ADGM Court’s Judgment Serves as a Warning Regarding Proper Use of AI
The Abu Dhabi Global Market (ADGM) Court has issued a detailed costs judgment that doubles as a practical guide for lawyers on the responsible use of artificial intelligence (AI) in litigation.
Case Overview
In a dispute between Arabyads Holding Ltd (the Claimant) and former employee Gulrez Alam (the Defendant) (Case reference [2025] ADGMCFI 0032), the court addressed multiple costs applications and sanctioned the Defendant’s former legal representatives for AI-related research failures that misled and burdened both the Claimant and the court.
Judgment Details
The Defendant’s legal representative prepared a defense spanning 327 paragraphs and 233 pages of exhibits, requiring extensive review by the Claimant’s legal team due to the volume of documents submitted. Alarmingly, the Claimant’s representative discovered many authorities cited were fictitious, wrongly cited, or did not support the propositions advanced.
In its judgment, the ADGM Court emphasized several critical points:
- AI research is increasingly popular among legal practitioners; however, it remains the obligation of the legal practitioner to verify any research produced by AI tools.
- This verification includes ensuring that cited authorities exist and support the pleading’s assertions. Failure to verify risks misleading the court.
- The negligence in this case was described as reckless, constituting a breach of the ADGM Court Rules of Conduct 2016 and crossing the threshold for wasted costs.
Consequences for Legal Representatives
Despite explanations related to time constraints, fee limitations, and absence of UK counsel, the court held that lawyers must verify research and withdraw if unable to act competently. Filing a defective pleading without proper verification breaches duties owed to the court.
The legal representative’s conduct was deemed unreasonable, if not improper, resulting in an order to pay AED 282,508 to the Claimant to cover costs for considering the defense, preparing the wasted costs application hearing, and attendance at the hearing.
Global Context
This judgment sets a clear precedent for the ADGM and follows a similar ruling from the Qatar Financial Centre Civil and Commercial Court, which addressed AI misuse and citations of non-existent cases, including a “fake case.”
The rise of AI in legal disputes is a global trend. Significant cases raising concerns about inappropriate AI use include:
- A 2023 case in the US District Court for the Southern District of New York, where lawyers used generative AI for legal research, producing numerous fabricated cases.
- A 2025 examination by the England and Wales High Court concerning the professional duties of those using AI for research.
Conclusion
While AI can be a valuable tool, unverified outputs pose professional risks. It is the obligation of anyone using AI for research to ensure that cases exist, support the propositions advanced, and are correctly cited.
