New York is considering a bill to prohibit AI chatbots from giving advice normally offered by licensed professionals like lawyers or doctors. Under the proposal, people who believe they were harmed by such advice would be able to sue the chatbot’s operator.

Senate Bill S7263 “would prohibit a chatbot from giving substantive responses, information, or advice” or taking any action that, if taken by a natural person, would constitute unauthorized practice or unauthorized use of a professional title under state law.

Chatbot operators will be required to provide “clear, conspicuous, and explicit notice to users" that they’re interacting with an AI program. According to the bill, the notice shall appear in the same language the chatbot is using and in a font size easily readable by an average viewer. However, merely notifying a user does not waive or disclaim the operator’s liability.

An important provision also allows a person to bring a civil action to recover actual damages. If the operator is found to be in violation of the bill, they will be liable for actual damages, together with costs and reasonable attorney fees.

Other states have passed or are considering similar laws, including California (which requires chatbot providers to clearly disclose when users are interacting with AI and prohibits implying that a human professional is providing care), Nevada (which prohibits AI systems from providing professional mental and behavioral healthcare therapy), and Illinois (which restricts or prohibits tech companies from offering AI-powered therapy services without professional oversight).

Earlier in March, ChatGPT maker OpenAI was accused of facilitating unauthorized practice of law through ChatGPT. In a lawsuit, Nippon Life Insurance Company of America accused OpenAI of providing legal assistance to Graciela Dela Torre by encouraging her to reopen a disability case that had been dismissed with prejudice.

Dela Torre allegedly uploaded her lawyer’s email to ChatGPT, which confirmed she was correct to doubt the received advice. She went on to fire her lawyer and reopen her closed case using ChatGPT, according to the lawsuit.

The lawsuit claims that as a result of OpenAI’s conduct, Nippon has been forced to spend significant time and resources relitigating settled claims, incurring substantial legal fees, costs, and other damages.

“ChatGPT is not an attorney,” the lawsuit said. “Although it was able to pass the Uniform Bar Examination with a combined score of 297, it has not been admitted to practice law in the State of Illinois or in any other jurisdiction within the United States.”

The company seeks $300,000 in compensatory damages and $10 million in punitive damages, as well as an injunction preventing OpenAI from engaging in the practice of law in the state of Illinois.

In a statement, OpenAI responded that “this complaint lacks any merit whatsoever.”

The lawsuit became one of the first to accuse an AI giant of engaging in unauthorized legal practices through a consumer‑facing chatbot, according to Reuters.

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