"A family in Alabama lost a trust dispute last month because their lawyer filed citations to cases that do not exist. The Alabama Supreme Court dismissed their appeal, calling the conduct egregious, and barred the lawyer from filing in that court again without co-counsel sign-off."
"In the same month, a federal judge in Oregon sanctioned two lawyers $110,000, the largest AI hallucination penalty in American legal history, after they submitted 23 fabricated citations and eight invented quotations. The case was subsequently dismissed."
"In Manhattan, a judge ruled recently that a defendant who used a general-purpose AI chatbot to help prepare his case had waived attorney-client privilege. If you type your defense strategy into a chatbot, the government can subpoena it, read it, and use it against you."
"Not all AI is created equal. There is a real difference between general-purpose large language models like ChatGPT and Claude that have been trained on the open web, and industry-specific legal AI tools that are plugged into the same databases lawyers have been using for decades. Unfortunately, Wall Street has struggled to tell the difference."
Lawyers are using artificial intelligence to draft briefs and prepare for court, but failures are occurring. A family in Alabama lost a trust dispute after their lawyer filed citations to cases that do not exist; the Alabama Supreme Court dismissed the appeal, called the conduct egregious, and barred the lawyer from filing again without co-counsel sign-off. In Oregon, a federal judge sanctioned two lawyers $110,000 after fabricated citations and invented quotations were submitted, and the case was later dismissed. In Manhattan, a judge ruled that using a general-purpose AI chatbot to prepare a defense waived attorney-client privilege, allowing the government to subpoena and use the strategy. More than 1,300 global cases have involved court comments on AI hallucinations. General-purpose models differ from legal AI tools connected to established legal databases, but markets have struggled to distinguish them.
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