Civil Law and UAE: Shift from Act-Based to Risk-Based Liability Systems

1. Introduction

The idea of a shift from act-based liability to risk-based liability describes an important development in modern civil liability.

Under a traditional act-based or fault-based model, the central question is:

What wrongful act did the defendant commit, and was there fault?

Under a more risk-oriented model, the court may ask broader questions:

Who controlled the dangerous activity or thing?

Who created or managed the relevant risk?

Was the risk reasonably foreseeable?

Who was in the best position to prevent the harm?

Did the defendant assume responsibility for the risk?

Did the claimant contribute to the loss?

Was the harm caused by an unavoidable external event?

UAE law does not completely replace fault-based liability with a general strict-liability system. Instead, the UAE framework contains several different liability mechanisms: general harmful-act liability, negligence/duty-based liability in jurisdictions such as the DIFC, special liability for dangerous things and machinery, contractual allocation of risk, insurance-based risk allocation, and sector-specific statutory liability.

The current mainland UAE Civil Transactions Law is Federal Decree by Law No. 25 of 2025, effective from 1 June 2026. Its Article 271 expressly provides liability for persons controlling things requiring special care to prevent harm, or mechanical machinery, subject to an exception for harm that could not be prevented. (UAE Legislation)

2. Meaning of Act-Based Liability

An act-based liability system concentrates on the defendant's conduct.

The traditional sequence is:

Act/omission → unlawfulness or fault → causation → damage → compensation

For example:

A driver negligently drives a vehicle, hits another person and causes injury.

The court examines:

What did the driver do?

Was the conduct wrongful or negligent?

Did that conduct cause the injury?

What damage resulted?

What compensation is appropriate?

This model works particularly well where human negligence is easily identifiable.

3. Meaning of Risk-Based Liability

A risk-based liability system focuses more heavily on the dangerous activity, object, relationship or allocation of risk.

The sequence can become:

Risk-producing activity → control/responsibility → foreseeable or realised risk → harm → allocation of loss

Fault remains important in many cases, but it is not always the sole organising principle.

Examples include:

dangerous machinery;

buildings;

animals;

vehicles;

industrial operations;

financial services;

professional services;

insurance;

construction;

automated systems;

digital assets;

autonomous technology.

The policy question becomes:

Who should legally bear the consequences of a risk that the defendant controlled, created, assumed or was specially positioned to prevent?

4. UAE Mainland Law: Evidence of Risk-Based Liability

The current Civil Transactions Law provides a particularly important example.

Article 271

Article 271 provides that a person who controls:

things requiring special care to prevent harm, or

mechanical machinery,

is liable for harm caused by those things or machines, except for harm that could not be prevented, subject to special legislation. (UAE Legislation)

This is significant because the legal inquiry is not simply:

"Did the controller personally commit a negligent act?"

Instead, the law attaches importance to:

control;

dangerous characteristics;

preventive responsibility;

ability to avert harm.

Therefore, Article 271 is a strong example of risk allocation operating alongside ordinary fault-based liability.

5. Preventive Liability

The risk-based approach is also visible in Article 272.

Where a person faces a threat of harm arising from:

a building;

an animal;

mechanical machinery; or

another thing requiring special care,

the person may require the owner or guardian to take necessary protective measures.

If those measures are not taken, judicial intervention may be sought, and in urgent circumstances protective measures may be taken directly at the person's expense, subject to the statutory conditions. (UAE Legislation)

This demonstrates an important conceptual movement:

Traditional model

Harm occurs → lawsuit → damages

Risk-oriented model

Danger exists → preventive measures → court intervention → harm potentially avoided

Thus, civil law is not merely compensatory; it can also become preventive.

6. General UAE Civil Liability Remains Important

The shift should not be misunderstood as abolition of traditional civil responsibility.

The general principle historically expressed in the UAE Civil Code was that harm caused to another gives rise to liability.

