In a recent groundbreaking ruling, the B.C. civil resolution tribunal sided with Jake Moffatt, a passenger who challenged Air Canada’s refusal to honor a bereavement fare discount mistakenly promised by the airline’s online AI-powered chatbot.
This case highlights the legal challenges that companies face as they increasingly rely on artificial intelligence for customer service.
Moffatt had booked a flight to Toronto to attend his grandmother’s funeral in 2022, following advice from Air Canada’s chatbot that he could apply for a bereavement fare discount after purchasing a full-price ticket.
However, when he tried to claim the discount after his flight, an Air Canada representative informed him that the application for the discount could not be made retroactively. The airline later claimed that it was not responsible for the chatbot’s error, suggesting that the AI system operated as a separate legal entity.
Tribunal member Christopher Rivers found this argument by Air Canada to be “remarkable,” emphasizing that the airline owed a duty of accuracy to its customers. He stated that “The applicable standard of care requires a company to take reasonable care to ensure their representations are not misleading.” Rivers further criticized the airline’s stance, stating, “It should be obvious to Air Canada that it is responsible for all the information on its website.”
Moffatt informed the tribunal that the total cost of his round-trip ticket was $1,640, while the promised bereavement fare amounted to approximately $760, resulting in an $880 discrepancy. He also provided screenshots of his conversation with the chatbot when requesting a partial refund. Despite this evidence, Air Canada claimed that the chatbot’s advice was “misleading” and denied Moffatt’s refund request.
Gabor Lukacs, president of the Air Passenger Rights consumer advocacy group, praised the decision as “cutting edge” and a significant win for consumer rights.
Ultimately, this ruling emphasizes that companies like Air Canada are responsible for information from their AI chatbots. The company has stated it will comply with the tribunal’s ruling.
