It is tempting to use generative AI tools like ChatGPT to draft legal emails or review advice. They are fast and articulate. The reality is, using AI to communicate or debate with your lawyer usually has an expensive byproduct: it drives up your legal fees. Because AI tools do not know the difference between actual law and a highly convincing fiction (“AI hallucinations”), the billable time required to untangle errors and explain why an AI-generated response is incorrect will ultimately land on your invoice.

Why do you feel it necessary to consult AI if you have retained a lawyer’s services?

While generative AI tools are evolving, there is a reason you hired a lawyer, and it is important to trust that they have your best interests in mind when building your case.

Bad Lawyering and The Danger of AI “Hallucinations”

Lazy legal professionals have fallen prey to AI hallucinations. Lawyers from different provinces have faced consequences for submitting fake cases to the courts or tribunals:

• In June 2026, the Law Society Tribunal of Ontario ordered a lawyer to pay $31,150 in costs after he filed motions using AI-generated materials containing completely non-existent cases.
• In Ko v. Li, an Ontario lawyer faced contempt proceedings after she initially misled the court about her use of ChatGPT to prepare a factum filled with fake citations.
• In Zhang v. Chen, a British Columbia judge issued a warning about professional accountability after discovering that a lawyer had used fake materials generated by AI. The judge stated, “This case has unfortunately highlighted that generative AI cannot replace the professional expertise required of lawyers in the justice system.”
• In ARIHQ c. Santé Québec, the Quebec Superior Court found that the references and case law cited in the award were either nonexistent or irrelevant due to AI hallucinations. As these references were the only basis for the arbitrator’s legal findings, the Court annulled the arbitrator’s decision.

Technology has not replaced the expertise of human professionals. Competent lawyers do not rely solely on AI-generated responses; they verify them through human judgment. A good lawyer understands that AI is a tool for brainstorming ideas, not an infallible source of truth. If an advanced algorithm can sometimes mislead a professional, it will undoubtedly confuse a client attempting to manage a complicated dispute.

AI May “Invent” Cases or Law

To demonstrate how easily this happens, I recently ran a test with ChatGPT regarding “termination for just cause.” The AI-generated case names and summaries seem flawless, but upon cross-referencing, those cases do not exist:

• Blackwood v. Apex Logistics Inc., 2024 ONCA 412: The Ontario Court of Appeal ruled that a single instance of a senior manager using a personal cloud storage drive to back up company files constituted a fundamental breach of the employment contract, justifying dismissal without notice.
• Milner v. Vanguard Manufacturing Ltd., 2025 ONSC 1883: An Ontario Superior Court decision stating that a 15% drop in an employee’s performance metrics over two consecutive quarters, after being placed on a Performance Improvement Plan (PIP), meets the legal threshold for just-cause termination.
• Chao v. Horizon Health Network, 2023 NBCA 89: New Brunswick Court of Appeal ruled that an employee who was unexcused from three consecutive mandatory team meetings could be terminated for cause under the doctrine of “cumulative insubordination.”

Debating Your Lawyer with AI Drives Up Legal Fees

While using AI to understand general concepts is fine, treating it as an authority on your specific situation can do more harm than good.

Lawyers have strict professional obligations to verify the accuracy of the law they rely on. If you send an AI-generated argument or rule to your lawyer, your lawyer will review your email/documents, and the lawyer must spend valuable time researching the AI’s claims, verifying the cited “rules”, and tracking down non-existent “cases”. You ultimately pay for the billable hours your lawyer spends dismantling AI errors and convincing you why the AI’s legal analysis is wrong or inapplicable.

The Choice is yours:  Trust your lawyer or Trust AI.

Employment Law is Context, Not a General Rule

AI operates on patterns and aggregated data. It looks for the most statistically probable words to answer a prompt, not the nuances of your specific situation. This is particularly dangerous in fields like employment law, where outcomes are highly context-dependent. Factors such as your specific industry, the exact wording of a contract clause, and the subtle dynamics of a workplace incident alter which rules apply. A broad, AI-generated legal summary will frequently miss the critical nuance that dictates whether you win or lose a case.

Trust is an important aspect when it comes to working with a lawyer

Ultimately, you need to work with a lawyer you can trust, and there are certain steps to take to achieve that type of relationship. Hiring an employment lawyer can feel a bit daunting, especially if you’re already dealing with a stressful workplace situation like a layoff, discrimination, or a contract dispute.

Here are a few things to consider before selecting the right employment lawyer.

• Your lawyers’ practice should be dedicated to employment law. Employment law changes rapidly, and you want someone immersed in it.
• No case is ever guaranteed, so if they promise you it is, be wary. They should be honest about the risks and present you with a balanced review of your case.
• Ensure you have a primary point of contact committed to a clear timeline for the litigation.
• Choose the firm you trust.

Final Thoughts

AI is a powerful tool for brainstorming, but it is not a lawyer. It lacks accountability and localized expertise. To keep your legal costs down and your case on track, rely on human expertise rather than automated guesswork.

