As businesses increasingly adopt AI-powered chatbots for customer service and communication, a new legal risk has emerged: what happens when your chatbot gives incorrect or misleading information?
A recent case in British Columbia has set a precedent that companies may be held legally liable for the misrepresentations made by their AI systems—even when those statements are automated and not manually reviewed.
In a detailed legal insight, McMillan LLP explores this case and the broader implications for businesses deploying chatbots and other generative AI tools. The ruling reinforces the need for organizations to ensure that AI-powered platforms are not only functional but also accurate, compliant, and monitored.
⚠️ Key Legal Takeaways:
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Your AI speaks for you
Statements made by a chatbot can be considered company representations, even if not written by a human agent. -
Liability is real
In this case, the court held the company liable for its chatbot’s misinformation, highlighting the risks of unmoderated AI communications. -
Compliance is critical
Businesses must implement internal governance to ensure chatbot accuracy, including protocols for reviewing AI-generated responses and escalation pathways.
Whether you’re already using chatbots or planning to adopt AI communication tools, this legal development should prompt a review of your risk management practices.
For tailored legal advice on managing liability in the age of AI, contact McMillan LLP directly or connect with us at PrivacyRules and we’ll ensure you get the guidance you need.