For example, in Union Properties PJSC v Trinkler & Partners Ltd & Others [2026] ADGMCFI 0010, the court considered Articles 282, 283 and 291 of the UAE Civil Code in analysing harmful acts, causation and multiple responsible parties. (BAILII)

The traditional framework therefore remains relevant.

The better description is:

UAE civil liability is becoming more pluralistic rather than simply abandoning act-based liability.

7. Risk, Causation and Foreseeability

Risk-based liability does not mean:

"Whenever something bad happens, the person controlling the activity is automatically liable."

Causation remains essential.

The DIFC Law of Obligations provides a useful illustration. Article 17 requires duty, breach and causation, while Article 10 addresses causation and Article 29 deals with losses partly caused by the injured party or another event for which that party bears the risk.

The DIFC courts explained these principles in Haya Spa LLC v Harper Real Estate / Hasan Real Estate [2016] DIFC SCT 150. (DIFC Courts)

Therefore:

Risk allocation ≠ automatic compensation

Instead:

Risk allocation + legally recognised responsibility + causation + legally recoverable loss

8. Six Important UAE Cases

Because the concept is developing through different liability regimes, the cases below include mainland/UAE-law contexts and DIFC cases. DIFC cases are persuasive or jurisdiction-specific, not binding precedents for mainland UAE courts.

9. Case Law 1: Union Properties PJSC v Trinkler & Partners Ltd

Union Properties PJSC & Anor v Trinkler & Partners Ltd & Others [2026] ADGMCFI 0010

This case is particularly useful because the ADGM Court considered UAE Civil Code provisions concerning harmful acts.

The court discussed:

Article 282 — liability for harm;

Article 283 — direct and consequential harm;

Article 291 — liability where multiple persons are responsible.

The case demonstrates that the UAE system continues to recognise a conduct-and-harm model, particularly where responsibility arises from an unlawful harmful act. (BAILII)

Significance

It therefore provides an important qualification:

The UAE has not abandoned act-based liability; risk-based mechanisms operate alongside it.

10. Case Law 2: Haya Spa v Harper Real Estate

Haya Spa LLC v Harper Real Estate / Hasan Real Estate [2016] DIFC SCT 150

The DIFC Small Claims Tribunal analysed negligence through:

duty of care;

breach;

causation;

damage.

The court explained that Article 17 of the DIFC Law of Obligations establishes liability where the defendant owes a duty, breaches it and causes loss.

It also considered:

foreseeability;

causation;

intervening events;

contributory responsibility;

foreseeability of damage;

mitigation.

(DIFC Courts)

Importance

This is a good illustration of a modern system in which liability is assessed through the risk created by conduct and the relationship between the parties, rather than merely identifying an expressly prohibited act.

11. Case Law 3: Shihab Khalil v Shuaa Capital

Shihab Khalil v Shuaa Capital PSC [2009] DIFC CFI 017

The DIFC Court explained that a negligence claim requires both:

want of due care; and

loss caused by that lack of care.

The court emphasised that the impact of the defendant's conduct is an essential component of the cause of action. (DIFC Courts)

Significance

The case demonstrates the move away from a purely formal inquiry into whether an act occurred.

The court instead considers:

conduct → care → consequence → loss

This is characteristic of risk-sensitive negligence law.

12. Case Law 4: Al Khorafi v Bank Sarasin-Alpen

Al Khorafi v Bank Sarasin-Alpen (ME) Ltd [2009] DIFC CFI 026

The case involved allegations of negligent investment advice and responsibility.

The court discussed the requirements for a duty of care under DIFC law, including:

reasonable foreseeability;

sufficient proximity;

whether it is fair, just and reasonable to impose the duty.

(DIFC Courts)

Significance

This is important for risk-based liability because the court does not simply ask whether the defendant committed a prohibited act.

It asks:

What risks could reasonably have been anticipated in this relationship, and should the defendant have been responsible for protecting the claimant against them?

13. Case Law 5: Aegis Resources v Union Bank of India

Aegis Resources DMCC v Union Bank of India (DIFC Branch) [2020] DIFC CFI 004

This case is especially useful for understanding contractual risk allocation.

