Casablanca On-Line Inc. provides free counselling advice for those in need. This past year, the company was sued for $2,000,000 by a client who claims he was given bad advice by one of Casablanca On-Line’s counsellors who suggested he quit his job and move out West to start over. The lawyer for Casablanca On-Line feels very strongly that the company will not have to pay. In the past five years, only three similar claims were made. Two of those cases were thrown out of court and the third is ongoing. Casablanca On-Line was not involved in any of the three other cases. Casablanca On-Line prepares its financial statements using IFRS.
Does this lawsuit meet the criteria of a provision or a contingent liability? Explain your answer.