A Federal Court judge has refused an AI-generated filing he called "AI slop," in a disability claim dispute against insurer TAL Life.
The filing came from a self-represented superannuation member who says his total and permanent disablement (TPD) and salary continuance claims were wrongly declined. He is suing the trustee of his fund, BT Funds Management, and his group life insurer, TAL Life. The court had already thrown out an earlier version of his claim and given him another chance to plead it.
His new attempt did not survive. The judge said it had "ballooned to more than 400 paragraphs over 33 pages in very small font and single-spaced lines" and was "replete with 112 references to documents by filename" - files named as they were saved on the applicant's own computer, which the court said were meaningless because the same documents appeared under different names in the evidence.
The applicant confirmed at the hearing that he had used generative AI to produce it. The judge called it an example of "AI slop" and, in a neat touch, quoted the definition an AI tool gave when he asked it what the term meant: "'AI slop' is a disparaging term for low-quality content produced by generative AI, often rapidly and in large quantities, with little human judgement, checking or editing."
He was careful not to blame the technology. Used "thoughtfully and critically," he said, generative AI can help people who represent themselves; used carelessly, it tends to produce slop. He found the filing likely to cause "prejudice, embarrassment or delay," and on that ground alone refused to let it be filed.
Beneath the headline sits a claims story life insurers will recognise. The cover started with a different insurer. Before January 1, 2018, the fund's TPD and salary continuance policies were underwritten by AIA. On that date they were "novated" to Westpac Life - legally handed to a new insurer, replacing the old contract - and the terms were changed. Westpac Life was later renamed, and its life business moved to TAL under a court-approved scheme that took effect at the end of March 2025.
That handover is the crux. Novation does not simply carry the old cover forward. As the court put it, it "involves the extinguishment of one obligation and the creation of a substituted obligation in its place." So whether TAL carries anything from the pre-2018 period depends on the fine print of that transfer and the old AIA wording.
Here is the snag: neither TAL nor the trustee put the old policy wording or the transfer agreement in front of the court. The judge flagged it, saying "it is regrettable that neither BTFM nor TAL has seen fit to put that evidence before the Court." Because those documents were missing, he could not rule out a claim built on the earlier wording - so he refused to shut the case down.
Timing drove the rest. The member argued his disability dated from March 10, 2017, the day he stopped work. TAL argued it dated from September 10, 2018, when a doctor first certified him unfit. For the purpose of the leave decision, the judge went with the later date. That routed any post-2018 claim into the parts of the policies that test "activities of daily living" - everyday tasks like bathing, dressing and eating.
On the evidence, the member could manage those tasks. A psychiatrist engaged by the trustee reported that his condition affected motivation rather than capacity: "His mental health condition impacts on his ability to perform activities of daily living; however this is not because he is unable to do these activities but more that he lacks motivation to do so." On that footing, the judge saw no arguable salary continuance claim under the post-2018 wording, and only a remote TPD one.
The member also argued TAL breached its duty of "utmost good faith" - a duty every insurer owes under the Insurance Contracts Act to deal fairly with policyholders. As pleaded, the judge found that argument too vague to stand, but left the door open in case TAL turns out to have owed something under the earlier wording.
The upshot: the judge dismissed the application to file the AI-generated document, with no order as to costs. He did not dismiss the case. The member can try again with a tighter claim focused on the pre-2018 AIA wording and its transfer to TAL - the same documents his opponents have so far kept off the record.
