PT139.S2.P4.Q22

PrepTest 139 - Section 2 - Passage 4 - Question 22

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P1

In October 1999, the Law Reform Commission of Western Australia (LRCWA) issued its report, "Review of the Civil and Criminal Justice System." Buried within its 400 pages are several important recommendations for introducing contingency fees for lawyers' services into the state of Western Australia. ███████████████ ██████████ ████ ███ ███████ ████ ██ ███ ██████ ██ ██████████ ██ ███ █████ ███████ ██ ███ ████████ ████ ██ █████████ █████ ████ ███████ █████████ ██████ ███████ █████

Context · LRCWA introduced contingency-fee agreements
These are agreements where a lawyer is paid only if the case is successful. Because of the higher risk involved, contingency fees tend to be higher than regular fees.
P2

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LRCWA recommends uplift Fee · A type of contingency fee
"Uplift" in the sense that a lawyer's regular fee will be paid plus a fixed additional percentage.
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LRCWA Rationale · Prevent lawyers from disproportionate gain
And hence safeguards just compensation to plaintiffs.
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LRCWA Recommendation Details · Two requirements for uplift fees
1. This contingency-fee arrangement must be used only a last resort; 2. The lawyer must know that the client is unable to pay normal fee.
P3

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Critique · Too onerous for lawyers
Requires lawyers to investigate client's financial circumstances and estimate probable cost of litigation.
P4

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Critique · Unfair; limits freedom of contract
Why should contingency-fee agreements be available to only the least well-off clients?
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Critique · Main reasons for contingency-fee agreements apply to everyone
1. to provide a way to finance litigation; 2. to shift risk of loss to lawyers.
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Critique · Contingency-fee agreements better align interests
It gives lawyers skin in the game and so should increase their diligence and commitment.
Passage Style
Critique or debate
Show answer
22.

The passage states which one ██ ███ ██████████

a

Contingency-fee agreements serve ███ ███████ ██ ████████████ ███ ████ ██ ████████ █ █████ ██████ ████ ███ ██████ ██ ███ ███████

The author explicitly states here that contingency-fee agreements shift financial risk from the client to the lawyer.

58%
b

Contingency-fee agreements of ███ ████ ███ ███████ ██████ ██████████ █████ ████████ ███ ██████ ██ ███████ █████ ████ ██████ ████ ████ ████ ████████

This is not stated in the passage. In P2, the author says that the uplift fee is “intended to prevent lawyers from gaining disproportionately from awards of damages.” But he never addresses how much lawyers deserve to get paid.

22%
c

At least some ██ ███ ███████████████ ██ ███ ███████ ██████ ███ ██████ ██ ██ ████████████ ████ ███ █████ ██████ ██ ███ █████ ██ ███████ ██████████

This is not stated in the passage. The author never mentions whether the LRCWA’s recommendations are actually likely to be implemented. Instead, he focuses on critiquing the LRCWA’s uplift fee recommendation.

3%
d

Allowing contingency-fee agreements ██ ███ ████ ███████████ ██ ███ ███████ ██████ █████ ███ ██████ ████████ █████████ ███ ██████████ ██ █████ ██████

This is not stated in the passage. The author says here that contingency-fee agreements generally do affect lawyers’ diligence and commitment. He never suggests that the uplift fee arrangement would not affect their diligence and commitment.

3%
e

Usually contingency-fee agreements ███████ ██ █████████ ████ ███ ███ ███ ██████ ████████ ████ ██ ██ ███████████ ██████████ ██ ███ ████████ ████████

This is not stated in the passage. The uplift fee agreement involves the lawyer receiving her usual fee plus an additional agreed-upon percentage of that fee, not of the client’s damages. The author doesn’t say what contingency-fee agreements usually involve; he just says contingency fees tend to be higher than regular fees.

15%

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