Artificial intelligence may deliver speed and efficiency to legal processes and help certain litigants gain greater access to the courts. But AI is also demonstrating a remarkable talent for creating legal liability, ethics and procedural questions.
One recently filed case involving an insurance company and OpenAI, home of ChatGPT, is a prime example. The insurer, Nippon Life Insurance of America, has sued OpenAI, blaming it for a barrage of filings from a woman representing herself in a disability dispute. The company claims that the AI platform has been dispensing legal advice to the woman and practicing law without a license, a charge OpenAI denies.
The case serves as yet another example of the courts’ increasingly complex relationship with artificial intelligence. New data shows a dramatic increase in the volume and complexity of cases from pro se litigants, with some judges fearing that an already overburdened civil court system will be inundated by AI-generated court filings. Meanwhile, the number of licensed attorneys facing sanctions for relying on bogus, AI-generated information in their cases continues to climb.
At the same time, lawyers, law firms and corporate in-house teams are under ever more pressure from clients and boardrooms to reduce legal costs by deploying AI tools. And large AI companies have noticed that the legal market presents an untapped opportunity for expansion. All of which means the tension between AI, the courts and the legal industry is unlikely to dissipate anytime soon.
A Pro Se Case
The case before a federal court in Illinois is being closely watched for its potential impact on future AI liability and legal ethics. In Nippon Life Insurance Company of America v. OpenAI, filed March 3, 2026, in the U.S. District Court for the Northern District of Illinois, the U.S. arm of the Japanese insurance giant alleges that OpenAI’s ChatGPT illegally interfered with a contract, abused the legal process and engaged in the unauthorized practice of law in its answers to prompts by a pro se litigant.
Graciela Dela Torre of Elgin, Ill., was engaged in a long-running dispute with Nippon Life over a disability claim. After agreeing to a settlement in 2024, she attempted to reopen the dispute a year later, alleging errors in the case and omissions of key evidence. When her attorneys disagreed with her assertions, Dela Torre turned to ChatGPT. The chatbot’s responses encouraged her to fire her counsel and continue the fight pro se, according to court documents.
Nippon Life alleges in its complaint that Dela Torre asked ChatGPT to provide her with advice on how to vacate the settlement agreement and reopen her lawsuit. In response to her prompts, ChatGPT generated proposed legal arguments, Nippon Life said. The insurer said that Dela Torre had agreed as part of her settlement with Nippon to release it from all claims and liabilities associated with her disability case. Filing a motion to reopen the matter directly breached terms of the agreement, the company said.
ChatGPT’s Role
OpenAI, Nippon Life said, designed ChatGPT to provide legal services, was aware of how it was being used and induced Dela Torre to breach her settlement agreement by “knowingly generating legal arguments and drafting court filings that encouraged and facilitated a challenge.”
Taken together, ChatGPT’s actions meant that it was providing legal services and engaging in the unauthorized practice of law. “ChatGPT is not an attorney. Although it was able to pass the Uniform Bar Examination with a combined score of 297, it has not been admitted to practice law in the State of Illinois or in any other jurisdiction within the United States,” the company said in court documents.
In its response to Nippon’s complaint, filed in early May, OpenAI agreed—ChatGPT is not a lawyer. As a result, the insurance company has no standing to bring its case, the tech company argued. “ChatGPT is not a ‘person,’ but a tool that relies on statistics to predict the most appropriate sequence of words based on its training. It is incapable of practicing law,” OpenAI said.
As for inducing Della Torre to breach her settlement agreement, the allegation is “incorrect as a matter of law and fundamentally incompatible with the nature of the technology,” OpenAI said. It also lambasted Nippon’s claims that it aided and abetted Dela Torre in an alleged abuse of process, saying that ChatGPT is a “general purpose tool” for “use by millions of people in the public.”
Potential Impact
John Flynn and Joshua Baskin of Wilson Sonsini Goodrich & Rosati and Steven Mandell of Mandell PC are representing OpenAI in the case, according to court documents. Christopher Assise of Sidley Austin and Justin Wax Jacobs, deputy general counsel at Nippon Life, are listed as counsel for the insurance company.
Nippon is seeking to permanently enjoin OpenAI from “providing legal assistance” to Dela Torre or “practicing law in the state,” compensatory damages of $300,000 and punitive damages of $10 million.
