RECORD FINE FOR AI MISUSE IS NO DETERRENT TO LAWYERS
In what is said to be the highest fine imposed so far in Canada on lawyers who misuse AI, the Alberta Court of Appeal has imposed personal costs of $17,500 + GST on an Alberta lawyer who filed a factum drafted by a contractor that contained “hallucinations”, AI-generated references to non-existent authorities. The court found that counsel’s behaviour constituted “a marked departure from reasonable conduct that seriously interfered with the administration of justice in the circumstances.” So, here’s the rub: nowhere in the judgment or in a related earlier judgment can the offending counsel’s name be found. So how are the sanctions imposed in any way the “deterrent” to similar misconduct they are intended to be? When you think about it, it’s really offensive that by protecting lawyers in this way, courts are giving them the very same protection of anonymity afforded to victims of certain crimes. The lawyer as victim? Now that’s effective advocacy!
LAWYERS PUNISHED MORE HARSHLY THAN ACCOUNTANTS
The Law Society Gazette, citing The Office for Professional Body Anti-Money Laundering Supervision’s annual review of the effectiveness of organizations tasked with preventing financial crime, reports that law firms are being fined up to six times more than accountants for breaching anti-money laundering regulations. While the totality of fines imposed was roughly equal, the average fine for lawyers was much higher. The number of law firm inspections also far exceeded visits to accounting firms. This despite the fact that accountants generally received lower scores than lawyers for enforcement effectiveness. Overall, more than 300 law firms and sole practitioners are classified as high risk because of the work they do. This group constitutes less than 5% of the 7,000 that are covered by AML rules.
LAWYERING IS AN EVIL CAREER
Serious People, a climate change pressure group, has published a book entitled Why Daddy’s Law Firm Works with the Nice Oil Men. The satirical copy is intended to make kids reconsider whether they want careers in the law. The nicest thing the authors say about lawyers is that they don’t make bombs or help sell cigars.
AI-GENERATED DOCS INTENDED FOR DISCUSSIONS WITH COUNSEL: PRIVILEGED OR NOT?
Judge Jed Rakoff of the U.S. District Court for the Southern District of New York has ruled that client-generated AI documents intended to assess legal exposure, intended for use in discussion with counsel, and eventually shared with counsel, are not privileged when they are created outside the direction of counsel. The court reasoned that privilege was waived when the client shared information with a third-party, public-facing AI platform, thereby failing to protect its confidentiality. Barry Leon, an arbitrator and mediator at Toronto’s Arbitration Place, previously a judge of the commercial division of the Eastern Caribbean Supreme Court, and formerly a partner and coordinator of Torys LLP’s litigation and dispute resolution practice, says he hopes that Canadian law will take a pragmatic approach to privilege in the context of today’s realities: “Documents prepared by a client – on a public AI platform like ChatGPT, Gemini, or Meta AI – for the purpose of obtaining legal advice, should be accepted as being
privileged so long as they are kept confidential overall. If the reality is that information on a public
AI platform is in a massive data pool such that it is highly unlikely to be read by anyone in an
identifiable way, as a practical matter isn’t it sufficiently ‘kept confidential’?”
NEW REGIONAL MANAGERS AT DLA PIPER
On the heels of announcing Russel Drew as its new Canada Managing Partner, DLA Piper has appointed two new regional managing partners: Jamie Mandell, who practices in the areas of securities, corporate finance, and M&A will head up the Toronto office, while Michael Mjanes, a real estate, construction, and corporate commercial lawyer will take the lead in Vancouver.