In October 1999, the Law Reform Commission of Western Australia (LRCWA

Question

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
  (5)   recommendations for introducing contingency fees for
lawyers’ services into the state of Western Australia.
Contingency-fee agreements call for payment only if
the lawyer is successful in the case. Because of the
lawyer’s risk of financial loss, such charges generally
  (10)   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
  (15)   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 lawyers
from gaining disproportionately from awards of
damages and thus to ensure that just compensation to
  (20)   plaintiffs is not eroded. A further measure toward this
end is found in the recommendation that contingency-
fee agreements should be permitted only in cases
where two conditions are satisfied: first, the
contingency-fee arrangement must be used only as a
  (25)   last resort when all means of avoiding such an
arrangement have been exhausted; and second, the
lawyer must be satisfied that the client is financially
unable to pay the fee in the event that sufficient
damages are not awarded.

(30)   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
  (35)   and the probable cost of the litigation. This process
would likely be onerous for a number of reasons, not
least of which is the fact that the final cost of
litigation depends in large part on factors that may
change as the case unfolds, such as strategies adopted
  (40)   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
  (45)   limit freedom of contract and would, in effect, make
certain types of litigation inaccessible to middlei-
ncome people or even wealthy people who might not
be able to liquidate assets to pay the costs of a trial.
More importantly, the primary reasons for entering
  (50)   into contingency-fee agreements hold for all clients.
First, they provide financing for the costs of pursuing
a legal action. Second, they shift the risk of not
recovering those costs, and of not obtaining a
damages award that will pay their lawyer’s fees, from
  (55)   the client to the lawyer. Finally, given the
convergence of the lawyer’s interest and the client’s
interest under a contingency-fee arrangement, it is
reasonable to assume that such arrangements increase
lawyers’ diligence and commitment to their cases.     1 
 1. As described in the passage, the uplift fee agreements that the LRCWA’s report recommends are most closely analogous to which one of the following arrangements?

(A) People who join together to share the costs of purchasing lottery tickets on a regular basis agree to share any eventual proceeds from a lottery drawing in proportion to the amounts they contributed to tickets purchased for that drawing.
(B) A consulting firm reviews a company’s operations. The consulting firm will receive payment only if it can substantially reduce the company’s operating expenses, in which case it will be paid double its usual fee.
(C) The returns that accrue from the assumption of a large financial risk by members of a business partnership formed to develop and market a new invention are divided among them in proportion to the amount of financial risk each assumed.
(D) The cost of an insurance policy is determined by reference to the likelihood and magnitude of an eventual loss covered by the insurance policy and the administrative and marketing costs involved in marketing and servicing the insurance policy.
(E) A person purchasing a property receives a loan for the purchase from the seller. In order to reduce risk, the seller requires the buyer to pay for an insurance policy that will pay off the loan if the buyer is unable to do so.

2 
 2. The passage states which one of the following?

(A) Contingency-fee agreements serve the purpose of transferring the risk of pursuing a legal action from the client to the lawyer.
(B) Contingency-fee agreements of the kind the LRCWA’s report recommends would normally not result in lawyers being paid larger fees than they deserve.
(C) At least some of the recommendations in the LRCWA’s report are likely to be incorporated into the legal system in the state of Western Australia.
(D) Allowing contingency-fee agreements of the sort recommended in the LRCWA’s report would not affect lawyers’ diligence and commitment to their cases.
(E) Usually contingency-fee agreements involve an agreement that the fee the lawyer receives will be an agreed-upon percentage of the client’s damages.

3 
 3. The author’s main purpose in the passage is to

(A) defend a proposed reform against criticism
(B) identify the current shortcomings of a legal system and suggest how these should be remedied
(C) support the view that a recommended change would actually worsen the situation it was intended to improve
(D) show that a legal system would not be significantly changed if certain proposed reforms were enacted
(E) explain a suggested reform and critically evaluate it

4 
 4. 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 client was qualified to enter into an uplift agreement?

(A) The length of time that a trial may last is difficult to predict in advance.
(B) Not all prospective clients would wish to reveal detailed information about their financial circumstances.
(C) Some factors that may affect the cost of litigation can change after the litigation begins.
(D) Uplift agreements should only be used as a last resort.
(E) Investigating whether a client is qualified to enter into an uplift agreement would take time away from investigating the legal issues of the case.

