Wasted costs and referral to Regulator occurs when there was a failure to check responses from a generative AI tool leading to fictitious cases being put before the court.

The basis of the decision of the High Court related to the use or suspected use of generative Ai to produce documents placed before the court. In the case, the Law Centre instructed a junior barrister. In the pleadings placed before the court there were five cases which did not exist. The Housing Authority applied citing that they were unable to fine the cases and an intention to apply for wasted costs. The junior barrister, and approved by the solicitor from the Law Centre, saying they were ‘cosmetic’ errors and could be corrected. It was for the court to determine whether there should be wasted costs against the legal representatives for the claimant.

The High Court outlined that freely available generative AI tools, such as ChatGPT, were not capable of conducting reliable legal research. Those who did use such tools had a professional responsibility to check its accuracy and by cross-referencing with the sources that it was citing.  The risks could not be materially reduced by asking the tool to only provide an answer if it was sure. 

The High Court noted that there had to be practical and effective measures taken by those within the legal profession with leadership responsibilities such as heads of chambers and managing partners. This would be to ensure that there was compliance with professional and ethical responsibilities.  Where there was a failure by a legal representative to comply with their duties to the court the court had powers to publicly admonish the lawyer, make a costs order, make a waster costs order, strike out a case, referral to a regulator, contempt proceedings, and a referral to the police.   

In making a decision the court’s primary concern was to ensure that lawyers clearly understood the consequences of using AI for legal research without checking it.  The lawyer involved had been publicly criticised in the judgment and was being referred to the regulator.  The court did acknowledge some difficulties such as the level of work that had been given and other home/work issues. There was also £2,000 of wasted costs levied against the junior council and the Law Centre to be payable to the defendant.

Generative AI tools have the capability of ensuring efficiencies and producing mass amounts of material within seconds. However, caution must be taken in the use of such material especially when it comes to the professional and ethical concerns as can arise in terms of interactions with the court. This judgment gives a stark lesson not only in monetary terms such as wasted costs but, perhaps more importantly, the reputational damage that can arise when the results from AI tools are not thoroughly checked and relied upon blindly.  Both HR professionals and legal professions must heed this warning and ensure that where AI tools are being utilised that sufficient oversight of the responses is had to avoid hallucinations and misleading others or the court.

You can read the case in full here.