Background 

The Gauteng Division of the High Court recently handed down a significant judgment in Northbound Processing (Pty) Ltd v South African Diamond and Precious Metals Regulator & Others (Case No. 2025-072038, 30 June 2025, DJ Smit AJ). 

While the case primarily concerned interim relief compelling the release of a refining licence, it has attracted wider attention because of an ethical issue in Northbound’s heads of argument: the citation of non-existent cases generated by an AI legal research tool. 

The AI “Hallucination” Problem 

Two fabricated authorities were presented in support of key legal propositions. Upon being challenged, counsel acknowledged that they had used an online subscription tool (“Legal Genius”), which purported to be trained on South African law. The tool had produced coherent but fictitious citations, a classic example of so-called AI “hallucinations.” 

Senior and junior counsel both apologised. It was emphasised that oral argument did not rely on these citations, and that there was no intent to mislead. Nonetheless, the Court found the lapse serious. 

The Court’s Reasoning 

Judge Smit drew parallels with: 

• Mavundla v MEC for Co-operative Government and Traditional Affairs, KwaZulu-Natal (2025 (3) SA 534 (KZP)), where fabricated cases had been cited in oral submissions. 

• The recent English High Court decision in Ayinde v London Borough of Haringey; Al-Haroun v Qatar National Bank QPSC [2025] EWHC 1383 (Admin), which warned of the risks AI poses to the integrity of legal proceedings. 

Key principles reaffirmed: 

• Practitioners have a duty not to mislead the court - whether by negligence or design. 

• AI tools may generate plausible but false legal references. Counsel must independently verify all authorities against authoritative sources. 

• Misuse of AI in legal practice undermines public confidence in the justice system and may constitute serious professional misconduct. 

Consequences Ordered 

The Court referred the conduct of Northbound’s legal team to the Legal Practice Council for investigation, echoing the sanction in Mavundla. The judgment makes it clear that: 

• Even if apologies are accepted and no prejudice is shown, negligence alone may warrant regulatory scrutiny. 

• “Admonishment alone is unlikely to be a sufficient response” where false citations reach the court. 

Implications for Legal Practitioners 

This judgment underscores that: 

• AI may assist in legal research, but it cannot replace professional diligence. 

• Every citation and quotation must be checked against primary sources. 

• Firms should implement clear protocols for the responsible use of AI, including training, internal verification procedures, and awareness of ethical obligations. 

Conclusion 

The Northbound Processing judgment marks a watershed moment in South African legal ethics and AI use. It sends a strong message: while technology can be a valuable aid, ultimate responsibility rests with the practitioner. Accuracy, honesty, and diligence remain the cornerstones of advocacy.