AI tools like ChatGPT and Microsoft's Copilot have produced false information about individuals, leading to legal challenges and defamation concerns. Cases include a German journalist and an Australian mayor falsely described as criminals, and a US radio host suing OpenAI. These cases may set precedents for AI liability. Correcting AI errors is difficult due to system opacity. Some courts now require disclosure of AI use in case preparation. An inquiry is underway into AI use in courts, with potential future applications in case management, translation, and dispute resolution.

**For companies using AI tools:** You must implement rigorous fact-checking processes for AI-generated content. Establish clear guidelines for AI usage in customer-facing communications and internal documents. Review your liability insurance to ensure coverage for AI-related defamation claims. Train your staff on the limitations of AI and the importance of human oversight. Consider developing a rapid response plan for addressing AI-generated misinformation about your company or stakeholders. **For legal firms:** Prepare for an influx of AI-related defamation cases. Develop expertise in AI liability and ethics to advise clients effectively. Consider partnering with AI experts to strengthen your technical understanding and case strategies. **For court systems and legal administrators:** Implement clear policies on AI use in case preparation and courtroom proceedings. Invest in training for judges and court staff on AI capabilities and limitations. Explore secure AI solutions for case management and translation services, ensuring data privacy and accuracy.

Expect a surge in AI-related legal challenges, potentially leading to new regulations and industry standards for AI transparency and accountability. AI companies may need to develop more robust fact-checking mechanisms and easier ways to correct errors. Courts will likely establish clearer guidelines on AI use in legal proceedings, potentially including mandatory disclosures and limitations. As AI becomes more prevalent in dispute resolution, we may see the emergence of specialized AI mediators and arbitrators. Businesses across industries will need to adapt their risk management strategies to account for AI-related liabilities, potentially leading to new insurance products and legal service offerings. The balance between AI innovation and protecting individuals from false information will be a key challenge for policymakers and business leaders in the coming years.