Invented Judgments, Real Consequences: AI Is No Substitute for Legal Review

What should companies expect when AI is used in handling their employment litigation? Above all, that legal review is not replaced by a text that merely sounds convincing. A decision of the German Federal Labour Court (Bundesarbeitsgericht, BAG, decision of 30 September 2026 – 2 AZN 339/26) illustrates how serious the consequences of inadequate scrutiny can be. A complaint against the refusal of leave to appeal contained numerous references to court decisions that either did not exist or had been inaccurately described. The BAG was satisfied that the submission had not been prepared by the claimant’s counsel and that he had signed and filed it without reviewing it. The complaint therefore failed at the first hurdle: admissibility.

AI-assisted drafts can provide a starting point for legal work. However, whether the cited decisions actually exist, are relevant to the specific case and support the arguments advanced must be checked separately. A text that reads coherently should not be mistaken for a legally sound analysis.

In relation to the conduct of litigation by counsel, the BAG reaffirmed an established principle: a lawyer may use a submission prepared by someone else, but must review it independently and assume full responsibility for it. The lawyer’s signature is generally sufficient evidence of this. The position is different where the circumstances leave no doubt that no such review has taken place.

The claimant sought leave to appeal to the BAG against a judgment of the Baden-Württemberg Regional Labour Court. Her lawyer signed the complaint against the refusal of leave to appeal and submitted it to the BAG. The submission differed in its formal presentation from the lawyer’s other written submissions. Its substantive shortcomings were also decisive: it cited numerous court decisions that either did not exist or were said to contain findings they had not made (so-called “hallucinations”). These errors should have been identified during a diligent review by counsel.

The BAG dismissed the complaint as inadmissible. The Court was satisfied that the grounds for the complaint had not been prepared by the lawyer who signed the submission and that he had filed it without reviewing it. In these circumstances, the lawyer’s signature was insufficient to meet the requirement for representation by counsel before the BAG. A subsequent statement by the lawyer did not remedy the defect. To the extent that he sought, through that statement, to adopt the grounds as his own for the first time with legal effect, the deadline for submitting the grounds had already expired.

The decision does not prohibit the use of AI. Nor does it conclusively establish who prepared the text or which tool was used. Rather, the focus is on the lawyer’s independent review and personal professional responsibility. The invented and inaccurately described decisions were particularly clear indicators that such a review had not taken place.

The decision is not an argument against using AI in legal advice. Rather, it makes clear that an independent review by counsel remains essential, including where drafts are prepared by third parties or with AI assistance.

For companies, this means that the quality of legal advice is determined not by the use of a particular tool, but by the professional judgement and responsibility brought to bear on its output. The dividing line is therefore not between advice with and without AI, but between arguments that have been checked and text adopted without review. AI and qualified legal advice are not mutually exclusive. AI can provide valuable support in research, analysis and drafting. However, a “human in the loop” must do more than give final approval: verifying sources, critically examining arguments and assessing the legal implications of the results are not mere quality checks, but the core of a lawyer’s work. Tasks can be delegated to AI – responsibility for the outcome remains with the human adviser.