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Decided Judgment Hallucinated Citations Alberta
An appeal factum, prepared by a third-party contractor using a large language model, contained seven fabricated case citations. The Court of Appeal held that the lawyer of record bears ultimate responsibility for filed materials regardless of who drafted them. A follow-on decision (2026 ABCA 20) imposed CA$17,550 in personal costs — the first appellate personal costs award for AI hallucination in Canada.
Court Court of Appeal of Alberta
Citation 2025 ABCA 322
Jurisdiction Alberta
Decided
Parties Plaintiff / Applicant: Reddy
Defendant / Respondent: Parminder Saroya

AI context

AI system: Large language model (specific product not confirmed)

A third-party contractor engaged by appellant's counsel used an LLM to draft the appeal factum. Seven non-existent cases were cited without verification by the signing lawyer.

Significance

First Canadian appellate decision addressing AI hallucinations. Established that the lawyer of record bears ultimate responsibility for filed materials regardless of who drafted them, including third-party contractors using AI. First appellate personal costs award for AI hallucination.

Outcome

Costs Award

CA$17,550 in personal costs imposed against lead counsel (2026 ABCA 20). First appellate personal costs award for AI hallucination in Canada. Court held that lawyer of record bears ultimate responsibility for filed materials regardless of who drafted them.

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Sources

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