First-Tier Tribunal (Tax Chamber) Appeal: "Professionally incompetent" use of AI

The First-Tier Tribunal (Tax Chamber) has agreed to let an appeal move forward, despite finding “professionally incompetent” use of AI and other procedural missteps. 

HMRC applied in the case of Elden v HMRC to strike out an appeal against enquiry closure notices and setting out amended tax liabilities in relation to income tax and capital gains tax liabilities. Whilst the substantive appeal concerned the closure notices, HMRC asked the tribunal to strike out the case because the appellant had repeatedly failed to follow its directions. These included late filing of amended grounds of appeal, delayed lists of documents and hearing information, as well as a late witness statement. HMRC said that the repeated non-compliance meant that the tribunal could no longer manage the case fairly and justly. Mr Elden argued that HMRC did not suffer any prejudice and strike out would be “draconian”. 

The Judge was critical of the handling of the appeal by Mr Elden’s representatives. Mr Elden’s skeleton argument cited five cases to support why the appeal should not be struck out ,  which were either incorrectly or misleadingly summarised and irrelevant. The judge found that the case summaries were generated by AI and they had not been properly checked for accuracy, despite being used to produce submissions for a Tribunal hearing. As mentioned in Ayinde v London Borough of Haringey, there are serious implications for the administration of justice and public confidence in the system if artificial intelligence is misused. Ultimately, the use of AI in this case amounted to “professional incompetence” on the part of Mr Elden’s representatives.

Notwithstanding the judge’s finding, in respect of the case summaries, the Tribunal did not strike out the appeal. This was largely because no substantive hearing date had been fixed yet, meaning there was still time for the appellant to produce a witness statement. 

This case is another example of the Court’s condemnation of the irresponsible use of AI by regulated professionals. See our recent articles on this topic in a professional indemnity context here and here.