ICC Judge Mullen refers Pinsent Masons to SRA over AI hallucination in court letters

Pinsent Masons LLP has been publicly admonished and referred to the Solicitors Regulation Authority by ICC Judge Mullen after AI-generated text falsely attributed to rule 12.37(5) of the Insolvency (England and Wales) Rules 2016 was submitted to the Insolvency and Companies List (ChD) in letters dated 30 March 2026 and 14 April 2026. The judgment in Malcolm Cork & Anor v Smith [2026] EWHC 1199 (Ch), case number CR-2026-002244, was handed down remotely at the Royal Courts of Justice, Rolls Building on 22 May 2026 following a hearing on 18 May 2026.

The block transfer application

The case arose from a block transfer application dated 17 March 2026. A block transfer is a procedure under rule 12.36 of the Insolvency (England and Wales) Rules 2016 by which an insolvency practitioner who is retiring or moving firms can be removed from all of their appointments across multiple cases in a single court application. The applicants were Anthony Malcolm Cork and Stephen Robert Leslie Cork. The respondent was Mark Smith.

Such applications are, as the judge noted, almost invariably determined without a hearing. This one was not. When Judge Mullen reviewed the papers, he raised a query about whether the court had power to grant a liquidator his release on the making of a block transfer order. The court office conveyed that query to Pinsent Masons, the applicants' solicitors at the time, by email on 20 March 2026.

The hallucinated provision

Pinsent Masons replied by letter on 30 March 2026. That letter cited rule 12.37(5) as containing an express power to grant release and set out what it described as the text of that provision, presented in italics and introduced with the words "provides as follows". The quoted text stated that the court may, in an order made under the rule, make such provision as it thinks fit with respect to matters arising in connection with the replacement, including the release of the outgoing officeholder and the handling of any ongoing proceedings.

That text does not exist. Rule 12.37(5) of the Insolvency (England and Wales) Rules 2016 deals with standing to apply where one or more outgoing officeholder is an administrator. It says nothing about release. When Judge Mullen checked the rule on legislation.gov.uk and in a practitioner text, he found the quoted passage nowhere in the statutory instrument.

The judge described his reaction: "I was taken aback to be told there was such a clear rule in the IR 2016 setting out the court's power in this regard." On checking, he concluded that the passage was "an artificial intelligence hallucination" -- a term he defined in the judgment as arising where AI generates false or misleading information which it presents as fact.

The court office wrote to Pinsent Masons on 14 April 2026, noting that the quoted wording did not appear in rule 12.37 at all and asking for an explanation. The firm's reply, also dated 14 April 2026, sought to characterise the purported text as a "summary conclusion" drawn from various provisions of rule 12.37 and not intended as a direct quotation. Judge Mullen described himself as "astonished" by that reply, which he found impossible to accept given the way the text had been presented.

How the letters were produced

Witness statements filed in advance of the 18 May hearing confirmed that the firm's AI tool had been used in the production of both letters, though not in the underlying application documents.

The fee-earner with day-to-day conduct of the matter was identified in the judgment only as "Lawyer A" (LA). The judgment records that LA began chatting with the firm's AI on 20 March 2026 following receipt of the court's query. The AI hallucinated the text of rule 12.37(5) early in those exchanges and warned LA on multiple occasions that it could not verify the precise wording and that LA should check legislation.gov.uk before filing.

The AI chat transcripts ran to some 59 pages and were produced in evidence by Julie Herriott, the firm's Deputy General Counsel (Risk and Regulatory) and Compliance Officer for Legal Practice. They showed that at 2.42pm on 30 March 2026 the AI again urged verification, noting that "the last thing you want is to cite a provision to the court with inaccurate wording." The letter was sent for filing nine minutes later. LA had removed the quotation marks from around the purported text but made no other change to its presentation.

