What happened
In Valu v Minister for Immigration and Multicultural Affairs (No 2) [2025] FedCFamC2G 95, the applicant’s legal representative filed an amended application and an outline of submissions in the Federal Circuit and Family Court of Australia. The documents cited a series of Australian authorities in support of the applicant’s case, including passages presented as direct quotes from a decision of the Administrative Appeals Tribunal.
The cases could not be verified by the Court, because they did not exist. The quotes attributed to the Tribunal did not exist either. When the matter was examined, the legal representative acknowledged that he had used an AI tool, ChatGPT, to identify Australian case law, and that the tool had returned non-existent decisions and fabricated quotations that he had then put before the Court without checking them against any real source. The fabricated material amounted to seventeen non-existent case citations, together with fabricated quotations attributed to the Tribunal across eight separate passages, all identified by the Minister’s lawyers before the hearing.
The legal representative accepted that providing false case citations and quotes attributed to the Tribunal was a breach of his duty to his client and to the Court, and that his conduct fell short of the standard expected of a legal practitioner. Judge Rania Skaros referred him to the Office of the New South Wales Legal Services Commissioner. The case became one of the landmark Australian examples of generative AI hallucinations entering court documents, and it sits alongside a growing line of decisions in which practitioners have been sanctioned or referred for filing AI-invented authority.
What an auditable version would have shown
The thing that makes hallucinated citations so corrosive is that they are designed to look correct. A fabricated case carries a plausible name, a plausible court, a plausible year, and a plausible quotation. The Court caught these because a citation is checkable against an authoritative source, the actual law report, and they failed that check. The failure was that nobody ran the check before the documents were filed.
An auditable drafting workflow would treat every citation as something that has to be confirmed against a real legal database before a document can leave the practitioner’s hands, and would keep a record of the result. For each authority cited, that record would carry the citation as drafted, the database queried, and the outcome of the lookup, found with a matching report or not found. Run over the Valu submissions, it would have produced a column of seventeen not-found results before anything was filed. The relevant fact for a court or regulator afterwards is not only that the citations were false, but that no such check ever stood between the model’s output and the filed document.
Where the gap was
The gap was the absence of any verification routed to a trusted source, and any record that verification was done.
A CitationVerifier checks every citation in a document against a real legal, academic, or technical database before the document can ship, and refuses to pass a citation it cannot find. A VerificationGate generalises the same discipline: a claim the model proposes is routed to a trusted source for confirmation, never back to the model that produced it. The model proposes; a database disposes. Either control, applied to the Valu submissions, would have caught seventeen citations that no law report contained. A ConductRecord then preserves the result, so the difference between checked and unchecked is part of the file rather than a matter of later admission.
What happened instead is the default failure mode of generative AI in expert work: the model produced fluent, authoritative-looking output, and a professional trusted it because it looked like the real thing, with no independent check in between.
What governance should have looked like
The legal profession does not need to ban AI drafting tools to avoid the Valu outcome. It needs the verification step to be non-optional and recorded.
Every citation in a document bound for a court should be confirmed against a real source before filing, automatically, as a condition of the document being finalised, not as a discretionary check a busy practitioner might skip. The confirmation should be recorded, so that a practitioner can show the court that every authority was verified, and so that a firm or chambers can see at a glance whether the discipline is being followed. Courts in multiple Australian jurisdictions are now issuing practice rules requiring exactly this kind of verification and disclosure for AI-assisted documents. The practitioners who build the check into their workflow, and can prove it ran, will not be the ones being referred to the regulator. The ones who rely on the output looking right will be.
The reference implementation of CitationVerifier, VerificationGate, and ConductRecord is open source. It lives at github.com/saffronandindia/headlights-oss, Apache 2.0 licensed and free to install. Anyone can read every line and verify the signatures. The repository is public now.