Companies may be held liable when AI harms their clients and customers

AI use in workplaces is rising fast, but a new legal reality is emerging: professionals may still be held responsible when AI outputs harm clients or customers. The Conversation highlights research showing broad adoption in the US, including Gallup’s finding that 52% of employees and 68% of professional services workers used AI by February 2026. It points to litigation and court sanctions tied to AI “hallucinations”—confident-sounding errors. A key example is Clinco v. Commissioner in the US Tax Court, where attorney Abraham Wagner cited cases the court found to be AI-generated and nonexistent. The court rejected the taxpayer’s arguments and warned Wagner about possible sanctions.