PT139.S2.P4.Q26 > Analytics

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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.

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.

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.

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Critique · Too onerous for lawyers

Requires lawyers to investigate client's financial circumstances and estimate probable cost of litigation.

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Critique · Unfair; limits freedom of contract

Why should contingency-fee agreements be available to only the least well-off clients?

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.

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

26.

According to the passage, the ███████ ██████ ███████████ ████ ███████████████ ██████████

Question Type

Stated

We’ll find the answer to this Stated question in P2, where the author explains the LRCWA’s recommendations for contingency-fee agreements. The LRCWA recommends the uplift fee, and says that contingency-fee agreements must meet two requirements: they can only be used as a last resort and lawyers must know that the client can’t pay the normal fee.

be used only ████ ██ ██ ██████████ ██ █████ ████ ████ ████████████ ████ ████████ ████████ █████████ ███ ██████████ ██ █████ █████

The author says at the end of the passage that it’s reasonable to think contingency-fee agreements increase lawyers' diligence and commitment. But this is not one of the LRCWA’s recommendations for contingency-fee agreements.

be used only ██ █████ ██ █████ ███████ ███ ████████ ██ ██ ███████ ████████ ███████

This is not stated in the passage. The author never mentions cases with especially high damage awards.

be used if ███ ██████ ██ ███ ███████ ████ ███ ██████ ███████ ██ ████ █ ███████ █████ ███ ███ ████████ ███████ ███ ██ ███ ████ ████ ██ ██ ████████████

(C) provides a sufficient condition: the agreement should be used if a lawyer is not certain that the client could pay. But the LRCWA report gives a necessary condition: the agreement should be used only if the lawyer is certain the client cannot pay.

20%

not be used ██ █████ ██ █████ ███████ ████ ██ ███████████ ██ ███████████

This is stated here. The LRCWA report says contingency-fee agreements should only be used as a last resort, when no other option works. In other words, they shouldn’t be used if another arrangement is possible.

68%

not be used ██████ ██ █████ █████ ███ ██████ ██ ██████████ ████ ████ ███ ██████ ████ ███ ███████ ████████████ █████ ██ █████ ███ ████████ ████

This says that contingency-fee agreements should only be used in cases where the lawyer thinks that the damage awards will cover the lawyer’s fees. This is not stated in the passage. In fact, the LRCWA says that the lawyer must know that the client can’t pay the normal fee “in the event that sufficient damages are not awarded.”

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PrepTest 139 - Section 2 - Passage 4 - Question 26

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PrepTest 139 - Section 2 - Passage 4 - Question 26

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