit, is he likely to succeed?

Question

Idalia Morales · Accepted Answer

Final Answer :

a. Since Len was aware, from what Janice said, that Steve would probably be relying on whatever advice he gave Janice, Steve would be able to bring a suit against Len for professional negligence even though he is not Len's client.
b. If Len's advice met the standards of a reasonable stockbroker-if, for example, it was based on the proper kind of research-then he is not liable for Steve's losses. Len does not have to be perfect; he need only act in accordance with the standards expected in his business. He can be wrong without incurring liability.

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