Artificial Intelligence
The High Court has recently heard one of the first cases involving the use of Artificial Intelligence (AI) tools, such as Chat GPT, to generate information for a legal case.
In the case, a taxpayer disposed of a property and failed to notify her liability to Capital Gains Tax (CGT). HMRC issued her with a 'failure to notify' penalty of £3,265.11. She appealed the penalty on the basis that she had a reasonable excuse, because of her mental health condition and/or because it was reasonable for her to be ignorant of the law.
In a written document the taxpayer provided the Tribunal with the names, dates and summaries of nine First-tier Tribunal (FTT) decisions in which she had been successful in showing that a reasonable excuse existed. However, none of those authorities were genuine; they had instead been generated by AI.
The Court accepted that the taxpayer had been unaware that the AI cases were not genuine and that she did not know how to check their validity by using the FTT website or other legal websites. In deciding her appeal, the Court found that she did not have a reasonable excuse and dismissed her appeal and upheld the penalty.
Interestingly, in coming to that decision, the Court did not take into account the reliance on the AI cases. In other words, the decision would have been the same if the taxpayer had not provided the cases in her response. Nevertheless, providing authorities which are not genuine and asking a court or tribunal to rely on them is a serious and important issue.
On the matter of the fictitious cases, the Court said: 'We acknowledge that providing fictitious cases in reasonable excuse tax appeals is likely to have less impact on the outcome than in many other types of litigation, both because the law on reasonable excuse is well settled, and because the task of a Tribunal is to consider how that law applies to the particular facts of each appellant's case.
'But that does not mean that citing invented judgments is harmless. It causes the Tribunal and HMRC to waste time and public money, and this reduces the resources available to progress the cases of other Court users who are waiting for their appeals to be determined.'
The moral of the story? Maybe appointing a suitably qualified professional to assist, rather than trying to rely on the internet would have been the best course of action. This case will not be the last to consider the use of AI in the legal arena.
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