Samantha Poulton, a senior associate who was admitted as a solicitor in 2018, had day-to-day supervisory responsibility for the matter. Steven Cottee, who has been a partner at the firm since 2012 and has over 25 years of experience as a solicitor, was the partner responsible for supervising the work. Cottee approved the sending of the 30 March letter after reviewing the documents and indicating they looked "good to go". Poulton gave the letter a cursory review. Both confirmed in their witness statements that they were unaware at the time that AI had been used in preparing the letter.

For the 14 April letter, LA again used the AI to draft a response after the court identified the error. Once LA fed in the full text of rule 12.37, the AI stated plainly that the quoted wording "does not appear anywhere in Rule 12.37" and that "the honest response to the Court is to acknowledge this frankly." The resulting letter, which Poulton approved, did not acknowledge the AI's role and instead offered a rationale for why rule 12.37(5) had been referenced. Judge Mullen found that rationale impossible to accept.

Cottee was not involved in drafting or approving the 14 April letter. In his witness statement he accepts that the 30 March letter should have been checked more carefully. Poulton, in her witness statement, accepts that she did not review the 14 April letter with the necessary care and that she should have escalated the matter internally before it was sent. She describes herself as "mortified" that inaccurate statements of the law were sent out in the firm's name.

The legal framework and the court's approach

Judge Mullen drew on the judgment of Dame Victoria Sharp P in R (Ayinde) v London Borough of Haringey [2025] EWHC 1383 (Admin), in which the President of the King's Bench Division set out the professional duties of lawyers using AI and the range of powers available to the court where false material has been placed before it. Those powers include public admonition, costs orders, wasted costs orders, referral to a regulator and the initiation of contempt proceedings.

The judge noted that block transfer applications are uncontested and administrative. No opposing party is present to identify errors. "The court is therefore particularly exposed to the risk of being misled if material is placed before it that has not been prepared with appropriate care and attention."

Pinsent Masons' own AI use policy, exhibited to the proceedings, warned users that AI "has the potential to produce output that appears believable but is, in fact, highly inaccurate, outdated or entirely fabricated" and required that all outputs be fact-checked before reliance.

The outcome

At the hearing, Pinsent Masons was represented by Paul Mitchell KC, instructed by Clyde and Co LLP. Mitchell told the court that the firm had referred itself to the SRA and would cooperate fully with any investigation. He also confirmed that Pinsent Masons was meeting the former clients' costs arising from the court's query, including the costs of instructing alternative solicitors, Irwin Mitchell LLP. Andrew Brown appeared for the applicants, instructed by Irwin Mitchell.

A block transfer order had already been made on 8 May 2026 on the basis of a consent order supplied by Irwin Mitchell, so the hearing on 18 May was convened solely to consider whether further action should be taken against the fee-earners involved.

Judge Mullen accepted, for the purposes of the hearing, that neither Poulton nor Cottee intended to mislead the court, and found that both had given frank and truthful accounts in their witness statements. He found, however, that both letters sent to the court were misleading and that the supervision of LA and the checking of the purported text had been inadequate. The judge considered whether to initiate contempt proceedings in respect of LA but concluded, as a matter of discretion, that doing so would be disproportionate given LA's inexperience, the limited harm to the proceedings, and the availability of SRA referral. He declined to name LA in the judgment for the same reason.

The operative conclusion, at the close of the judgment, is that publication of the judgment constitutes a public admonishment of Pinsent Masons, Cottee and Poulton, and that the SRA referral, made by the firm on its own initiative, is the proportionate regulatory response. The judge directed Pinsent Masons to provide a copy of the judgment to the SRA within two working days of it being handed down. Following the hearing, Clyde and Co wrote to the court to confirm that LA had separately emailed the SRA to identify themselves as Lawyer A.

Judge Mullen closed with a reminder drawn from the President's judgment in Ayinde that legal professionals bear ultimate responsibility for their work and cannot outsource legal research or legal reasoning to an AI. "It is a tool to be used with caution," he said. "AI has the potential to be wholly unreliable."