CAAA: AI Raises Concerns in Workers' Comp System

Wednesday, September 17, 2025 | 0

The rise of artificial intelligence in the legal field is beginning to make waves in California’s workers’ compensation system.

As with other areas of law, the use of AI can be helpful in assisting with streamlining tasks like grammar, drafting summaries or reviewing lengthy medical records. However, like all programs, it is not perfect, and recent cases have shown a propensity for some AI programs to generate errors and even fabricate nonexistent case law. These so-called AI “hallucinations” have already led to sanctions in multiple jurisdictions, raising concerns about reliability and ethics when AI-generated content finds its way into court filings.

A recent California case, John Richard Sedano vs. Live Action General Engineering Inc., illustrates the risks. The Workers’ Compensation Appeals Board sanctioned a law firm after its petition contained fabricated citations, irrelevant arguments and mischaracterized issues. The board did not make a specific finding of the use of AI, but the judge did state that the “formatting, syntax and nature of the errors” in the document were highly suggestive of AI-generated content.

Although the firm quickly acknowledged the mistakes, apologized and implemented safeguards, the case underscores how quickly an attorney or firm’s credibility can be undermined when technology is used inappropriately.

In cases around the country, courts have sanctioned attorneys and pro per litigants for submitting filings that include nonexistent cases or inaccurate citations produced by AI. A firm on the defense side noted that some applicants representing themselves are increasingly relying on AI tools to prepare documents, leading to confusion and wasted court resources.

Although new detection programs can flag AI-generated text and check citations, the broader challenge remains: ensuring that technology supports, rather than undermines, the fair administration of justice.

For California applicants’ attorneys, the implications are twofold. First, we must be aware of the risks of AI misuse, both to protect the credibility of our filings and to guard against defense attempts to discredit legitimate arguments by associating them with “AI errors.”

Second, this issue highlights the need for continued education, ethical guidance and careful advocacy in workers’ compensation practice. While AI can offer efficiencies in reviewing medical records or drafting preliminary notes, the responsibility lies with attorneys to ensure that what reaches the court is accurate, reliable and firmly grounded in California law, safeguarding both our clients and the integrity of the system.

This opinion by the California Applicants' Attorneys Association communications team is republished, with permission, from the CAAA website.