Law Firm Escapes Sanctions Over AI-Generated Legal Errors in Bankruptcy Case
Gordon Rees Scully Mansukhani avoided formal sanctions in a Chapter 11 bankruptcy case involving Jackson Hospital & Clinic, despite submitting court filings with fabricated AI-generated legal citations. U.S. Bankruptcy Judge Christopher Hawkins noted the firm took corrective measures, including reimbursing over $55,000 in attorneys' fees and implementing mandatory cite-checking for AI-assisted work.
While the firm escaped penalties, attorney Cassie Preston received an official reprimand for her role in the flawed submissions. Judge Hawkins deemed her conduct an abuse of the bankruptcy process, despite her cited personal difficulties at the time.
The ruling highlights growing judicial scrutiny of AI-generated legal work, with courts treating fabricated citations as serious ethical breaches. Firms are now under pressure to establish safeguards when leveraging generative AI tools in legal practice.
