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.
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