Compensation Claims In The UAE: How To Claim Damages And Financial Losses

A financial loss, damaged property, personal injury, or serious breach of contract can leave a person dealing with more than the immediate problem. There may also be medical expenses, lost income, repair costs, business losses, or emotional distress. UAE law allows an injured party to seek compensation in appropriate cases, but compensation is not automatic. The claimant must establish the legal basis of the claim and prove the loss suffered.

The main federal law governing civil compensation is Federal Decree-Law No. 25 of 2025 on the Civil Transactions Law, which came into force on 1 June 2026, and repealed the old Civil Transactions Law.

What Is a Compensation Claim in the UAE?

A compensation claim in the UAE generally involves a person asking another party to financially compensate them for damage caused by a wrongful act, contractual breach, negligence, or another recognised legal basis.

Article 245 of the Civil Transactions Law establishes the general principle that a person who causes harm to another may be required to compensate for that damage.

Compensation claims can arise from many situations, including:

• breach of contract, commercial or personal;
• property destruction;
• traffic accidents and injuries to persons;
• professional negligence;
• damages resulting from wrongful conduct;
• disputes involving construction or real estate;
• certain consumer disputes; and
• moral or reputational harm.

The exact rules will depend on how the damage occurred. Certain disputes are also governed by specialised legislation in addition to the Civil Transactions Law.

What Must Be Proven?

Simply saying that another person caused a loss is generally not enough. The claimant should be able to establish the act or breach complained of, the damage suffered, and the connection between the two.

The basic principle is that the claimant must prove the claim and the defendant has the right to contest the claim, according to Federal Decree-Law No. 35 of 2022 on Evidence in Civil and Commercial Transactions.

Evidence may be in the form of contracts, invoices, payment records, photographs, medical reports, expert reports, emails, messages, repair quotations, bank statements or other documents evidencing what happened and how the loss was calculated.

This is why keeping records from the beginning of a dispute can make a significant difference.

How Is Compensation Calculated?

There is no standard amount payable in every civil claim.

Under Article 339 of the Civil Transactions Law, where compensation has not already been fixed by law or contract, the court may assess compensation according to the damage actually suffered.

Contracts may also contain clauses that specify compensation payable if a party breaches an obligation. Article 340 recognises that contracting parties may agree in advance on an amount of compensation, subject to the rules governing such contractual provisions.

The amount written in a claim should therefore have a reasonable evidential basis rather than being an arbitrary figure.

Claim for Moral Harm

UAE law does not limit compensation only to direct financial losses.

Article 254 expressly recognises moral harm. This may include harm involving a person’s freedom, honour, dignity, reputation, social standing, or financial standing. The provision also allows compensation in certain circumstances for moral harm suffered by a spouse or relatives up to the second degree where an injured person suffers disability or death.

As Mrs. Awatif Al Khouri often highlights in the context of civil disputes, a strong compensation claim should focus not only on what went wrong, but also on clearly showing the actual consequences of that conduct. A well-organised claim is usually easier to assess than one based on broad allegations or unsupported figures.

Is There a Time Limit for Filing a Compensation Claim?

Time limits should never be overlooked.

For compensation arising from a harmful act, Article 258 provides a general period of three years from the date the injured person became aware of the harm and the person responsible, subject to further provisions and exceptions under the law.

Different limitation periods may apply to contractual, commercial, employment, insurance, property, or other specialised disputes. Anyone considering a claim should therefore check the applicable limitation period based on the particular circumstances instead of assuming that every compensation claim follows the same deadline.

Conclusion

In the UAE, compensation claims are meant to make good on actual injury, whether that be financial loss, damage to property, personal injury, breach of contract or qualifying moral injury. The actual damage suffered is of great importance to the success of a claim.

The practical starting point for residents, expatriates and businesses is to keep documents, assess losses carefully, identify the responsible party and check any applicable time limit before taking action.

As Mrs. Awatif Al Khouri emphasises, compensation cases are decided on the details. Knowing what you can legally claim and making the evidence to support that claim clear can put an injured party in a much stronger position when seeking a claim for compensation under UAE law.

FAQ’s

1. What is a compensation claim in the UAE?

A compensation claim is a legal request for monetary damages arising from loss, injury, property damage, breach of obligation or other wrongful conduct. The claimant generally needs to establish the harm suffered and the connection between the other party’s conduct and that harm.

2. What types of damages can be claimed in the UAE?

Depending on the circumstances, a claimant may seek compensation for financial losses, property damage, personal injury, lost income and certain other forms of material or moral harm recognized under UAE law.

3. What evidence is needed for a compensation claim in the UAE?

Useful evidence may include contracts, invoices, payment records, photographs, medical reports, expert reports, correspondence, police or court records and documents showing the amount of financial loss suffered.

4. How is compensation calculated in the UAE?

The amount depends on the nature and extent of the proven damage. Courts may consider the actual financial loss, supporting evidence, the circumstances of the case and the legal relationship between the parties when determining compensation.

5. Can I claim compensation for breach of contract in the UAE?

Potentially, yes. Where a contractual breach causes measurable loss, the affected party may be able to seek damages subject to the terms of the contract, the evidence available and the applicable UAE law.

6. Do I need a lawyer to file a compensation claim in the UAE?

Legal representation may be particularly useful where the amount claimed is significant, liability is disputed, expert evidence is required or the matter involves complex contractual, commercial or civil issues. A lawyer can assess the evidence, calculate the claim and represent the claimant during legal proceedings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.