AI hallucinated citations have been used in a UK tax case. The headnotes promise a wild ride “appellant relied on case law which could not be found on any legal website – whether cases generated by artificial intelligence such as ChatGPT – yes, case law invented and not genuine”. But the facts show insight in to how LLMs operate.

1. The LLM has provided case summaries that relate to two arguments of the applicant: ignorance of law, and mental health. At first glance they look reasonable

Ignorance of the law case.

 

Four of the cases in the Response dealt with ignorance of the law; they are set out belowverbatim:

“In the case of ‘David Perrin v HMRC’ (2019), the taxpayer, David Perrin, successfully appealed against a penalty charge for failing to notify HMRC of his liability to pay tax. Mr. Perrin argued that he was unaware of his obligation to notify HMRC and that the penalty charge was therefore unfair. The First-tier Tribunal (Tax Chamber) found in favor of Mr. Perrin, stating that his ignorance of the law constituted a reasonable excuse for the failure to notify HMRC’.

‘Jewell v HMRC’ (2016): The taxpayer successfully appealed against a penalty for late filing of a tax return on the basis of a lack of knowledge of the requirements to file. The taxpayer argued that they had not been aware of the requirement to file a tax return as they had not received any correspondence from HMRC. The First-tier Tribunal (Tax Chamber) found in their favor.

‘McMullen v HMRC’ (2018): The taxpayer successfully appealed against a penalty for late filing of a tax return on the basis of ignorance of the law requirements. The taxpayer argued that they had not been aware of the requirement to file a tax return as they had not received any correspondence from HMRC. The First-tier Tribunal (Tax Chamber) found in their favor.

‘Milner v HMRC’ (2020): The taxpayer successfully appealed against a penalty for late filing of a tax return on the basis of ignorance of the law requirements. The taxpayer argued that they had not been aware of the requirement to file a tax return as they had not received any correspondence from HMRC. The First-tier Tribunal (Tax Chamber) found in their favour.”

2. Mental health cases

The mental health cases

Five of the cases in the Response concerned mental health; they are set out belowverbatim.

“‘Smith v HMRC’ (2021): The taxpayer successfully appealed against a penalty for late filing of a tax return on the basis of mental health issues. The taxpayer argued that their mental health condition, combined with other factors, had made it impossible for them to submit the return on time. The First-tier Tribunal (Tax Chamber) found in their favor.’

‘Oyesanya v HMRC’ (2020): In this case, the taxpayer successfully appealed against a penalty for late filing of a tax return. The taxpayer argued that they had a reasonable excuse for the late filing due to their mental health condition, which had prevented them from being able to manage their affairs effectively. The First-tier Tribunal (Tax Chamber) found in their favor.

‘Baker v HMRC’ (2020): The taxpayer successfully appealed against a penalty for late filing of a tax return on the basis of mental health issues. The taxpayer argued that their mental health condition, combined with other factors, had made it impossible for them to submit the return on time. The First-tier Tribunal (Tax Chamber) found in their favor.

‘Acheson v HMRC’ (2021): In this case, the taxpayer successfully appealed against a penalty for late filing of a tax return. The taxpayer argued that they had a reasonable excuse for the late filing due to their mental health condition, which had prevented them from being able to manage their affairs effectively. The First-tier Tribunal (Tax Chamber) found in their favor.

‘Talal v HMRC’ (2019): In this case, the taxpayer successfully appealed against a penalty for late filing of a tax return. The taxpayer argued that they had a reasonable excuse for the late filing due to their mental health condition, which had prevented them from being able to manage their affairs effectively. The First-tier Tribunal (Tax Chamber) found in their favor.”

3. Part of the reason the cases look convincing is that the names and circumstances are very similar to real cases.

Ms Man did however note that:

 

(1) the case of “Baker v HMRC (2020)” had similarities withRichard Baker v HMRC[2018] UKFTT 0763 (TC) (“Richard Baker“), in which a Mr Richard Baker appealed on the basis that his depression constituted a reasonable excuse. However, not only was the year different, but Mr Richard Baker lost his appeal; and

 

(2) the appellant in “David Perrin (2019)” had the same surname as the appellant inChristine Perrin,but the latter case was heard by the FTT in 2017 and by the Upper Tribunal (“UT”) in 2018, and Mrs Perrin had lost at both the FTT and the UT.

4. Indeed, the surnames and facts are closely inspired by real cases. They echo real names, facts and headnotes, even though they are not the originals. It is like a reboot of you favourite TV show: the characters and plots are based on the originals, but they aren’t the same.

(g) The appellants in the other cases in the Response have the same surnames as those in reported decisions of other courts or tribunals. In BAILLI there are:

(i) five judgments in the last ten years in which one of the parties had the surname “Jewell”;

(ii) five judgments in the last ten years in which one of the parties had the surname “Oyesanya”;

(iii) twenty judgments in which one of the partes had the surname “Acheson”; and

(iv) four judgments in which one of the parties had the surname “Talal”.

 

(h) The wording of the cases in the Response is similar to that of published FTT decisions. To give just a few examples:

(i) The summary of “David Perrin” states that the appellant “argued that he was unaware of his obligation to notify HMRC and that the penalty charge was therefore unfair”. Numerous genuine FTT cases include as part of the published “key words” or headnotes, the phrase “appellant unaware of the obligation to notify… whether reasonable excuse”, see for example Clarke v HMRC [2020] UKFTT 144 (TC) and McDonough v HMRC [2020] UKFTT 421 (TC), in which the issue as to whether the penalty was “unfair” is also discussed.

(ii) The summary of “Jewell v HMRC (2016)” states that the appellant had submitted that “they had not been aware of the requirement to file a tax return as they had not received any correspondence from HMRC”. In the published case of One Motion Logistics v HMRC [2021] UKFTT 260 (TC), the appellant similarly claimed that “he had not been aware” of the relevant statutory requirement because the relevant correspondence “had not been received” from HMRC, and that as a result he had a reasonable excuse.

(iii) The summary of “Oyesanya” states that the appellant had submitted that “their mental health condition prevented them from being able to manage their affairs effectively”. In the published case of Freiberga v HMRC [2014] UKFTT 746 (TC), the appellant similarly claimed a reasonable excuse because she “was unable to manage her business affairs” as the result of “suffering from [an] acute bout of depression and suicidal thoughts”.

5. But just like the US case of Mata v Avianca 22-cv-1461(PKC), in which two barristers sought to rely on fake cases generated by ChatGPT you can spot the fakes if you look closely.

(a) The American spelling of “favor” in the sentence “The First-tier Tribunal (Tax Chamber) found in their favor” which appears in six of the nine cited cases.

 

(b) The frequent repetition of identical phrases: three of the four ignorance of the law” cases say that “the taxpayer argued that they had not been aware of the requirement to file a tax return as they had not received any correspondence from HMRC”. Two of the “mental health” cases say that “the taxpayer argued that their mental health condition, combined with other factors, had made it impossible for them to submit the return on time” and the other two both say “the taxpayer argued that they had a reasonable excuse for the late filing due to their mental health condition, which had prevented them from being able to manage their affairs effectively”.

6. The Court correctly sets out the harms from the usage of fake cases.

“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 endeavors. 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…judicial system. And a future litigant may be tempted to defy a judicial ruling by disingenuously claiming doubt about its authenticity.”