When confronted with a problem like “your search engine imagined a case and cited it”, the next step is to wonder what else it might be making up, not to just quickly slap a bit of tape over the obvious immediate problem and declare everything to be great.
The other thing to be concerned about is how lazy and credulous your legal team are that they cannot be bothered to verify anything. That requires a significant improvement in professional ethics, which isn’t something that is really amenable to technological fixes.