Shabbat Parashat Vaeira 5770

P’ninat Mishpat: Culpability for Bad Financial Advice – part II

(based on Eit Ladun – Rav Nir Vargon - Halacha Psuka, vol. 33)

[Last time we began discussing payment by an advisor who gave bad advice that caused a loss of money, and saw a machloket among the Rishonim if he had to be told explicitly that he was being relied upon.]

There is also a machloket regarding the Shulchan Aruch’s approach to the matter. The Shach (306:12) cites the Maharam as saying that only in the case of an inexperienced advisor does the Rif say that the reliance must be spelled out, whereas an expert should have understood he was being relied upon. While the Netivot Hamishpat (ad loc. 12) finds this logical, the Shach was bothered because the expert is always less culpable than the non-expert. Regarding the person who advised lending money to an irresponsible borrower, the Rama does not mention the need for spelling out reliance, but it might be talking about a case where that dependence can be ascertained (Shach).

We have seen so far that whether the advisor was a novice in the field or was an expert who got paid and gave bad advice, he would have to pay. In the case of the Heftzibah investments, let us take as examples, cases where the advisors were rabbis. Rabbis are for the most part novices regarding financial matters, and thus would seem to be liable even though they gave advice for free. However, a beit din who would judge such a suit would have to determine on a case by case basis whether it was made clear that the homeowner was relying on the rabbi’s advice. The likelihood of obligation would be higher in segments of society where the rebbe’s advice is usually accepted in a close to absolute manner [ed. note – one would imagine that the likelihood of a suit regarding such a relationship is remote.]. According to the aforementioned Maharam, in regard to relying on the advice, the novice rabbi would be like an expert regarding the lack of a need to clarify dependence. In a case where the advisor was involved in the promotion of the project, the Aruch Hashulchan (CM 129:3) says that he would be obligated even without stipulation of dependence.

These halachot teach us to what extent one upon whom people rely has to be careful before giving advice. As the mishna says: “Avtalyon says: Wise men, be careful in your words, lest you have to go to exile and you will be exiled to a place with bad water, and the students who follow you will drink the water and die, which would cause the name of Heaven to be defamed” (Avot 1:11).

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