Source: Australian Financial Review

A Federal Circuit Court judge warned that a worker's use of artificial intelligence in a dismissal claim was "perilously close" to contempt of court. The warning followed findings that a claimant's chatbot cited large swaths of evidence that did not exist, and the court described the episode as a "cautionary tale about the dangers of befriending AI-powered chatbots who masquerade as legal advisers". The case involved a delivery driver who relied on generative AI (GenAI) in his dismissal action against auto parts store Sterling Parts, and the court said that reliance had ruined his dismissal case.

The judge said the worker's use of GenAI exposed him to potential penalties, noting he was at risk of fines and imprisonment. The Federal Circuit Court observed the chatbot had "hallucinated" dozens of items of evidence, illustrating concerns about AI's sycophantic tendencies and its impact on workplace dispute resolution. No final disciplinary, criminal, or other conclusive outcome is reported in the extracted text, and the matter is presented as an example of how generative AI misuse can compromise legal claims. The report is dated 5 July 2026.