The Abu Dhabi Global Market (ADGM) Court has handed down a detailed costs judgment that also serves as a practical guide for lawyers on the responsible use of artificial intelligence (AI) in litigation.
In a lawsuit arising out of a dispute between Arabyads Holding Ltd (plaintiff) and former employee Gulrez Alam (defendant) (see litigation) [2025] ADGMFI 0032), the court dealt with several costs applications and, crucially, sanctioned the defendant’s former legal representatives for failing to conduct AI-related research that misled and burdened the plaintiff and the court.
In this case, the defendant’s legal representative prepared a 327-paragraph, 233-page argument that required extensive review by the plaintiff’s legal representative based solely on the number of pages submitted. Additionally, the plaintiff’s legal representative found that the authorities in the petition were fictitious, misquoted, or did not support the proposed proposal.
In its judgment, the ADGM Court found, inter alia, that:
- AI research is gaining popularity among legal practitioners. However, it is the duty of legal practitioners to verify the research produced by AI tools. This includes verifying that the authorities cited exist and support the position asserted in the pleadings. Without validating research, legal practitioners risk misleading courts with their submissions. The failure in the case was described as “reckless” and amounted to a breach of the ADGM Court Conduct Rules 2016, exceeding the wasteful expense threshold.
- Despite the legal representative’s explanations of time, fee constraints, and the absence of a UK lawyer, the court found that the lawyer still had a duty to verify the research and should withdraw if unable to act appropriately. Filing a flawed pleading without proper examination was a breach of the duty owed to the court.
- The legal representative’s actions were found to be “unreasonable, if not inappropriate” and the applicant was ordered to pay AED 282,508 in costs for considering the defense, preparing the application hearing, wasted costs and attending the hearing.
The ruling sets clear standards for ADGM and follows a 2025 ruling by the Qatar Financial Center Civil and Commercial Court that dealt with the misuse of AI and citing non-existent case law. The judgment of the Qatar Financial Center Court was related to a citation by a non-existent lawyer that was described as a judgment by the Qatar Financial Center Court (i.e., a “sham lawsuit”).
The rise of AI in disputes is being seen globally, with several cases considering the inappropriate use of AI, including:
- In a 2023 case in the U.S. District Court for the Southern District of New York, lawyers used generative AI for legal research, creating a number of cases that did not exist.
- In 2025, the High Court of England and Wales was required to review the professional obligations of people who use AI in research.
AI is a useful tool, but unvalidated output can be dangerous for experts. Therefore, the obligation remains for those using AI for research purposes to ensure that relevant examples exist and that advanced propositions are supported and properly cited.
