It is possible to take action to retrieve a domain name in these circumstances, but you should only consider doing it if a) you feel that you have a good case to make for claiming the name - your business has used it for years,or has become well-known for its website on the domain. b) you have the financial resources to enter into what could be a long and costly dispute process.
Generally it's not a good idea to enter into any domain name dispute unless you have taken legal advice, and feel that you can produce evidence to show a valid claim to the name. Having a business with the same name, and having a site on it for two years would normally be considered a good ground for a dispute procedure, particularly if the new purchaser was in the same business,and was a direct competitor. A lot depends on the circumstances surrounding individual cases however, which is why legal advice is essential.
Normally web-hosting companies issue automatic renewal reminders for domain name renewals - did this not happen in your nephew's case? A name renewal is an important factor for a business that trades via a website,and it's unusual to miss a renewal date - you get a suspense period during which the name can still be renewed, and several reminders would normally be issued.