AI in the Judiciary: Guardrails are Crucial After Air Canada Case; Understand the Risk

This Air Canada incident echoes the growing concern with the regulation of new technologies, similar to the Central Bank's (BC) recent attention to the financial sector, as demonstrated by the penalty to Genial and the disqualification of its CEO for irregular exchange practices. The negative trend in two of our recent articles on regulation and corporate default suggests an environment of increased regulatory scrutiny and growing operational challenges. Applying the 'Credit and Liquidity Cycles' lens shows us that, in a period of potential macroeconomic tightening or uncertainty, introducing uncontrolled operational risks, such as those from unsupervised AIs, can be particularly detrimental to companies' cash flow and liquidity.

The in-depth analysis reveals that the core of the issue lies not in AI itself, but in its implementation without due diligence. Air Canada, apparently, failed to establish clear protocols for the use of its chatbot, allowing it to operate with outdated or unverified information. This resulted in a flight promise that could not be fulfilled, generating direct consumer harm and, subsequently, a legal cost for the company. The lack of 'guardrails' can be compared to a company operating with a balance sheet without proper auditing: the risk of catastrophic errors is imminent, with the potential to quickly erode equity and credibility.

In the next 30 to 180 days, the scenario for companies using AI without adequate control tends to become more complicated. We can expect increased litigation in similar cases, with decisions that could set precedents. The upward trend in the dollar over 7 days (+1.58%) may increase the costs of importing technology and AI-related services, making the implementation of secure solutions even more expensive. In parallel, the accumulated inflation over 12 months, although slowing down to 4.44% (ref. 01/07/2026), still requires careful attention.