Court revives coverage dispute, sanctions attorney over AI-cited cases
Court revives coverage dispute, sanctions attorney over AI-cited cases
Publish Date: 2026-03-27 13:53:00
Source Domain: www.businessinsurance.com
- A New Jersey appellate court reinstated AmTrust North America’s coverage dispute against Liberty Mutual Insurance Co. after correcting a procedural flaw.
- The initial case dismissal with prejudice was overturned; instead, the appellate court ruled the dismissal should have been without prejudice to permit AmTrust to amend its complaint.
- The lawsuit concerns workers compensation benefits paid for an injured worker, with AmTrust seeking reimbursement beyond $15,000.
- The court did not decide on the substantive issues of coverage and subrogation due to procedural errors and missing policy documentation.
- The appellate court imposed a $1,000 sanction on the plaintiff’s attorney for citing four nonexistent cases generated by AI.
- The ruling mandated the dismissal to be re-entered without prejudice and the personal payment of the sanction by the plaintiff’s counsel.
