Understanding the compensation differential in healthcareUnderstanding the compensation differential in healthcare

January 15, 2024

5 Min Read

The UAE legal system faces several significant challenges when dealing with medical malpractice claims, particularly when assessing appropriate compensation levels sought by plaintiffs. This article reviews and discusses the disparity ('the Compensation Differential') between the amount(s) of compensation sought by plaintiffs (‘the Claim Amounts’) when they pursue litigation through the local courts and the corresponding final amount(s) of compensation/damages awarded by the local courts (‘the Judgment Amounts’).

The remarkable extent of this compensation differential was highlighted in a study of a sample of 72 medical malpractice decisions in cases litigated in the local courts over the period 1 January 2012 to 31 December 2022 (‘the Study’) carried out by my colleagues in the Medical Malpractice Group at Galadari Advocates and Legal Consultants.

In my experience, the underlying causes contributing to the compensation differential significantly hinder or impede settlement discussions advancing towards consensus, agreement and settlement. This is regrettable and inefficient as — in many cases — particularly where liability is not reasonably defeasible - many defendants and their medical malpractice underwriters would readily agree to enter into amicable settlements at reasonable levels commensurate with the actual disability incurred thereby saving significant legal costs of litigation and minimising stress/management time involved in such cases for the plaintiffs and defendant hospitals and physicians alike.

The Study headlines reveal that there were no cases in the sample where the Claim Amount in full was awarded; in 12 per cent of cases, the plaintiff did not pursue a Claim Amount but instead asked the Court to assess damages. NB: There is no evidence to suggest that those plaintiffs asking the Court to assess damages fared better or worse than plaintiffs who sought a specified/stated Claim Amount. In 10 per cent of cases, the final Judgment Amount(s) were between 40 per cent to 50 per cent of the Claim Amount(s); and in 78 per cent of cases, the final judgment amount(s) were less than 15 per cent of the Claim Amount(s). Excessive Claim Amounts have always been a cause for concern in the sector but the study emphasises just how commonplace they are.

The question arises why do plaintiffs consistently claim excessive amounts and what can be done to address this? It is suggested that the 'Compensation Differential' may be explained by a combination of three factors:

Unrealistic expectations of plaintiffs

The subjective experience of pain, suffering, worry and distress of a plaintiff drives them to assess pain and suffering from their own viewpoint — rather than what is recoverable under UAE law. Plaintiffs often see their pain and suffering, etc. as being worth millions of dirhams whereas the court usually awards nominal amounts. In several cases where I have advised plaintiffs I have given a reasoned and accurate assessment of what a court is likely to award and my plaintiff clients have instructed me to pursue exorbitant amounts – only to have the actual judgment amounts in line with my assessments being pronounced and being upheld on appeal.

Unrealistic advice by plaintiffs’ lawyers

Local Courts of First Instance charge Court filing fees as a percentage of the Claim Amount – with a maximum/capped filing fees of Dh40,000 for a Claim Amount of approximately Dh700,000 or so. It appears that plaintiffs are being advised that given that the maximum/capped fee has been reached there is no disadvantage to claiming exorbitant amounts and provides a substantial margin to be reduced in any negotiation.

Moreover, in a civil law system as found in the UAE, there is no system of binding judicial precedent which presents challenges for lawyers advising plaintiffs, as they must provide accurate advice on matters of evidence and financial compensation while managing – perhaps — unrealistic expectations. Despite these challenges, providing accurate advice on likely Judgment Amounts is possible with a reasonable degree of due diligence, experience and research.

Incomplete or insufficient evidence speaking to quantum produced in court

The burden of proof in medical malpractice cases lies with the plaintiff, who must discharge his/her burden to prove their case by adducing documentary evidence to establish medical error and to justify their claim amount.

Whilst obtaining a supportive Medical Liability Committee/Higher Committee of Medical Liability Report is now reasonably established as the mandatory method of proving liability, i.e, whether or not there was a medical error or serious/gross medical error, it is frequently the case that plaintiffs do not adduce complete or — in the majority of cases — any documentary evidence speaking to their financial losses/damages.

I have defended cases where plaintiffs have claimed several tens of millions of dirhams without producing a single item of evidence speaking to quantum — no receipts, invoices or sick leave certificates. Although First Instance Courts have a wide discretion to assess damages – documentary evidence is still greatly valued by the judiciary - and lack of documentary evidence is usually the main reason of why excessive Claim Amounts fail to deliver commensurate Judgment Amounts.

How can the issue be addressed and is there a resolution available? Unfortunately, there is no obvious panacea that can solve the problem in every case. Having plaintiffs represented and advised by experienced and competent counsel — who are aware of what the UAE Courts regularly award — only addresses a part of the problem.

Lawyers still have to do what their clients instruct them to do. Voluntary mediation may provide answers in many cases provided that the third party mediator is knowledgeable on UAE medical malpractice particularly how quantum is assessed by the local Courts and is skilful in encouraging the parties to reach an acceptable compromise.

I suspect that the hospitals or their medical malpractice underwriters would have to pay for this service but I envisage that — provided all sides enter into the mediation in good faith — we may well see a considerable rise in the number of medical malpractice cases being dispensed with by consensus and amicable settlement.

Stephen Ballantine is the Senior Counsel and Head of Medical Negligence at Galadari Advocates & Legal Consultants. He will be speaking at the Surgery conference at Arab Health 2024.