A US federal appeals court has upheld an award of approximately US$115,000 in legal fees, rejecting an argument that the lawyers’ use of artificial intelligence meant they should have billed fewer hours.
In Flux Drive Inc v Sparks, 10th US Circuit Court of Appeals, No. 25-1308 the Tenth Circuit found that the trial judge had examined the billing records and reasonably concluded that the hours and rates were justified. The appellants did not identify a specific inflated entry, redundant task, or unreasonable charge attributable to AI use.
The court accepted that AI and online research tools may improve efficiency and sometimes reduce the time required to conduct litigation. But that possibility did not establish that the hours actually worked in this matter were unreasonable. It also emphasised that lawyers remain responsible for verifying authorities and arguments produced with AI.
The ruling does not establish that AI-assisted fees are invariably recoverable or reasonable. Its narrower significance is evidentiary: a party challenging fees must show how the technology affected the work claimed, rather than assuming AI necessarily reduced it.
Although not binding in Australia, the decision reinforces an important distinction. AI may compress production time, while professional verification, correction and judgment remain real work. Fair valuation therefore requires evidence of what the practitioner actually contributed—not a hypothetical reconstruction of how long the task once took.
Sources: Tenth Circuit opinion; Reuters.
Leave a Reply