Aegis argued that the bank had assumed the risk associated with fraudulent payment instructions and alternatively owed a duty of care.

The bank argued that the contractual arrangements allocated the relevant risk to Aegis.

The judgment also considered contributory negligence and voluntary assumption of risk. (DIFC Courts)

Significance

This illustrates an important feature of modern civil law:

Liability may depend not only on who performed the act, but also on who contractually or legally assumed the associated risk.

14. Case Law 6: Oheo Bank v Parker

Oheo Bank v Parker [2025] DIFC CA 006

The Court of Appeal considered claims involving regulatory breaches and negligence.

The judgment discussed the possible relevance of:

contributory negligence; and

voluntary assumption of risk.

(DIFC Courts)

Significance

The case demonstrates that risk can operate in both directions.

The defendant may bear responsibility for a risk, but the claimant's own conduct may also affect liability where the legal requirements for contributory negligence or assumption of risk are established.

Thus:

Risk-based liability does not necessarily mean defendant-only liability.

15. Case Law 7: Alawwal Capital v Rasmala

Alawwal Capital JSC v Rasmala Investment Bank Limited [2023] DIFC CFI 038

The dispute concerned representations concerning the risk characteristics of an investment.

The court described the elements of a misrepresentation/negligence claim, including:

statement;

assumption of responsibility;

reasonable reliance;

duty of care;

breach;

causation and loss.

(DIFC Courts)

The subsequent appellate treatment also confirmed the relevance of the DIFC statutory framework concerning duty of care and assumption of responsibility. (DIFC Courts)

Significance

Investment services illustrate why modern civil liability increasingly focuses on risk communication.

A professional who represents an investment as having particular risk characteristics may assume responsibilities concerning those representations.

16. Case Law 8: Qatar General Insurance v Emrgent Risk Solutions

Qatar General Insurance & Reinsurance Company QSPC v Emrgent Risk Solutions Limited [2026] DIFC CFI 053/2024

This recent DIFC case concerned reinsurance/retrocession broking.

The court considered both:

contractual duty; and

tortious duty.

The parties accepted that the broker had to exercise the skill and care expected of a reasonably competent insurance/reinsurance broker. The court found breaches concerning failure to procure appropriate cover and failure to notify the claimant about cancellation of coverage. (DIFC Courts)

Significance

This is an excellent example of professional risk-management liability.

The broker's responsibility was closely connected with its role in managing and communicating insurance risk.

17. From Fault to Risk: The Conceptual Change

The difference can be represented as follows:

18. Risk-Based Liability Does Not Mean Strict Liability Everywhere

This distinction is very important.

There are at least three different models:

A. Fault-based liability

The claimant generally has to establish wrongful or negligent conduct.

Example:

Professional negligently gives incorrect advice.

B. Risk/control-based liability

The law attaches responsibility to control of a dangerous object or activity.

Example:

A person controls mechanical machinery requiring special care, and the machinery causes harm.

Article 271 of the current Civil Transactions Law is an important example. (UAE Legislation)

C. Contractually allocated risk

The parties themselves determine who bears specified risks.

Example:

Insurance, indemnity, warranty, limitation clauses or contractual allocation of operational risk.

The Aegis case illustrates the importance of examining contractual allocation of risk. (DIFC Courts)

19. Risk-Based Liability and Technology

The shift becomes particularly important with:

artificial intelligence;

autonomous vehicles;

robotics;

algorithmic trading;

smart contracts;

drones;

industrial automation;

connected devices;

digital platforms.

Suppose an autonomous machine causes damage.

An act-based analysis may struggle to identify:

"Who committed the negligent act?"

A risk-based analysis asks:

Who designed the system?

Who deployed it?

Who controlled it?

Who maintained it?

Who had the ability to prevent the accident?

Was the system reasonably foreseeable to create the relevant risk?

Was there a warning or safety mechanism?

Was the operator negligent?

Did a third party intervene?

