Reading ComprehensionDifficulty: Hard

PT139 S2 P4 Q22 Explanation

Contingency Fees in Western Australia

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Passage

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. Contingency-fee agreements call for payment only if the lawyer’s risk of financial loss, such charges generally exceed regular fees.

Although there are various types of contingency-fee arrangements, the LRCWA has recommended that only one type be introduced: “uplift” fee arrangements, which in the case of a successful outcome require the client to pay the lawyer’s normal fee plus an agreed-upon additional percentage of that fee. This restriction is intended to prevent is financially unable to pay the fee in the event that sufficient damages are not awarded.

Unfortunately, under this recommendation, lawyers wishing to enter into an uplift fee arrangement would be forced to investigate not only the legal issues affecting any proposed litigation, but also the financial circumstances of the potential client and the probable cost of the litigation. This process would likely be onerous for a number may change as the case unfolds, such as strategies adopted by the opposing side.

In addition to being burdensome for lawyers, the proposal to make contingency-fee agreements available only to the least well-off clients would be unfair to other clients. This restriction would unjustly limit freedom of contract and would, in effect, make certain types of litigation inaccessible to middle-income people or even wealthy people who it is reasonable to assume that such arrangements increase lawyers’ diligence and commitment to their cases.

What this question is testing

Locate Detail

Your task

Pin down exactly what the question asks about the passage — a detail, the author's view, the structure, or the main point — before looking at the choices.

Common trap

Answers that restate a true detail from the passage but don't answer the specific question being asked.

Winning move

Anticipate the answer in your own words from the passage, then find the choice that matches that prediction.

Reading along? Open the full official question in LawHub — we show a fragment here and keep the reasoning in our own words.

The question
22.

The passage states which one of

Answer choices

  1. Correct57% picked this

    Contingency-fee agreements serve the purpose of transferring the risk of pursuing a legal action from the

    Why this is right

    In the final paragraph, the author says midway: The primary reasons for entering into contingency-fee agreements hold for all clients. First, they X. Second, they [contingency-fee agreements] shift the risk of not recovering the costs of a legal action from the client to the lawyer. If this is one of the two "primary reasons" for entering into contingency-fee agreements, then we can say contingency-fee agreements "serve this purpose".

    Skill tested: Locate Detail · how this choice captures the passage's function is the move to repeat next time.

  2. Unstated22% picked this

    Contingency-fee agreements of the kind the LRCWA's report recommends would normally not result in lawyers being paid larger

    This is supported, since the 2nd paragraph says that the LRCWA restricts people to the agreed-upon uplift, in the hopes of preventing lawyers from gaining disproportionately from awards of damages. This would be a great answer on a Most Supported question stem like, "Which of the following would the author be most likely to agree with". But this was a Must Be True question stem that asked for what the passage actually said.

  3. Out of Scope: likely implemented4% picked this

    At least some of the recommendations in the LRCWA's report are likely to be incorporated into the legal system in

    The passage never discusses the likelihood of any of the LRCWA's recommendations being implemented, only the potential causal effects were they to be implemented.

  4. Unstated: not affect diligence3% picked this

    Allowing contingency-fee agreements of the sort recommended in the LRCWA's report would not affect lawyers' diligence and

    "Diligence and commitment" are only stated in the final sentence, which is about all contingency-fee arrangements. The sort of contingency-fee arrangement that LRCWA's report recommends is the uplift style in which the lawyer wins an agreed upon percentage in addition to their normal fee, if they win the case. That is discussed in the beginning of the 2nd passage. The author never draws a straight line or states her causal opinion of how that specific type of contingency-fee arrangement does or doesn't affect diligence and commitment.

  5. Too Strong: usually14% picked this

    Usually contingency-fee agreements involve an agreement that the fee the lawyer receives will be an agreed-upon percentage

    The beginning of the 2nd paragraph merely says that the LRCWA is recommending this type of contingency-fee arrangement (the agree-upon uplift). It never says that more than 50% of contingency-fee agreements are currently of that style.

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