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Incident Tracker / United Kingdom

Cork & Anor v Smith, [2026] EWHC 1199 (Ch)

·High Court of England and Wales (Business and Property Courts, Insolvency and Companies List)·UKRegulatory referral

In the High Court (Insolvency and Companies List), Pinsent Masons LLP quoted a fabricated version of Insolvency Rule 12.37(5) — text that does not exist — after a junior solicitor used an AI system that hallucinated the provision. The firm self-referred to the Solicitors Regulation Authority and agreed to pay the clients' costs of the erroneous correspondence.

Analysis
Pinsent Masons self-referred to the SRA after AI invented an insolvency rule
Court
High Court of England and Wales (Business and Property Courts, Insolvency and Companies List)
Date
2026-05-22
Who used the AI
Not recorded
AI tool
Not identified in the record
Conduct
Pinsent Masons LLP presented, as a direct quotation in a 30 March 2026 letter to the court, fabricated text purporting to be Insolvency Rule 12.37(5) — a provision that does not exist. A junior associate solicitor had used an AI system that hallucinated the rule; a second letter compounded the error.
Outcome
Regulatory referral
Penalty
No monetary penalty recorded
Regulatory outcome
Solicitors Regulation Authority: Pinsent Masons self-referred to the SRA and agreed to pay the clients' costs arising from the erroneous correspondence; ICC Judge Mullen's judgment stands as a public admonishment, with the SRA investigation to follow. (2026-05-22)
Status
Verified against listed sources
Last checked
2026-09-04

What was fabricated or misused

  • Purported text of Insolvency Rule 12.37(5): “The court may, in an order made under this rule, make such provision as it thinks fit with respect to matters arising in connection with the replacement, including— (a) the release of the outgoing officeholder; and (b) the handling of any ongoing proceedings or matters arising from the conduct of the insolvency proceedings.” — not in IR 12.37(5) or elsewhere in the Insolvency Rules
  • AI statement that Rule 12.39 expressly provides for block transfer orders and consequential directions — false; the rule concerns opening and inspection of a court file
  • AI account that section 173 of the Insolvency Act 1986 applies to compulsory liquidation and provides listed release events — wrong; section 173 deals with voluntary liquidation
  • AI statement that Rule 12.37(8) grants broad discretion to make release provision — false; the rule requires a schedule to accompany the application

What the court said

“I checked the other rules in that chapter of the IR 2016 to see if, perhaps, the paragraph reference was wrong and the words appeared elsewhere. They did not.”
High Court of England and Wales (Business and Property Courts, Insolvency and Companies List), [20]
“The Purported Text in the 30th March Letter had caused me to be concerned that a cavalier attitude was being taken as to the accuracy of the material that Pinsent Masons were putting before the court.”
High Court of England and Wales (Business and Property Courts, Insolvency and Companies List), [25]
“Witness statements were filed in accordance with my directions. They confirm that AI was indeed used in the production of the two letters, but not in the production of the documents in support of the application itself.”
High Court of England and Wales (Business and Property Courts, Insolvency and Companies List), [27]
“The real answer, on the evidence that I have, was that a junior associate had used AI to research the point and the AI invented the quotation.”
High Court of England and Wales (Business and Property Courts, Insolvency and Companies List), [71]

Timeline

  1. Block transfer application dated 17 March 2026 was filed.
  2. Court office asked what power allowed release in liquidation.
  3. Pinsent Masons letter presented the purported IR 12.37(5) text.
  4. Court asked Pinsent Masons to identify where the quoted words appeared.
  5. Court ordered witness statements about the letters and possible AI use.
  6. Court made the block transfer order by consent with new solicitors.
  7. Judgment required Pinsent Masons to send the SRA a copy within two working days.

Why this case matters

Cork moves the UK sequence beyond Ayinde v Haringey. The false text came from a major firm’s internal AI pilot, not a litigant in person or small practice. The judge treated the uncontentious nature of block-transfer applications as part of the risk: no opponent would test the invented rule before the court acted. The public result was not a costs order or contempt referral, but a judgment naming the firm, confirming self-referral to the SRA, and leaving the regulator to examine three fee-earners.

Practice note

When a draft letter quotes a rule, open legislation.gov.uk or an authoritative text and compare the words before filing. Supervisors should treat a junior lawyer’s unfamiliar statutory quote as a checkpoint, not as research already complete. If the court flags false material, investigate the drafting record before sending an explanation.

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Cite this record

SafeLegalAI Global Legal AI Incident Tracker, “Cork & Anor v Smith, [2026] EWHC 1199 (Ch)”, safelegalai.com/tracker/cork-v-smith (accessed 2026-09-16). Data: CC BY 4.0.

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