Compensation in Injury Cases: Onshore

Accidental injuries are commonplace in any modern society. Such injuries are usually remedied by courts through compensation and damages awarded to the injured party, thus assigning some liability to the injurer, whether such injury was caused by a direct act or an indirect one.

There are two legal systems in Dubai, the onshore courts which follow the civil laws of Dubai and the UAE, and the courts of the Dubai International Financial Centre (DIFC) which have their own civil laws (although they follow criminal laws of Dubai and the UAE).

The onshore courts in Dubai are guided by provisions of the Federal Law No. 5 of 1985 promulgating the Civil Transactions Law, in their determination of compensation for accidental injuries. Chapter 3 of this Law deals with torts and states that “the author of any tort, even if not discerning, shall be bound to repair the prejudice”.

It’s interesting to note that although Article 292 provides for lost profit to be compensated, in application, it is rarely awarded. However, the courts in Dubai award damages or compensation for moral harm. Moral harm includes trespassing another’s freedom, honor, dignity, reputation, social standing or financial position.

There is no standard criteria or fixed rule in relation to how much compensation should be awarded in such cases, and the amount of compensation is usually at the discretion of the Court. Physical and material damages, moral damages, loss of earnings, loss of opportunity and potential future damages are all heads of damages recognized and generally considered by the Courts while determining the amount of compensation to be awarded:

• Material and Physical Damages:Physical damage is assessed as any bodily injury sustained by a person. Material damage is any loss suffered by a person because of such bodily injuries. Material damage should be substantiated with documentation such as hospital and medical bills showing treatment undergone by a person for his injury and include reports of an expert to determine the extent and percentage of permanent disability suffered. However once physical damage is proved, courts will award compensation even if no material damages have been incurred by the person.
• Moral damages:The Courts have consistently held that moral damages can include damages or compensation for harm to the honor, dignity or reputation of a person, and can also include harm to a person’s financial standing. In practice though, the Courts award nominal amounts when it comes to moral damages or indirect damages.
• Loss of earnings: Article 292 of the Civil Transaction Law makes it amply clear that loss of profit or earnings is to be taken into consideration by the Courts, however it must be shown that such loss of profits or earnings is a natural consequence of the harm suffered by the person. Therefore, a person could potentially be compensated for lost profits or loss of earning by the Courts, however the Courts do not follow a forensic approach when deciding such loss of earnings, even when provided with figures and evidence (the way courts in the USA or Europe might do), i.e., to use current earnings and account for the loss of potential future earnings in their determination. The assessment of loss of potential future earnings is solely at the discretion of the Courts, and they may be guided by various factors in doing so. However, in granting compensation for loss of earnings, the Courts tend to be slightly more lenient and generous where the victim or injured person is the sole breadwinner of the family.
• Loss of opportunity: While loss of opportunity and loss of earnings are closely linked, loss of earnings necessarily involves the loss of money. In contrast, loss of opportunity may involve both the loss of money and the loss of moral opportunity. Sometimes, loss of opportunity can be interlinked with loss of earnings. An example of this is where the loss of opportunity to use a residential property as a result of a contractor’s failure to build the property on time can result in a loss of opportunity (to live in the property) and loss of earnings (by renting the property). In determining loss of opportunity, Courts have been seen to take the same approach as with loss of earnings- such loss must be a natural consequence of the harm suffered and be reasonably justified to be awarded.
• Potential future damages: The UAE law does not provide for future damages. However, in practice, the Courts have awarded potential future damages where it has been proven that those expenses will definitely be incurred. In a 2009 decision, the Dubai Court of Cassation refused to compensate the expenses which may be incurred by a claimant in respect of continuous future treatment for an injury. Where a person can prove that they will necessarily have to undergo future medical treatment, the Court may find reason to award potential future damages.

It should be noted that there is no forensic method of calculation which Courts are required to follow when assessing future damages. The Courts are only required to show that all heads of claim have been considered when assessing the quantum of damages; the Courts are not obliged to provide the basis of its calculation, or to break down the award into separate heads of claim. Notwithstanding this, a claim for loss which occurs at a future point could constitute a new cause of action. In practice, Courts sometimes appoint an expert, who will give a report on the facts or a mix of facts and law. Courts tend to rely on the report rendered by the expert in such cases in determining the compensation to be awarded.

Conclusion

In a claim for compensation, the burden of proof lies on the claimant; thus, the claimant must show the Court, through furnishing solid and sufficient supporting documents evidencing the actual damages sustained, that his claim against the defendant should be successful. The claimant must also prove the causal link between the fault/action/inaction of the defendant, and the damages sustained by the claimant. The claimant must necessarily show the Courts that the damages sustained were caused directly or indirectly by the party causing such damage. It is interesting to note that in their assessment of damages, Courts are not obliged to provide the basis of their calculation or a breakdown of the award into separate heads of claim. Therefore, the award of compensation is at the discretion of the Court and could be vastly different from the actual amount claimed by a Claimant.

Article authored by Swati Soni, Associate and Hadiel Hussien, Associate.