Air Canada chatbot invents bereavement fare policy; B.C. tribunal holds airline liable
A passenger identified as Mr. Moffatt interacted with Air Canada's customer-facing chatbot while seeking information about the airline's bereavement fare discount — a reduced-rate policy offered to travelers dealing with a death in the family. The chatbot provided incorrect information about the rebate policy, leading Moffatt to rely on that information and take a flight under the belief he could later claim the discount. When Air Canada refused to honor the chatbot's representation, Moffatt filed a claim with British Columbia's Civil Resolution Tribunal. Air Canada's defense strategy was notably weak: the airline submitted only a boilerplate Dispute Response denying 'each and every' allegation without providing any supporting documentary evidence, and failed to produce relevant contract terms it later tried to invoke as a defense. The tribunal member found that Air Canada had not proven a contractual defense and had offered no evidence to contradict Moffatt's account. The tribunal ruled that Air Canada was legally responsible for the chatbot's incorrect statements — rejecting any notion that the chatbot was a separate legal entity or that its outputs were disclaimed — and ordered the airline to compensate Moffatt. The total cost to Air Canada was approximately $800 CAD. The ruling established a notable precedent: a company deploying a customer-facing AI chatbot cannot escape liability for that chatbot's factual misrepresentations simply by arguing the system is autonomous or unpredictable.