5 
 5. The phrase “gaining disproportionately from awards of damages” (lines 18–19) is most likely intended by the author to mean

(A) receiving a payment that is of greater monetary value than the legal services rendered by the lawyer
(B) receiving a higher portion of the total amount awarded in damages than is reasonable compensation for the professional services rendered and the amount of risk assumed
(C) receiving a higher proportion of the damages awarded to the client than the client considers fair
(D) receiving a payment that is higher than the lawyer would have received had the client’s case been unsuccessful
(E) receiving a higher proportion of the damages awarded to the client than the judge or the jury that awarded the damages intended the lawyer to receive

6 
 6. According to the passage, the LRCWA’s report recommended that contingency-fee agreements

(A) be used only when it is reasonable to think that such arrangements will increase lawyers’ diligence and commitment to their cases
(B) be used only in cases in which clients are unlikely to be awarded enormous damages
(C) be used if the lawyer is not certain that the client seeking to file a lawsuit could pay the lawyer’s regular fee if the suit were to be unsuccessful
(D) not be used in cases in which another type of arrangement is practicable
(E) not be used except in cases where the lawyer is reasonably sure that the client will win damages sufficiently large to cover the lawyer’s fees

7 
 7. Which one of the following, if true, most seriously undermines the author’s criticism of the LRCWA’s recommendations concerning contingency-fee
agreements?

(A) The proportion of lawsuits filed by the least well-off litigants tends to be higher in areas where uplift fee arrangements have been widely used than in areas in which uplift agreements have not been used.
(B) Before the LRCWA’s recommendations, lawyers in Western Australia generally made a careful evaluation of prospective clients’ financial circumstances before accepting cases that might involve complex or protracted litigation.
(C) There is strong opposition in Western Australia to any legal reform perceived as favoring lawyers, so it is highly unlikely that the LRCWA’s recommendations concerning contingency-fee agreements will be implemented.
(D) The total fees charged by lawyers who successfully litigate cases under uplift fee arrangements are, on average, only marginally higher than the total fees charged by lawyers who litigate cases without contingency agreements.
(E) In most jurisdictions in which contingency-fee agreements are allowed, those of the uplift variety are used much less often than are other types of contingency-fee agreements.

RC Butler 2022  -  Practice Two RC Passages Everyday.   
Passage # 326 Date: 15-Aug-2022
 This question is a part of RC Butler 2022 .  Click here for Details

Source:   LSAT Official PrepTest 60   
 Difficulty Level:   700

pratiksha1998 · Answer

Hi, Can someone explain Q7? I thought option B is out of scope.

tanishsahu · Answer

option b is not out of scope it is very well weakening the criticism as it is saying that from past lawyers in Western Australia generally made a careful evaluation of prospective clients’ financial circumstances before accepting cases that might involve complex or protracted litigation. this weakens the criticism because criticism were saying that it will increase the cost of litigation but if it is already has been done by lawyers so how it will increase the cost , it will be same as in the past hope you will understand

Sajjad1994 · Answer

All of the wrong answers talk about arguments the author was making. Perhaps surprisingly, the author didn’t criticize uplift arrangements. Those were introduced on  lines 13-20 , without comment.

Instead,  paragraphs 3  and  4  only criticize the financial restrictions discussed in  lines 20-30.

The author spent all of  paragraph 3 (lines 30-40)  complaining that the requirement to investigate finances would force lawyers to do a lot of extra work.  (B)  says that lawyers were already doing that work anyway.

rahulk991 · Answer

Which one of the following, if true, most seriously undermines the author’s criticism of the LRCWA’s recommendations concerning contingency-fee
agreements? 
 (A)The proportion of lawsuits filed by the least well-off litigants tends to be higher in areas where uplift fee arrangements have been widely used than in areas in which uplift agreements have not been used.   The passage never mentions about the lack of access/ difficulty of access to law that is faced by the least well off. If there was a case in which the suits filed by middle income/higher income population were higher in areas where uplift arrangements were used, then that statement would've undermined the author's criticism. 
(B)  Before the LRCWA’s recommendations, lawyers in Western Australia generally made a careful evaluation of prospective clients’ financial circumstances before accepting cases that might involve complex or protracted litigation.   The passage clearly mentions that "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."If the lawyers were already investigating clients financials before, then the author's statement would have no value. 
(C) Out of scope, nothing about the opinions of clients is mentioned in the passage.
( D) The total fees charged by lawyers who successfully litigate cases under uplift fee arrangements are, on average, only marginally higher than the total fees charged by lawyers who litigate cases without contingency agreements. -   The passage is not concerned about the final fees charged. The main criticisms of the author were: that It would be burdensome for the lawyers to investigate the client's financial status and the probable cost the case would incur, that only low income people might have access based on the criteria for selection. So, even if the fees charged in both cases is same, It doesn't affect the author's criticism. 
 E)  Even if the contingency fee arrangements are used more than the regular ones, there is no info about the income class of people who benefit from the scheme. If only the lower classes are getting the benefit and not the middle/higher income class then the authors criticism will still remain valid .

