Air Canada ordered to honour refund its chatbot wrongly promised

British Columbia’s Civil Resolution Tribunal ruled that Air Canada was liable for incorrect information its website chatbot gave a customer, ordering the airline to pay damages of CAD $650.88. The case, Moffatt v. Air Canada, turned on a bereavement fare.

Jake Moffatt had visited Air Canada’s site in November 2022, the day his grandmother died, to book a flight from Vancouver to Toronto. A chatbot on the site told him he could apply for the airline’s bereavement discount either before travelling or within 90 days after the flight. That was wrong: Air Canada’s actual policy required the discount to be requested before travel, a rule stated on a separate page the chatbot had linked to but that Moffatt was not required to have independently checked. Air Canada later refused to apply the discount retroactively, offering a partial goodwill credit instead.

Air Canada’s defence was that the chatbot was “a separate legal entity that is responsible for its own actions,” and that the airline could not be held liable for what it said. Tribunal member Christopher Rivers rejected that argument, finding no legal basis for treating a chatbot as distinct from the webpage that hosted it, and ruled that Air Canada owed Moffatt a duty of care it had failed to meet by publishing inaccurate information, whether that information came from a static page or an interactive tool. The tribunal called it a case of negligent misrepresentation.

The award itself was small, but the decision was widely cited by lawyers advising companies on AI deployment as a clear statement that a business cannot disclaim responsibility for its customer-facing chatbot’s statements by characterising the tool as independent of the company. Air Canada removed the chatbot from its website following the ruling.