Practice Note SC Gen 23, issued by the Chief Justice of New South Wales, Australia, on 21 November 2024 and revised on 28 January 2025 (NSW Practice Note), together with Guidelines for New South Wales Judges, provides prescriptive rules on the use of generative artificial intelligence (Gen AI) in the New South Wales courts.[1][2] The NSW Practice Note is comprehensive, covering the use of Gen AI in various legal contexts, including affidavits, expert reports and written submissions. It emphasises the need for verification of Gen AI content and provides conditions for its use in generating affidavits, witness statements or other evidentiary material including satisfaction that the information:

• Will remain within the controlled environment of the technological platform being used and that the platform is the subject of confidentiality restrictions on the supplier of the relevant technology or functionality to ensure that the data is not made publicly available and is not used to train any large language models;
• Is to be used only in connection with that proceeding (unless otherwise required or permitted by law to be disclosed or required to be reviewed by a law enforcement agency for policy purposes); and
• Is not used to train the Gen AI program and/or any large language model.[3]

Currently, the use of Gen AI to draft or prepare expert reports is prohibited without obtaining court approval.[4]

The NSW Practice Note defines Gen AI as a form of artificial intelligence capable of creating new content, based on patterns and data acquired from a body of training material.[5] Gen AI can take the form of generic large language model programs, as well as more bespoke programs specifically directed to lawyers.[6] The NSW Practice Note specifies that Gen AI does not include technology that merely corrects spelling or grammar, provides transcription or translation, assists with formatting, or otherwise does not generate substantive content.[7] It also does not include search engines that produce a list of websites[8] or dedicated legal research software that searches across legal materials.[9]

For expert reports, the NSW Practice Note establishes some of the most cautious and conservative requirements globally, mandating prescriptive court leave and disclosure for the use of Gen AI including:

1. Overarching prohibition of Gen AI – Gen AI cannot be used to draft or prepare expert report content without prior court approval.[10]
2. Leave requirements – Experts wishing to use Gen AI must apply for leave, detailing the proposed use, program, version, closed-source/open-source details, confidentiality settings, expected benefits to be derived, and documents proposed to be submitted to the Gen AI program.[11]
3. Disclosure and record-keeping requirements – If granted leave, experts must disclose which parts of the report were prepared using Gen AI and identify the program and version used. Experts must also keep records of how the Gen AI tool was used, including prompts, default values and variable sets, unless the court waives this requirement; and if the Gen AI tool is regulated or addressed by any relevant code of practice or principles, these details must be identified and annexed to the report.[12]
4. Implications for lawyers – Legal practitioners, including unrepresented parties, must inform experts of these requirements when instructing them to ensure compliance.[13]
5. Timing – The NSW Practice Note is set to commence on 3 February 2025; however, expert reports prepared before its commencement must disclose any reliance on Gen AI.[14]

Whilst it is clear there is need for Gen AI regulation, the question remains whether the NSW Practice Note’s leave and disclosure requirements for expert reports strike an appropriate balance between the potential efficiencies and innovation generated by Gen AI and its limitations and risks.

Leave and Disclosure Requirements

Global courts are actively monitoring the use of Gen AI and as a result issuing guidelines and practice notes to ensure its responsible use in legal proceedings. Below is a table summarising some of the current global guidance on Gen AI use in court systems and their position in respect of court leave and disclosure:

Whilst all the above jurisdictions emphasise the importance of accuracy and verification of content generated by Gen AI, a key difference between the NSW Practice Note and other guidelines is the necessity of experts to obtain court leave prior to using Gen AI, and then subsequent disclosure requirements.

A relevant, although not unique, example of the risks of unchecked Gen AI occurred in the District Court of New York in the case of Mata v. Avianca, Inc.[22] The case drew worldwide attention to the risk of relying on Gen AI for research purposes in litigation without independent verification. In that case, attorneys for the plaintiff relied on Gen AI to prepare legal submissions that referred to nonexistent cases.[23] The court’s judgment relevantly stated:

Many harms flow from the submission of fake opinions. The opposing party wastes time and money in exposing the deception. The Court's time is taken from other important endeavours. The client may be deprived of arguments based on authentic judicial precedents. There is potential harm to the reputation of judges and courts whose names are falsely invoked as authors of the bogus opinions and to the reputation of a party attributed with fictional conduct. It promotes cynicism about the legal profession and the American judicial system. And a future litigant may be tempted to defy a judicial ruling by disingenuously claiming doubt about its authenticity (emphasis added).[24]

The Federal Circuit and Family Law Court of Australia experienced a similar scenario in July 2024, when a Melbourne lawyer used Gen AI software that generated false case citations that were submitted to the court.[25] The lawyer failed to verify the accuracy of the information before submitting it to the court, ultimately resulting in an adjourned hearing and waste of the court's time and resources. In this case, the Judge referred to the duties of the solicitor before her, relevantly:

(a) The paramount duty to the court and to the administration of justice, which includes a specific duty not to deceive or knowingly or recklessly mislead the court;

(b) Other fundamental ethical duties, including to deliver legal services competently and diligently; and

(c) To not engage in conduct which is likely to diminish public confidence in the administration of justice or bring the legal profession into disrepute (emphasis added).[26]

The lawyer responsible was referred to the Victorian Legal Services Board to determine if there should be any further investigation or action taken in respect of their conduct as a matter of public interest, given the increasing use of Gen AI tools by legal practitioners in litigation more generally.[27]

In both cases, the accuracy of the Gen AI output was not verified, highlighting a need for Gen AI guidance. Under the NSW Practice Note, this would now be in direct contravention of Paragraph 17, which requires verification of written submissions and the like, stipulating that output cannot be solely verified using a Gen AI tool.

