Organizations: Department of Computer Science, University of British Columbia · Vector Institute · Peter A. Allard School of Law, University of British Columbia · CIFAR AI Chair
Abstract
RAG-based legal assistants have been growing in popularity, but LLM hallucinations remain a key issue and potentially undermines justice. While benchmarks have been developed to evaluate progress, many rely on synthetic queries rather than realistic legal scenarios. Moreover, Canadian law remains underrepresented in existing evaluations. To address this gap, we introduce CanLegalRAGBench, a Canadian legal QA benchmark based on realistic queries and expert-annotated answers grounded in case law. Our evaluation shows that retrieval performance is sensitive to design choices and that open-source embedding models are competitive with closed source models. However, it also reveals the limitation of automatic evaluations that penalize systems for retrieving alternative relevant documents. We also find that generated answers often diverge from gold responses, either with hallucinations or by producing overly detailed or irrelevant content, with 8-29% of claims not being supported by the retrieved documents. We hope this benchmark will help drive continued progress in addressing limitations of legal RAG systems.
The rapid progress of large language models (LLMs) is shifting semantic search toward a question-answering paradigm, where users ask questions and LLMs generate responses. In high-stake domains such as law, retrieval-augmented generation (RAG) is commonly used to mitigate hallucinations in generated responses. Nonetheless, prior work shows that RAG systems, whether general-purpose or legal-specific, still hallucinate at varying rates, making fine-grained evaluation essential. Despite the need, existing evaluation frameworks for legal RAG systems lack the granularity required to provide detailed analysis of retrieval and generation performance separately. Moreover, current benchmarks are largely English-only and centered on legal expert queries, overlooking non-expert needs. We introduce ClaimRAG-LAW, a comprehensive dataset for legal RAG that supports French and English, targets both experts and non-experts, and includes diverse question types reflecting realistic scenarios. We further apply a fine-grained evaluation framework of state-of-the-art legal RAG systems, revealing limitations in retrieval, generation, and claim-level analysis in the legal domain.
Large language models have shown strong performance across a range of legal tasks, but existing benchmarks rarely evaluate the ability to take and defend a legal position, reason under incomplete information, or synthesize multiple statutory provisions. This gap is particularly pronounced for Canadian law, which remains underrepresented in legal NLP. We introduce GRACE (Grounded Reasoning Adversarial Canadian LEgal examples), a dataset of 1,915 question-reasoning-answer instances grounded in Canadian federal legislation. GRACE covers three reasoning modes: adversarial advocacy, uncertainty, and applied reasoning. We develop a pipeline that partitions raw statutory text, generates scenario-based questions and reasoning, and filters examples through model-free citation verification and LLM-based quality auditing. As a proof of concept, we fine-tune CLeAR-4B (Canadian Legal Adversarial Reasoning), a lightweight model for grounded legal reasoning, and evaluate it against the unmodified Qwen3-4B base model in open- and closed-book settings. CLeAR-4B substantially improves agreement with teacher outputs and statutory citation behavior when the relevant act text is provided, while its grounding degrades sharply when the statute is withheld. These results suggest that GRACE can support the development of lightweight legal models that reason more effectively from supplied statutory text.
Graph-based Retrieval-Augmented Generation (GraphRAG) advances flat document retrieval by structuring knowledge as relational graphs, enabling more coherent and effective reasoning. However, applying it to specific domains like legal reasoning faces critical challenges. (i) Legal corpora are heterogeneous, containing multi-granular knowledge from cases, articles and interpretations. A flat knowledge graph cannot adequately differentiate between factual details, applied rules, and abstract principles, limiting accurate retrieval. (ii) Reliable legal judgment demands transparent, evidence-based reasoning. Traditional RAG passes retrieved context directly to an LLM without verification, resulting in opaque, error-prone reasoning. To this end, we propose LegalGraphRAG, a framework designed for reliable legal reasoning. Our approach introduces two core components: a hierarchical legal graph that hierarchically organizes legal sources to enable retrieval at appropriate abstraction levels, and a multi-agent system for reliable legal reasoning, where a Researcher retrieves candidate evidence, an Auditor rigorously verifies its validity against source documents, and an Adjudicator synthesizes the set of verified evidence to render a final judgment. Extensive experiments show that LegalGraphRAG achieves the state-of-the-art performance, outperforming existing GraphRAG baselines in accurate and trustworthy legal analysis. Our code, datasets and implementation details are available at https://github.com/XMUDeepLIT/LegalGraphRAG.