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ARTICLE · 17 AUGUST 2025

"Free" Generative AI: Managing The Hidden Costs By Improving AI Literacy

Carroll & O'Dea
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This case demonstrates the critical need to improve AI literacy in any organisation about the inputs and the generative AI solution.

AustraliaTechnology
Yue Lucy Han
Yue Lucy Han
Selwyn Black
Selwyn Black
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What can you or your organisation learn from the reported case of a Sydney lawyer who submitted court documents that contained fictitious cases and quotes generated by hallucinating AI? i

Board directors, senior management, and key decision makers in almost every organisation have the legal obligation to act diligently, competently, and in the interest of the applicable stakeholders. To meet that obligation, if they are going to use AI, they will need AI literacy or lots of luck!

Made Up Laws: Fictitious Cases and Fictitious Quotes

What did the lawyer do?

The lawyer represented an individual seeking judicial review of a tribunal decision to refuse the individual's visa application. The lawyer filed documents with the Court (an amended application and an outline of the lawyer's submissions) which cited fictitious cases and fictitious quotes from the Tribunal. When the Minister's lawyers brought the false cases and quotes to the Court's attention, the lawyer

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