AI Use Scrutinised in Employee Costs Ruling
A former employee has been ordered to pay $45,000 in costs after the Federal Court rejected his bid for judicial review of two Fair Work Commission decisions.
The former employee said he used AI only to check spelling and grammar, but the Court identified apparent “hallucinations”, including references to written submissions that did not exist. The judge said there was a likelihood that some anomalies resulted from the “indiscriminate use of artificial intelligence”.
Costs are not automatic in Fair Work court proceedings. Here, the Court found the proceedings were brought without reasonable cause and that his unreasonable conduct caused the employer to incur costs. It described the case as “always doomed to fail”.
Take-Out Point: An expensive reminder: employees can face costs orders for meritless litigation. If AI is used it is essential that every fact, reference and argument is checked. The chatbot won’t be reaching for its wallet.
See: Raghib v Stantec Australia (Costs) [2026] FCA 1415, 24 September 2026.