Air Canada chatbot invents bereavement fare policy; B.C. tribunal holds airline liable

Est. Damage ~$590

Attribution Anonymous

Independent project · aggregated from public reports and may be unverified — see the primary source below · not affiliated with or endorsed by any company or product named.

Incident Summary

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.

Case Analysis

Verified Facts

Air Canada's chatbot gave incorrect information to a BC man identified as Mr. Moffatt regarding the airline's rebate/bereavement fare policy
The BC Civil Resolution Tribunal ruled that Air Canada is responsible for its chatbot's mistaken statements
The incident cost Air Canada approximately $800 CAD in compensation ordered by the tribunal
Air Canada responded to the claim with boilerplate denials and did not provide documentary evidence to support its defense
The tribunal found Air Canada failed to prove a contractual defense because it did not supply the relevant contract portions
The case involved a bereavement discount policy that the chatbot misrepresented to the customer

Not Publicly Confirmed

The exact wording or specific claim the chatbot made about the bereavement fare policy
Whether Air Canada updated or removed the chatbot following the tribunal ruling
The full technical details of the chatbot system (vendor, model, deployment configuration)

Operational Lessons

→Companies are legally liable for factual misrepresentations made by their customer-facing AI chatbots; deploying AI does not transfer liability away from the operator
→Chatbots handling policy-sensitive topics (fares, refunds, eligibility) must be tightly grounded in current, accurate policy documents and tested specifically for edge-case queries
→Disclaimers buried in fine print are insufficient protection; if a system is presented as authoritative customer service, courts and tribunals will treat its outputs as binding representations
→Organizations deploying customer-facing AI agents should maintain human-review escalation paths for any commitment or policy interpretation the agent makes on their behalf

Primary Source

Air Canada is responsible for chatbot's mistake: B.C. tribunalbc.ctvnews.ca ↗

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