Potential Benefits and Drawbacks of the NSW Practice Note

In the evolving landscape of legal technology, the integration of Gen AI tools, alongside leave and disclosure obligations, presents both significant opportunities and notable challenges. Below is a summary of the potential benefits and drawbacks of utilising Gen AI under the new leave and disclosure requirements in NSW legal proceedings moving forward.

Potential Benefits of Using Gen AI

• Efficiency and cost savings – The NSW Practice Note may lead to discussions and considerations up front that make the court process more efficient and transparent.
• Educational opportunity – The NSW Practice Note presents a unique opportunity to educate legal professionals, the courts and others involved in the dispute process about Gen AI’s reliability and benefits. Positive experiences may pave the way for smoother use of Gen AI in future cases.
• Expert report defensibility – The NSW Practice Note has the effect (when leave is obtained) of disclosing what part(s) of an expert report were prepared using Gen AI, strengthening the defensibility of the process used by an expert when forming their opinion.
• Transparency and good faith – Requesting leave and disclosing Gen AI use demonstrates transparency, fosters trust between parties and the court, and shows a good-faith commitment to complying with professional and ethical obligations in the administration of justice.
• Confidentiality upheld – The NSW Practice Note leads to the profession correctly considering confidentiality issues and using Gen AI controlled environment tools.

Potential Drawbacks of Using Gen AI

• Completeness concerns – Questions about whether Gen AI can sufficiently identify all relevant information may arise and bring questions regarding the completeness of documents filed in a proceeding.
• Increased costs – Investment in complex Gen AI technology, development of processes and procedures, and manual review of Gen AI output may require significant time, adding to litigation costs.
• Strategic disadvantage – General discussion around Gen AI and its use in specific legal proceedings may inadvertently reveal litigation strategies, areas of focus, or legal work product, and this may be exploited by opposing counsel.

Without a doubt, use of Gen AI tools involves a careful assessment of several factors in the specific context of the case. While the NSW Practice Note may increase transparency and streamline the process, it may also open the door to challenges that could complicate and prolong litigation unnecessarily.

An Alternative Approach for Expert Reports

The current expert report requirements outlined in the NSW Practice Note are conservative. For now, Gen AI must not be used to draft or prepare expert reports without court approval, and if obtained, significant and detailed disclosure is required.

An alternative approach could be to extend the recent amendments to the practice note, to expert reports, including a declaration or certification, stating that the information:

1. Has remained within a controlled environment that is subject to confidentiality restrictions;
2. Has been used only in connection with that proceeding; and
3. Has not been used to train the Gen AI program and/or any large language models.

This could be accompanied by assurances that all Gen AI-generated content has been thoroughly fact-checked and that the expert's opinions remain independent and free from any Gen AI bias. This approach aligns with the emphasis on transparency, accountability and the verification of AI-generated content seen in global jurisdictions.

Other Thoughts

The industry could also draw lessons from the increased acceptance of technology assisted review (TAR) in legal proceedings, which has been facilitated in the past by implementing suitable safeguards and disclosure practices. As TAR has evolved, it has demonstrated how technology can be effectively integrated into legal processes with proper oversight. By applying similar principles to Gen AI, such as ensuring transparency and accountability, the expert profession may be able to foster greater trust and acceptance of Gen AI tools in the courts.

Relevantly, newer generations of Gen AI are becoming less of a "black box" as they increasingly provide information on their data sources, making it easier to verify the content they generate. This transparency could lead to a more widespread acceptance of Gen AI, as it facilitates the ability to verify Gen AI output.

Conclusion

Undoubtedly, Gen AI is set to revolutionise the legal and expert professions. As with any innovation, there is an opportunity for courts to collaborate with the diverse professionals involved in dispute resolution, including expert witnesses, to explore how Gen AI can enhance the cost-effectiveness and efficiency of dispute resolution while maintaining its fairness and accuracy. Gen AI and its complexities are evolving rapidly.  The issuance of an update to the NSW Practice Note only two months after it was first issued highlights the speed of Gen AI progression and how courts, legal practitioners and others involved in the dispute process are adapting and evolving to keep up. We look forward to the ongoing reviews and updates of the NSW Practice Note and similar guidance on the use of Gen AI in courts around the world as this fascinating aspect of dispute resolution continues to develop.

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