The first paragraph of a recent Ontario Superior Court decision reads as follows:
This decision may involve the next generation of AI hallucinations. In this case, counsel delivered a factum that cited real cases with correct neutral citations to CanLII. But then counsel added quotations from the cases. The quotations do not exist in the cases. The quotations are fake.
So, back to the question.
Can counsel who files such a factum find themselves subject to a Court referral to the law society for discipline or to the AG for contempt?
In Ontario at least, the answers seems to be yes to both.
We start with the recent decision in Kapahi Real Estate Inc. v. Elite Real Estate Club of Toronto Inc., 2026 ONSC 1438.
In Kapahi, the Court determined that the factum contained seven instances of cases that were properly cited but the quotations purportedly taken from those decisions were made up. The five properly cited decisions included one from the Supreme Court of Canada and three from the Ontario Court of Appeal. The following from the decision sheds light on the Court’s concerns, especially in light of counsel’s response to the made-up quotations:
[38] The most obvious explanation for these fake quotations is that counsel used AI to draft the factum. But I am not making that finding, as I have not had the benefit of full submissions on this issue. But, hypothetically, counsel might have checked each case cited to ensure that it was a real case but failed to read the cases to look for the quotations that AI hallucinated. That would at least make some sense of the issue.
[39] But [counsel] says that he “did not use or rely artificial intelligence or other such tools in preparing the reply factum.” Rather, he attributes the false quotations to “a lack of due care” and “human errors” for which he takes full responsibility. He says the errors arose from his “misreading the cases cited”, “carelessness” and “inadvertence.” He says he sincerely and deeply regrets his errors and notes that he is a sole practitioner who is relatively new to the bar.
[40] Try as I might, I do not understand [counsel’s] response. If he did not use AI, how did he come to make up seven paragraphs and call them quotations from real cases? If I accept that [counsel] did not use AI for research or drafting, I am at a loss for how these quotations could be a result of human error, a lack of due care, misreading the cases cited, carelessness, or inadvertence as stated by [counsel].
[41] I do not understand how one can make up a quotation that supports the argument in a factum by misreading a case or being careless. The only way I can understand [counsel] having made up seven distinct quotations is if he believes that counsel is allowed to make up law in his factum. Perhaps doing it once could be some kind of slip or error that mistakenly found its way into the factum. But not seven times.
[43] But that leaves me in a quandary. Either [counsel] used AI and has been untruthful about it, or he made up seven fake paragraphs and chose to present them as actual quotations from precedent cases.
[50] In my view, on these facts, the best outcome to determine if there has been either use of AI hallucinations or deliberate falsification of law is for those with the authority to investigate to be left to do so. It will be up to the authorities to decide if charges of one type or another should be brought.
[51] I will be referring this decision to the Law Society of Ontario for its consideration.
Clearly the Court in Kapahi had some doubt about the explanation counsel provided.
Turning to the question of a contempt referral, the Court in Kapahi referred to Ko v Li, 2025 ONSC 6785 (CanLII). We previously referred to the initial decision in Ko v. Li, 2025 ONSC 2766 in our 2024 annual report, in particular the Court’s comments on a lawyer’s duty to not mislead the Court by submitting case authorities that do not exist. In that decision, the Court ordered counsel to show cause why she should not be held in contempt.
The contempt referral is a continuation of the Court responding to counsel’s conduct, specifically since counsel admitted making untruthful and misleading statements to the court. To get the full tenor of the Court’s thoughts on contempt and its ultimate decision to refer the matter to the AG, read the decisions at Ko v. Li, 2025 ONSC 2965 and Ko. v. Li, 2026 ONSC 6785.
Ultimately, the issues in Kapahi and Ko come down to counsel not reading decisions they cited in their entirety. In the old days, the only place you could find decisions was in the reporting books and you had no choice but to read the entire decision. Nowadays we search online and use various tools. And though we recognize that when using these tools you might only get excerpts of decisions and commentary – a function of the output corresponding to the search parameters – at some point in the research and drafting chain of events, someone has to read the materials being cited in their entirety to confirm the output is in fact correct, and real. If you are going to use AI to assist with your drafting, you must apply an appropriate levy of diligence to reviewing the output. Which is to say read it. The Courts expect nothing less.