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How courts are coping with a flood of AI-generated lawsuits

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Why This Matters

Courts are increasingly confronting the legal implications of AI-generated content, especially in the context of legal advice and confidentiality. These rulings highlight the challenges and uncertainties surrounding AI's role in legal proceedings and its impact on privacy, liability, and professional standards. As AI tools become more integrated into legal processes, the industry must navigate new ethical and legal boundaries to protect consumers and ensure fair practices.

Key Takeaways

Courts are starting to grapple with this question. In February, a federal court in Michigan ruled that a self-represented person’s conversations with ChatGPT to prepare her case were work product—legal work that is shielded from the opposing side.

The decision came on the same day a federal court in New York held that documents a criminal defendant had generated using Claude were not privileged attorney-client conversations or work product. The court argued that Claude is not an attorney and that a user has no “reasonable expectation of confidentiality in his communication” with it because AI companies can disclose user data to third parties.

In March, Judge Braswell ruled that a self-represented person’s use of a chatbot should stay off limits. “It is true that AI systems like ChatGPT, Claude, Gemini, and others … collect user data for training and other purposes. But … that does not eliminate all expectations of privacy,” she wrote. Courts have since remained split on the issue.

Malpractice without a pulse

Some judges are also wondering whether a chatbot, like a lawyer, has a duty to provide good legal advice. Judge Allison Goddard, a federal magistrate judge in California, has noticed that people without lawyers often get the wrong advice from ChatGPT when trying to assess the value of their case during settlement negotiations. In one case, a plaintiff who slipped and fell in a store asked for $700,000 from the store, which was wildly more than the case was worth.

“Where are you getting the idea that you’re getting $700,000? Did you go to ChatGPT?” Judge Goddard asked. “Well …” the plaintiff mumbled. She then walked the person through the law to explain why ChatGPT was wrong and suggested a lower amount. “It’s like Dr. Google went to law school,” she says.

Then there’s the question of who’s liable when a chatbot makes such mistakes. In March, Nippon Life Insurance Company sued OpenAI alleging that ChatGPT practiced law without a license and helped a woman reopen a lawsuit that was already settled, flooding the court with frivolous filings. “ChatGPT is not an attorney,” the lawsuit said.

In May, OpenAI asked the court to dismiss the case, arguing that ChatGPT does not practice law. “ChatGPT is not a person and neither has nor uses any degree of legal ​knowledge or skill,” OpenAI said in its filing. The case is still pending before the court.

States have started to weigh legislation that would hold AI companies liable when their chatbots offer bad legal advice. New York introduced a bill in March that would bar chatbots from impersonating lawyers, even if they notify ​users that they are interacting with chatbots. In Congress, a series of bills have been proposed to ban chatbots from posing as lawyers, doctors, and other licensed professionals. The bills have yet to gain traction.

For now, people will continue turning to AI to be their lawyer. For many of them, the rewards outweigh the risks. Not long ago, when Judge Braswell asked self-represented litigants why they wanted a particular piece of evidence, they mumbled timidly. Now, they answer her questions confidently, having rehearsed with a chatbot.

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