Empathy is essential in healthcare communication. We introduce an annotation approach that draws on well-established frameworks for clinical empathy and breaking bad news (BBN) conversations for considering the interactive dynamics of discourse relations. We construct Empathy in BBNs, a span-relation task dataset of simulated BBN conversations in German, using our annotation scheme, in collaboration with a large medical school to support research on educational tools for medical didactics. The annotation is based on 1) Pounds (2011)’s appraisal framework for clinical empathy, which is grounded in systemic functional linguistics, and 2) the SPIKES protocol for breaking bad news (Baile et al., 2000), commonly taught in medical didactics training. This approach presents novel opportunities to study clinical empathic behavior and enables the training of models to detect causal relations involving empathy, a highly desirable feature of systems that can provide feedback to medical professionals in training. We present illustrative examples, discuss applications of the annotation scheme, and insights we can draw from the framework.