Artificial Intelligence has quickly evolved. However, use of AI tools in the workplace can have profound consequences. Use in the workplace is not risk-free. In addition to potential copyright infringement and other privacy concerns, “hallucinating” AI where the tool makes up nonexistent information is a major issue. There are several instances where lawyers in both Canada and the U.S. were reprimanded for use of AI. In Canada, a lawyer submitted court documents containing fake legal cases generated by an AI tool. This happened again in September of 2025. In both cases, legal documents were created using AI tools and included made-up citations to non-existent cases.

Misuse of AI in the workplace could set a dangerous precedent.

The message for employers is clear: when AI is deployed in the workplace, there are potentially serious trust and legal issues – particularly if there are no guidelines in place. In Ontario, even though there is no single “AI law” at this time, employers must still think about privacy and employment law implications.

The Legal and Regulatory Landscape in Ontario & Canada

At the federal level, the Personal Information Protection and Electronic Documents Act (“PIPEDA”) governs how private-sector organizations collect, use, and disclose personal information in the course of commercial activities. PIPEDA also applies to the personal information of employees of federally regulated businesses.

The federal government has also introduced the Artificial Intelligence and Data Act, which is expected to impose obligations on certain high-impact AI systems.

BC, Alberta, and Quebec have stand-alone private-sector privacy laws. However, Ontario does not, which means Ontario employers rely on PIPEDA and common law concerning privacy.

Regarding AI in the workplace, starting January 1, 2026, employers in Ontario must disclose the use of AI in their public job postings, in accordance with the Employment Standards Act, 2000. However, that is the extent of the current regulations related to the use of AI.

For the public sector (government institutions) in Ontario, the Freedom of Information and Protection of Privacy Act applies, and the government has also issued an AI “Responsible Use” directive for ministries/agencies.

Key Risks for Employers to Consider

Despite not having standalone regulations related to privacy and a lack of regulations related to AI, employers should consider stringent policies within the workplace. AI is no longer a “novelty” in many industries. It has become a necessity. As such, the legal landscape is shifting. For employers, this means significant liability if it should be misused. Properly drafted policies related to use of AI, while ahead of their time, will ensure employers avoid potential risks and costly litigation related to misuse of AI.

Here are the primary risks employers should be aware of:

The hallucination trap: Accuracy and reliability

The biggest risk with workplace AI is content accuracy. AI models are designed to be fluid and persuasive, not necessarily factual. AI “hallucinations” – instances where the tool generates plausible but entirely fabricated information – can lead to dangerous safety oversights or catastrophic professional errors. In addition to the cases mentioned above, there are documented instances where AI provides incorrect information that is, in some cases, dangerous to users. The reality is, “AI wrote it” will not stand up as a defense in court.

Collection, use, and disclosure of personal information

AI tools collect vast amounts of data (inputs) and draw inferences (outputs) about individuals. Consider that every prompt entered by an employee could be training a third-party model, leading to accidental leaks. The collection, use, and disclosure of personal information via AI tools often bypasses traditional privacy safeguards. Employers should ensure the deployment of AI in compliance with the applicable privacy legislation.

Algorithmic bias in recruitment, selection and performance

In addition to the job posting disclosure requirement mentioned above, employers should also consider the potential risk of human rights claims. Consider that AI is learns from human behaviour – including bias. Therefore, it wouldn’t necessarily eliminate bias but amplify it. Training an AI tool based on historical data that reflects past prejudices will likely systematically disadvantage protected classes under the Ontario Human Rights Code. Bias is a liability for employers. AI-driven decisions still require human oversight to avoid the risk of costly human rights claims.

Employee monitoring & surveillance

Monitoring that is overly intrusive, lacks transparency, or creeps into private spaces can trigger privacy complaints and lower employee morale. If an employer uses AI to monitor employee behaviour (for example: keystroke tracking, sentiment analysis of internal chats, location tracking), ensure the monitoring is reasonable, proportionate and transparently communicated.

Recommendations For AI Use in the Workplace

To mitigate liability and protect the organization’s reputation, move beyond “best guesses” and implement these core recommendations:

1. Human verification: Never treat AI output as a finished product. If employees rely on generative tools, human oversight is mandatory. Implement a strict review process to verify facts, eliminate “hallucinations,” and ensure technical accuracy before any output is finalized or shared.
2. Algorithmic transparency: Employers must be able to explain how an AI-assisted decision was reached. Build a clear pathway for challenge and correction so employees or candidates can contest automated outcomes. Transparency is the best defense against claims of systemic bias or discrimination.
3. Data minimization & hygiene: Treat data as a liability, not just an asset. Use AI only for defined, legitimate business objectives. Prohibit the entry of sensitive personal information or proprietary “trade secret” data into public AI feeds. Lastly, restrict data access to only those who require it for their specific roles.
4. Policy evolution: Engage legal counsel to draft or revise current policies on privacy and monitoring, remote work agreements, and acceptable use of AI.