As JD Journal reported, should the court hold OpenAI liable for legal content generated by chatbots, legal employers “may need stricter oversight systems” and to invest in AI governance and risk management. A win by OpenAI, the publication said, would “strengthen arguments that AI platforms function similarly to general-purpose software tools rather than regulated legal service providers.”
Concerns Over Quantity
However the Nippon case pans out, AI, without question, has enabled a dramatic increase in filings by pro se litigants. A recently released study by two doctoral students at the Massachusetts Institute of Technology and the University of Southern California reviewed more than 4.5 million federal civil court cases filed between 2005 and 2026. The research found that AI-generated materials had helped the percentage of self-represented cases filed by non-prisoners to rise from 11% on average to nearly 17% in 2025.
The study also said that pro se cases are taking up more of the courts’ time. Reviewing the 46 million docket entries associated with the civil cases they reviewed, the researchers said they discovered a 158% increase in the volume of court filings (motions, briefs, declarations and other intra-case documents) from the pre-AI era to 2025. More than 18% of civil cases in 2026 tested positive for AI-generated text, the report said, up from “essentially zero in the pre-AI period.”
Reporting on the study, The New York Times noted that federal judges and legal experts are worried about AI-generated pro se filings “flooding court dockets and clogging an already overburdened system—even as [AI] opens up the legal system to people who might not otherwise be able to afford to bring a case.” One judge told the Times that the problem posed “an existential threat to the federal courts.”
Qualms Over Quality
Concerns about AI’s impact on the quality of representation have also been roiling the courts. In February, we wrote of two recent court rulings in which judges ruled on the potential legal risks lawyers and their clients face in using publicly available AI tools.
In one, a New York federal judge ruled that a criminal defendant could not shield a set of AI-generated documents from prosecutors even though the material had been created to assist his legal defense. In the other case, the U.S. Court of Appeals for the Fifth Circuit sanctioned an Arkansas lawyer for submitting an AI-generated brief that contained 21 fictional case citations and other errors.
The Fifth Circuit complained about the ongoing issues attorneys are having with AI hallucinations in their filings, saying the issue “has become central to the ongoing discussions of the relationship between law and technology.” They also cited data compiled by Damien Charlotin, a French lawyer and data scientist, which, at the time, showed U.S. courts have found AI hallucinations in more than 260 filings by lawyers, judges and paralegals since April 2023.
In the months since that decision, the numbers have escalated. As of the end of May, more than 400 cases by U.S. legal professionals have included AI hallucinations, Charlotin’s data shows. In the highest-profile recent case, Wall Street titan Sullivan & Crowell was forced to apologize to a federal judge for dozens of AI-generated errors, many of them involving passages from real cases that had been fabricated by AI.
A Major Move by Anthropic
Whatever the concerns about their role in the courts and litigation, the market for AI tools continues to expand—as does the investment in AI software and platforms aimed at the legal industry.
On May 12, 2026, for instance, one of the biggest AI players, Anthropic, whose Claude AI platform is ChatGPT’s top competitor, made a significant move into the legal space, launching a dozen new, practice-specific plug-ins and more than 20 protocols to connect Claude to popular legal software.
Reuters said the new technology allows Anthropic to build on “plug-ins for Claude Cowork that the company announced in late January.” Claude will now give law firms the ability to securely connect with third-party platforms for legal research, document management and other services.
Bloomberg noted that general purpose tools like Claude, ChatGPT and Google’s Gemini are “racing to define what the future of legal work looks like, versus tailored tech solutions built for lawyers by smaller companies.” Claude, Bloomberg said, was already favored by legal tech companies for behind-the-scenes AI work and the new capabilities could now change Anthropic’s role in the legal industry.
“The question,” Bloomberg wrote, “is whether the bigger platforms can be all-in-one tools for legal professionals—including in-house teams—or if attorneys need AI built by niche vendors.” How well they avoid hallucinations and help overcome doubts in the courtroom may be key factors in winning that contest.
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David L. Brown is a legal affairs writer and consultant, who has served as head of editorial at ALM Media, editor-in-chief of The National Law Journal and Legal Times and executive editor of The American Lawyer. He consults on thought leadership strategy and creates in-depth content for legal industry clients and works closely with Best Law Firms® as senior content consultant.