Setting the right price for injuries

Personal injury law in the UAE tries to strike a balance on workers’ and companies’ interests

Injured expatriate workers like Mohammed Abul Kashem, from Bangladesh, can get compensation under UAE law even if they cannot prove someone else was at fault. Photo: Ravindranath K / The National

Twenty years have passed since a US jury awarded Stella Liebeck $2.86 million (Dh10.5m) after being scalded by McDonald’s coffee. Her case, based in part on the fast-food chain selling coffee without adequately warning the contents would be hot, became a byword for frivolous lawsuits leading to mammoth payouts.

While Mrs Liebeck’s case is more complicated than it seemed – nearly all her award was punitive rather than compensatory damages – it represents a class of lawsuits that highlight the compensation culture in many developed countries. This clogs their legal systems and blights private companies and their insurers.

Even if few of these lawsuits lead to huge compensation awards, companies frequently settle out of court rather than take the risk. Equally important but less well publicised are the cases where a person is grievously injured but emerges from the legal process with nothing unless they can prove in court that it was caused by someone else’s negligence.

All this explains why the UAE takes a different approach to personal injury compensation. As The National reported yesterday, there are two aspects to this. One is that those who are injured can sue but the scale of the compensation, if the claim is successful, is set by the courts to prevent the huge awards of the kind awarded in the Stella Liebeck case. Compensation for injury, whether physical or psychological, is typically limited to two years' pay, but plaintiffs can also be awarded the cost of future care and loss of earnings.

However, the country also has a no-fault compensation scheme for those who are injured but are unable to demonstrate negligence. Few of the UAE’s millions of expatriate workers are aware of this scheme, which ensures that they will get something for significant injuries, even if nobody else was at fault. Compensation in this category is capped at Dh35,000 but considering how many workers in the UAE are the sole breadwinners for families living in countries without significant social welfare systems, its importance can scarcely be overstated.