Reading Comprehension

PT139 · S2 · P4 · Q25 Contingency Fees in Western Australia

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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.

Topic

The Western Australia Law Reform Commission's recommendations for contingency-fee arrangements in legal cases and their implications.

Framework

Challenge Position

Main Point

The Law Reform Commission's proposal to allow contingency-fee arrangements only as a last resort and only for financially needy clients is overly restrictive, burdensome for lawyers, and unfair to other clients; there are good reasons to make such arrangements available more broadly. The Most Valuable Sentence: The final paragraph clearly summarizes the main critique, especially where it says,

P1: Background on the Recommendation

The passage starts by letting us know that Western Australia's Law Reform Commission has recommended introducing contingency fees—where lawyers only get paid if they win—in Western Australia, with the rationale that these fees are higher due to the lawyer's risk.

P2: Details and Restrictions of Proposed Arrangement

Here, the passage explains that the Commission is only recommending a specific kind of contingency fee (the "uplift" fee, which is a standard fee plus a bonus if the case is won), and only when other options are exhausted and the client can't otherwise afford to pay. These measures are supposed to prevent lawyers from exploiting the system and to keep compensation fair.

P3: Problems and Burdens for Lawyers

The author jumps in with criticism, pointing out that requiring lawyers to check the client’s finances before entering this type of arrangement makes things complicated and burdensome, because predicting all future costs in litigation is difficult.

25.

The phrase "gaining disproportionately from awards of damages" (near the middle of the second paragraph) is most likely intended by the author to mean

receiving a payment that is
Not Strong Enough
This sounds like something the author would agree is a true statement, but it doesn't capture the meaning behind the phrase in question. It is true that if the lawyer is getting paid unfairly high, then they are receiving a payment in excess of the cost of their services. But that's also true of the uplift fee arrangement. The lawyers who get "their normal fee + 20% of their normal fee are also getting paid more than the monetary value of the services rendered. Since this answer choice doesn't differentiate between the uplift fee that the LRCWA finds acceptable and the unfair alternative (where lawyers can gain a disproportionate share of the awards), it doesn't capture the meaning of how we're describing the alternative.
9% picked this
Correct
receiving a higher portion of
Why this is right
This is saying that the phrase essentially means that lawyers would be getting paid an unreasonably high portion, which seems like a good match for a "disproportionate share of awards". The uplift fee endorsed by the LRCWA is meant to compensate the lawyer for services rendered + that extra percentage for risk assumed (the lawyer is assuming risk, because if she doesn't win the case, she doesn't get paid). But keeping the uplift fee at a fixed percentage is meant to find the "fair" bonus amount the lawyer should get for assuming the risk of contingency payment. If there's weren't a fixed fee and lawyers could say, "I'll do this on a contingency basis, but if we win, I get 90% of the damages", then the lawyer would be getting an unreasonable slice of the pie.
Skill tested: Meaning in Context · how this choice captures the passage's function is the move to repeat next time.
71% picked this
receiving a higher proportion of
Out of Scope
Out of Scope: client's sense of fair This is a tough answer to get rid of, since a lawyer getting 90% of the damages would probably have a client who thinks, "Hey, that seems unfairly high." But we have to judge these answers from the context in which they appeared. The LRCWA is not saying anything about clients perceived sense of "fairness" (for all we know, clients think the uplift fee is already unfair). The LRCWA seems to have its own standards of what "just compensation to plaintiffs" would be, and is mandating this one style of uplift fee to make sure that just compensation is not eroded. Essentially, this answer loses to (B) because "clients' perception of fairness" is just more out of scope than is anything discussed in (B).
8% picked this
receiving a payment that is
Doesn't Distinguish From Uplift
This is just like (A), in the sense that it offers a true statement, but not one that conveys how "gaining disproportionately / eroding just compensation" is an alternative to the uplift fee the LRCWA endorses. Whether you're going with the fixed uplift fee or the potentially unfair unrestricted-surcharge, the lawyer will always be receiving more payment than if they had lost the case. If the client's case is unsuccessful, the lawyer gets $0 in a contingency fee arrangement. So the fact that the lawyer gets more than $0 when the case is successful is not what the passage means by "gaining disproportionately from awards of damages".
4% picked this
receiving a higher proportion of
Out of Scope: Judge/jury's intent
This answer feels the same as (C) did. If a lawyer is getting an unfair slice of the winnings from a case, it is probably true that the client will think it's an unfairly high proportion and the judge/jury will probably think, "hey, we didn't want the lawyer to get that much". But just like (C), there's no context in the passage for talking about what the judge or jury intended. We only have the context of what the LRCWA would find unpalatable or a threat to just compensation for plaintiffs.
8% picked this

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