This makes risk-based reasoning particularly suitable for technologically complex environments.

20. Risk-Based Liability and Artificial Intelligence

The current UAE Civil Transactions Law does not establish a general comprehensive AI civil-liability regime.

However, Article 271's reference to things requiring special care and mechanical machinery provides an important conceptual foundation for dangerous technologies. (UAE Legislation)

The legal challenge is determining whether a particular AI-enabled system should be treated as:

an ordinary instrument;

dangerous machinery;

a product;

a service;

an agent-like technological system;

or a component of a human-controlled activity.

Therefore, future UAE litigation may increasingly involve risk classification rather than simply traditional fault analysis.

21. Risk Distribution Among Multiple Parties

Modern transactions frequently involve several participants:

Manufacturer → distributor → operator → service provider → insurer → consumer

A harmful event may result from contributions by several actors.

The legal question then becomes:

How should the loss be distributed?

The UAE framework recognises circumstances involving multiple responsible persons. Article 291 of the former Civil Code framework, considered in Union Properties, provides for proportional responsibility and permits joint or several liability in appropriate circumstances. (BAILII)

This supports a broader risk-distribution model.

22. Preventive Justice

One of the most important consequences of risk-based civil liability is the movement from:

Compensation after harm

toward:

Prevention before harm

Article 272 of the current Civil Transactions Law is particularly significant because it permits legal mechanisms aimed at preventing threatened harm from buildings, animals, machinery and other dangerous things. (UAE Legislation)

Thus civil law can operate in three stages:

Stage 1 — Risk identification

Is there a foreseeable danger?

Stage 2 — Risk prevention

Can reasonable measures prevent it?

Stage 3 — Loss allocation

If harm occurs, who should bear the resulting loss?

23. Role of Contributory Negligence

Risk-based liability must also account for the claimant's conduct.

For example:

A company operates dangerous machinery safely, but an employee deliberately disables several safety mechanisms.

The court may need to determine:

what risk the company controlled;

what risk the employee assumed;

whether the employer breached its own duty;

whether the employee's conduct contributed to the loss.

DIFC jurisprudence expressly recognises contributory negligence as relevant to reducing liability in appropriate negligence cases. Haya Spa illustrates this statutory approach. (DIFC Courts)

24. Contract and Risk Allocation

Contract law is another major component of the shift.

Commercial parties regularly allocate risks through:

indemnities;

warranties;

insurance requirements;

limitation clauses;

exclusion clauses;

force-majeure clauses;

performance guarantees;

liquidated damages;

termination provisions.

But contractual risk allocation remains subject to mandatory law and applicable public-policy restrictions.

Therefore:

Risk allocation by contract is not necessarily the same as exemption from liability.

The court must first identify the contractual allocation and then determine whether it is legally effective.

25. Insurance and Risk-Based Liability

Insurance represents one of the clearest examples of institutionalised risk allocation.

Instead of asking only:

"Who was at fault?"

insurance law often asks:

"Was the particular risk covered by the policy, and were the policy conditions satisfied?"

The recent Ahmed Mohamed Eid Al Yahad Al Zaabi v Al Buhaira National Insurance Company [2024] DIFC TCD 002 illustrates the importance of whether particular circumstances increased the risk and whether policy warranties concerning safety measures had been breached. (DIFC Courts)

This shows how risk can become the central organising concept even when the dispute ultimately concerns contractual insurance rights.

26. Risk-Based Liability and the Standard of Care

The risk-oriented model does not eliminate the standard of care.

Instead, the standard may be adjusted to the nature and magnitude of the risk.

For example:

The recent Qatar General Insurance v Emrgent Risk Solutions decision demonstrates how professional risk determines the relevant standard of care. (DIFC Courts)

27. Mainland UAE vs DIFC

The two systems should therefore not be treated as identical.

28. Is UAE Law Really Moving from Act-Based to Risk-Based Liability?

The most accurate answer is:

Yes, but only partially and through multiple mechanisms.

There is no single UAE statute announcing a complete replacement of fault-based liability with risk-based liability.