B will be the best answer choice compared to the rest

varshas044 · Answer

1. As described in the passage, the uplift fee agreements that the LRCWA’s report recommends are most closely analogous to which one of the following arrangements?
 
(A) People who join together to share the costs of purchasing lottery tickets on a regular basis agree to share any eventual proceeds from a lottery drawing in proportion to the amounts they contributed to tickets purchased for that drawing. ------------- join together to share cost??? Lawyers are not putting any financial steak in a case with the plaintiff. Wrong analogy right there. ELIMINATE

(B) A consulting firm reviews a company’s operations. The consulting firm will receive payment only if it can substantially reduce the company’s operating expenses, in which case it will be paid double its usual fee. --------------------  this is exactly what a contingency arrangement it. You get the money if you are successful and you make more in this arrangement than you do otherwise. CORRECT.

(C) The returns that accrue from the assumption of a large financial risk by members of a business partnership formed to develop and market a new invention are divided among them in proportion to the amount of financial risk each assumed. ------------------ members of business partnership is wrong analogy. ELIMINATE.

(D) The cost of an insurance policy is determined by reference to the likelihood and magnitude of an eventual loss covered by the insurance policy and the administrative and marketing costs involved in marketing and servicing the insurance policy. ------------------- this is not conditional as is the contingency arrangement. ELIMINATE.

(E) A person purchasing a property receives a loan for the purchase from the seller. In order to reduce risk, the seller requires the buyer to pay for an insurance policy that will pay off the loan if the buyer is unable to do so. --------------- wrong analogy. Plaintiffs do not receive anything from the attorneys. ELIMINATE.

2. The passage states which one of the following?

(A) Contingency-fee agreements serve the purpose of transferring the risk of pursuing a legal action from the client to the lawyer. --------------------  yes, read 50 to 55. CORRECT  
 
(B) Contingency-fee agreements of the kind the LRCWA’s report recommends would normally not result in lawyers being paid larger fees than they deserve. -------------- actually it WOULD result in lawyers being paid larger than normal fee. ELIMINATE.

(C) At least some of the recommendations in the LRCWA’s report are likely to be incorporated into the legal system in the state of Western Australia. --------------- passage does not say that at all. ELIMINATE.

(D) Allowing contingency-fee agreements of the sort recommended in the LRCWA’s report would not affect lawyers’ diligence and commitment to their cases. ---------------- passage talks about diligence and commitment, but it says that contingency arrangement would actually make the lawyers more diligent and committed to their cases. ELIMINATE.

(E) Usually contingency-fee agreements involve an agreement that the fee the lawyer receives will be an agreed-upon percentage of the client’s damages. ------------------- line 13 to 17. The plaintiff will not pay the % of the damages received. They will pay the % of the agreed upon fee. So basically fee + % of the fee. ELIMINATE.

3. The author’s main purpose in the passage is to
 
(A) defend a proposed reform against criticism ----------------- nope, author is not defending the uplift arrangement. ELIMINATE

(B) identify the current shortcomings of a legal system and suggest how these should be remedied ---------author does not talk about the shortcomings or how to remedy them. ELIMINATE

(C) support the view that a recommended change would actually worsen the situation it was intended to improve ----------- no, author does not say that contingency arrangement will make the situation worse for plaintiffs. ELIMINATE.

(D) show that a legal system would not be significantly changed if certain proposed reforms were enacted -------------------- Passage is not focused on this. ELIMINATE.

(E) explain a suggested reform and critically evaluate it ------------  yes, this is what the passage has been doing as a whole. It talks about contingency arrangement and then evaluate it based on various grounds. CORRECT

4. 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 client was qualified to enter into an uplift agreement?

(A) The length of time that a trial may last is difficult to predict in advance. ------------ not given. ELIMINATE.

(B) Not all prospective clients would wish to reveal detailed information about their financial circumstances. ------------------- not given. ELIMINATE.

(C) Some factors that may affect the cost of litigation can change after the litigation begins. ----------  yes, refer to line 35 to 40. Lawyers find it difficult to assess the value of a case since the information unfold as the case progresses. CORRECT.  
 
