Air Canada ordered to honor a chatbot’s advice in legal battle

February 18, 2024
Air Canada AI

Air Canada has been ordered to comply with a refund policy mistakenly created by its chatbot.

This case began when Jake Moffatt, in the throes of grief over his grandmother’s passing, consulted Air Canada’s AI chatbot system to understand the company’s bereavement fare policy.

The chatbot told him that he could book his flight and then apply for a special discounted rate within 90 days after booking.

But, this information was wrong because Air Canada’s actual policy says that you can’t get a refund for bereavement travel after you’ve booked your flight.

This information directly conflicted with Air Canada’s actual policy, which clearly states that refunds for bereavement travel are unavailable after the flight has been booked. 

The chatbot specifically stated, “If you need to travel immediately or have already traveled and would like to submit your ticket for a reduced bereavement rate, kindly do so within 90 days of the date your ticket was issued by completing our Ticket Refund Application form.” 

This set the stage for the ensuing legal battle.

Air Canada argued that the chatbot, as an autonomous entity, was responsible for the misinformation, thereby absolving Air Canada of liability. This argument was met with skepticism by the tribunal.

Christopher Rivers, the tribunal member who presided over the case, critiqued Air Canada’s stance, stating, “Air Canada argues it cannot be held liable for information provided by one of its agents, servants, or representatives—including a chatbot.”

He questioned the airline’s expectation for customers to verify the chatbot’s information against other sections of Air Canada’s website, pointing out the unreasonable nature of such an expectation.

The ruling in favor of Moffatt granted him a partial refund amounting to $650.88 CAD from his original fare of $1,640.36 CAD, along with compensation for additional damages, including interest on the airfare and tribunal fees. 

For those unfamiliar with bereavement fares, they’re special discounted airline ticket rates offered to passengers who are in a situation where they need to travel urgently due to the imminent death or recent passing of a close family member.

These fares are designed to offer some financial relief in times of personal emergency, recognizing the high cost of last-minute travel. Not all airlines offer bereavement fares, and those with specific policies around them, including eligibility criteria, the required proof of the emergency (like a death certificate or a letter from a funeral home), and the extent of the discount.

This demonstrates companies’ legal and ethical responsibilities when employing AI chatbots in customer service roles, emphasizing the need for accuracy and accountability in the information such digital tools provide.

$650 is a nominal value compared to what you could imagine if an AI system made poor investment advice, instructed someone to make a fraudulent transaction, etc. 

Air Canada has previously embarked on an AI “experiment” to reduce the workload on its call centers during periods of high demand, such as weather-related flight disruptions. 

Mel Crocker, Air Canada’s chief information officer, had envisioned this customer service handling complex customer service issues. That might need a rethink. 

Other companies will now think twice before entrusting AI with legal advice. 

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Sam Jeans

Sam is a science and technology writer who has worked in various AI startups. When he’s not writing, he can be found reading medical journals or digging through boxes of vinyl records.

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