I'm left-handed and can answer that question :-) Yes, trauma during pregnancy and/or birth can be one of the causes of left-handedness (but that's not a bad thing!)
The Left-Hander Syndrome http://www.amazon.com/Left-Hander-Sy.../dp/0679744681 is a really good book, explains a lot, was written by a well-known science writer.
That your brother-in-law has always been "incorrigible" -- I don't know how he was brought up/corrected by his parents or in school and may have learned such behavior. I don't know that its particularly a mental illness, people make selfish and/or stupid choices everyday. It sounds like he has plenty of enablers to me and I don't see why he would "stop" and do anything differently?