(D) Uplift agreements should only be used as a last resort. ------------------- yes, but this is not a difficulty for the lawyers. ELIMINATE.

(E) Investigating whether a client is qualified to enter into an uplift agreement would take time away from investigating the legal issues of the case. ----------- it will take time, but passage does not indicate this as a difficulty for the lawyers. ELIMINATE.

5. The phrase “gaining disproportionately from awards of damages” (lines 18–19) is most likely intended by the author to mean
 
(A) receiving a payment that is of greater monetary value than the legal services rendered by the lawyer ------------------ passage does not refer to this. ELIMINATE.

(B) receiving a higher portion of the total amount awarded in damages than is reasonable compensation for the professional services rendered and the amount of risk assumed ---------------  yes, author’s talks about the lawyers assessing the case for the assumed risk and finances so that the fee is justified to the plaintiff. CORRECT

(C) receiving a higher proportion of the damages awarded to the client than the client considers fair ------------ passage does not talk about what client considers fair. ELIMINATE.

(D) receiving a payment that is higher than the lawyer would have received had the client’s case been unsuccessful ----------------- not mentioned. ELIMINATE.

(E) receiving a higher proportion of the damages awarded to the client than the judge or the jury that awarded the damages intended the lawyer to receive ------------ not at all mentioned. ELIMINATE.

6. According to the passage, the LRCWA’s report recommended that contingency-fee agreements
 
(A) be used only when it is reasonable to think that such arrangements will increase lawyers’ diligence and commitment to their cases ---------------- not mentioned. ELIMINATE.

(B) be used only in cases in which clients are unlikely to be awarded enormous damages ---------- not mentioned. ELIMINATE.

(C) be used if the lawyer is not certain that the client seeking to file a lawsuit could pay the lawyer’s regular fee if the suit were to be unsuccessful ----------- not mentioned. ELIMINATE. 
 
 (D) not be used in cases in which another type of arrangement is practicable----------  yes, read line 23-27. Should be used as last resort . CORRECT. 
 
(E) not be used except in cases where the lawyer is reasonably sure that the client will win damages sufficiently large to cover the lawyer’s fees ------------ not mentioned, ELIMINATE.

7. Which one of the following, if true, most seriously undermines the author’s criticism of the LRCWA’s recommendations concerning contingency-fee
agreements?

(A) The proportion of lawsuits filed by the least well-off litigants tends to be higher in areas where uplift fee arrangements have been widely used than in areas in which uplift agreements have not been used. ---------- this is what the criticism is. This does not weaken the criticism. ELIMINATE.

](B) Before the LRCWA’s recommendations, lawyers in Western Australia generally made a careful evaluation of prospective clients’ financial circumstances before accepting cases that might involve complex or protracted litigation. ---------  perfect, so the author criticizes that because of contingency fee arrangement lawyers will only take the cases of the least well-off client and it will not be in favor of middle income or wealthy people. If this is true, then the criticism does not hold. CORRECT.

(C) There is strong opposition in Western Australia to any legal reform perceived as favoring lawyers, so it is highly unlikely that the LRCWA’s recommendations concerning contingency-fee agreements will be implemented. --------------------- not relevant. ELIMINATE.

(D) The total fees charged by lawyers who successfully litigate cases under uplift fee arrangements are, on average, only marginally higher than the total fees charged by lawyers who litigate cases without contingency agreements. --------------- how high the fee is not criticized. ELIMINATE.

(E) In most jurisdictions in which contingency-fee agreements are allowed, those of the uplift variety are used much less often than are other types of contingency-fee agreements. --------------- passage does not talk about “other” types of contingency fee arrangements. ELIMINATE

Ayushi0002 · Answer

Can someone explain Ques 6 as A also is mentioned in the passage (last line)

Sajjad1994 · Answer

(D)  is correct, paraphrasing LRCWAʼs first restriction, that contingency arrangements be used only as a  “last resort.”  If a non-contingency fee-arrangement were  “practicable,”  the LRCWA plan would require the client and attorney to use it instead.

(A)  is a Faulty Use of Detail, conflating one of the authorʼs criticisms with the report recommendations. Near the end of paragraph four, the author cited attorney diligence as one reason that clients might prefer to use contingency agreements, but LRCWAʼs recommendations donʼt address lawyersʼ increasing commitment to their cases.

Ayushi0002 · Answer

thanks a lot  Sajjad1994 , This helps a lot!

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In October 1999, the Law Reform Commission of Western Australia (LRCWA

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