In passing I came across the following very good explanation of how a Judge is to weigh up and decided who to believe when 2 witnesses (in our context usually patient v doctor) give conflicting evidence on an important topic.

As well explained, this does not necessarily involve a conclusion someone is lying. In my experience this is not often a conclusion reached. Rather the Judge will generally make a conclusion that 1 witness’ accuracy is better than the others, even though both honestly believe they are telling the truth.

The quote is from a UK case: Onassis and Calerropolous v Vergiottis [1968] 21 Lloyds LR 403 at 431. [I have reformatted it to make it easier to read (I think)]:

"Credibility" involves wider problems than mere "demeanour" which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be.

Credibility covers the following problems:

1. First, is the witness a truthful or untruthful person?
    
2. Secondly, is he, though a truthful person, telling something less than the truth on this issue, or, though an untruthful person, telling the truth on this issue?
    
3. Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so, has his memory correctly retained them? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by overmuch discussion of it with others?

   [in my view the most useful passage]
   
   Witnesses, especially those who are emotional, who think that they are morally in their right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active.

   For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance.
    

4. And lastly, although the honest witness believes he heard or saw this or that, is it so improbably that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the creditability of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part.

Well summarised in my view (mentioned in the recent melanoma case: Coote v Kelly [2012] NSWSC 219).