Reading ComprehensionDifficulty: Medium

PT139 S2 P4 Q24 Explanation

Contingency Fees in Western Australia

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TopicsLocate DetailLaw

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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
24.

Which one of the following is given by the passage as a reason for the difficulty a lawyer would have in determining whether—according to the LRCWA’s recommendations—a prospective

Answer choices

  1. Length vs. Cost2% picked this

    The length of time that a trial may last is difficult to

    This is relevant, but a little off the mark. We're saying it will be hard to predict the cost of a trial in advance. The length of the trial could definitely affect the cost, but we'd prefer an answer that is directly answering the question.

  2. Not in Support Window6% picked this

    Not all prospective clients would wish to reveal detailed information about

    This might be true, but this is not cited as a reason why the author thinks lawyers will find it difficult to determine if a client is financially qualified for uplift.

  3. Correct75% picked this

    Some factors that may affect the cost of litigation can change after

    Why this is right

    This is our best available match for the final sentence of the 3rd paragraph: the final cost ... depends in large part on factors that may change as the case unfolds.

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

  4. Not in Support Window6% picked this

    Uplift agreements should only be used as a

    This doesn't resemble the last sentence of the 3rd paragraph at all, and it doesn't even sound like a difficulty lawyers would have in ascertaining whether their clients qualify for uplift. This seems more about whether an uplift should be used, assuming the client does qualify.

  5. Out of Scope: take time away11% picked this

    Investigating whether a client is qualified to enter into an uplift agreement would take time away from investigating the

    The beginning of the 3rd paragraph mentions that the lawyer will have to not only investigate legal issues but also the financial circumstances of the client. But it never says that doing one steals time from the other.

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