Instead, the development can be seen through:

special liability for dangerous things;

mechanical machinery liability;

preventive civil remedies;

professional duties of care;

contractual allocation of risk;

insurance;

contributory negligence;

regulatory duties;

technological risk;

causation and foreseeability analysis.

Consequently, the better legal description is:

A transition from a predominantly act-centred understanding of civil responsibility toward a multi-dimensional system combining conduct, fault, control, foreseeability, responsibility and risk allocation.

29. Practical Example

Imagine a factory uses an autonomous robotic machine.

The robot injures a visitor.

Act-based analysis

The court asks:

Who made the error?

Was the operator negligent?

Was there a wrongful act?

Did that act cause the injury?

Risk-based analysis

The court additionally asks:

Who controlled the robot?

Who installed it?

Who maintained it?

Was the machine inherently dangerous?

Were safety controls adequate?

Was the risk foreseeable?

Who could have prevented the accident?

Did the visitor ignore warnings?

Was there a manufacturing defect?

Was the risk contractually or statutorily allocated?

This second inquiry is much better suited to complex automated environments.

30. Advantages of Risk-Based Liability

1. Better protection against technological risks

Modern technologies can cause harm without a simple human mistake.

2. Greater emphasis on prevention

The law can encourage safety before accidents happen.

3. Better allocation of responsibility

The party controlling a risk may be better placed to prevent it.

4. Compatibility with insurance

Businesses can price and insure identifiable risks.

5. Greater relevance to complex commercial activities

Risk allocation is fundamental to construction, finance, shipping and insurance.

6. Recognition of systemic risks

Some harms arise from systems rather than one isolated act.

31. Potential Problems

Risk-based liability also creates difficulties.

A. Unclear boundaries

Courts must determine which risks should legally be allocated to which person.

B. Excessive liability

If liability is imposed merely because someone controlled an activity, legitimate commercial activity could become excessively risky.

C. Causation problems

A dangerous activity does not necessarily cause every loss occurring around it.

D. Technological uncertainty

AI and autonomous systems can create difficult questions concerning foreseeability.

E. Contractual uncertainty

Parties may dispute whether a contract actually allocated a particular risk.

F. Multiple responsible actors

Manufacturers, operators, insurers and service providers may all contribute to the same loss.

32. Key Legal Principle

The emerging UAE model can therefore be represented as:

ACT

↓

FAULT / DUTY

↓

RISK

↓

CONTROL + FORESEEABILITY

↓

CAUSATION

↓

LOSS

↓

ALLOCATION OF LIABILITY

This does not mean that fault disappears.

Instead, fault becomes one component of a wider liability architecture.

33. Exam-Ready Conclusion

The UAE civil-law system is not undergoing a complete replacement of act-based liability by strict risk-based liability. Rather, UAE law increasingly combines traditional harmful-act and negligence principles with risk allocation, control-based responsibility, preventive remedies, professional standards, contractual risk allocation and special liability for dangerous things and machinery.

The current Civil Transactions Law's Article 271 is particularly significant because it imposes responsibility on persons controlling things requiring special care or mechanical machinery, subject to the exception for harm that could not be prevented. Article 272 further demonstrates a preventive approach by allowing measures to avert threatened harm. (UAE Legislation)

DIFC jurisprudence provides additional examples through duty of care, foreseeability, assumption of responsibility, contributory negligence and contractual risk allocation, as seen in Haya Spa, Shihab Khalil, Al Khorafi, Aegis Resources, Oheo Bank, Alawwal Capital, and Qatar General Insurance. (DIFC Courts)

Quick Revision Formula

Traditional UAE liability:
Wrongful Act → Fault → Causation → Damage → Compensation

Emerging risk-sensitive model:
Risk → Control/Responsibility → Foreseeability → Prevention → Causation → Loss Allocation → Compensation

Core point: UAE civil law is becoming more risk-sensitive, preventive and responsibility-oriented, while traditional fault and harmful-act principles continue to operate.