The Risks of AI‑Generated Legal Responses in Insolvency Cases
Over the last couple of decades legal aid cuts and the supposed simplification of court processes have led to more people representing themselves in court proceedings. Court service data shows that over a third of civil cases and nearly half of private family cases involve at least one unrepresented party. And according to a spring 2024 Law Society analysis, the number of litigants in person in family cases has almost tripled since the austerity‑era legal aid cuts of 2012. The result? A court system under strain and an extra burden on represented parties, whose lawyers must take additional steps to avoid unfairness to an unrepresented party.
Published: March 3rd, 2026
4 min read
Insolvency claims such as antecedent transactions and misfeasance or breach‑of‑duty allegations are often defended by respondents (usually former directors of an insolvent company) acting in person. This is in line with recent trends in civil litigation and compounded by the significant legal expense of defending complex claims and the financial pressures which can arise in the aftermath of insolvency.
Our Forbes Solicitors insolvency team is increasingly seeing litigants in person turning to AI tools to respond to claims and honestly, who can blame them? Insolvency law is complicated and legal advice is expensive. If you can type a few lines into a laptop or smart phone and get instant “advice” plus a draft response that looks professionally written, that beats paying the £2,000 up front costs demanded by the lawyer you spoke to over the phone.
But here’s the rub. Robbie the legal robot isn’t a lawyer. It can churn out something that looks polished, but scratch the surface and it’s often repetitive, irrelevant and either blissfully unaware of any actual legal authority or is simply making it up. We’ve all seen the horror stories of AI inventing case law and sending litigants down expensive rabbit holes. Your friendly robo-brief also can’t manage risk and won’t deliver necessary tough love. It’s the ultimate “yes‑man” not only telling a litigant they’re right, but that they’re righteous.
For lawyers and insolvency practitioners on the receiving end, this flood of AI‑generated missives creates real cost and delay. Because bots can reply instantly, we sometimes receive multiple “final notices” re‑raising the same non‑issues and inventing new deadlines out of thin air. This artificial influx takes up time which would be better focused on achieving creditor outcomes and leads to increased costs jeopardising creditor return. It can also backfire badly on the litigant if they ultimately lose the case their robot cheerleader insisted they’d win with increased adverse costs to boot.
Our insolvency team has taken a firm but fair approach when responding to AI generated content. We keep our focus on the actual issues in dispute and respond to peripheral or AI‑generated points with a clear warning that further repetitive correspondence will be placed on file but may not receive a reply. This helps keep the case on track and avoids both the IP and the lawyer getting dragged into a digital vortex. We’re also increasingly calling out the use of AI where we see it, explaining to litigants that such tools are unreliable and pointing them towards free, reputable resources like Citizens Advice instead.
Something needs to be done though. This growing reliance on robot “advice” is risky for litigants, contributes to a clogged court system and ultimately harms creditor recovery. The recent Mazur case narrowed the definition of lawyers permitted to act in court proceedings and frankly, it’s hard to see why similar restrictions shouldn’t apply to our robot cousins.
As technology improves, there’s real potential for AI to become a helpful companion in navigating complex legal issues, provided it’s used responsibly and with proper guidance. Until then, the best outcomes will continue to come from human expertise supported, not replaced, by smart tools.
For further information please contact Chris Bowers
