Examine condition of legal action - that sets a precedent (4,4)
I believe the answer is:
test case
'legal action that sets a precedent' is the definition.
'test case' can be an answer for 'legal action' (test case is a kind of legal action). I'm not certain of the remainder of the definition.
'examine condition' is the wordplay.
'examine' becomes 'test' (testing is a kind of examining).
'condition' becomes 'case' (case is a kind of condition).
'test'+'case'='TEST-CASE'
'of' acts as a link.
Can you help me to learn more?
(Other definitions for test case that I've seen before include "Precedent established" , "Legal action setting a precedent" , "Court precedent" , "Lawsuit whose decision will form precedent" , "One may set a precedent" .)