338Deciding claims generally

338 Deciding claims generally (1) The law society council may decide a claim by completely or partly allowing or disallowing it. (2) The law society council must decide a claim by the end of 12 months after the day the claim is made. (3) The law society council may disallow a claim to the extent that the claim does not relate to a default for which the fidelity fund is liable. (4) The law society council may completely or partly disallow a claim, or reduce a claim, to the extent that— (a) the claimant knowingly assisted in or contributed towards, or was a party or accessory to, the act or omission giving rise to the claim; or (b) the negligence of the claimant contributed to the loss; or (c) the conduct of the transaction with the law practice in relation to which the claim is made was illegal, and the claimant knew or ought reasonably to have known of the illegality; or (d) proper and usual records were not brought into existence during the conduct of the transaction, or were destroyed, and the claimant knew or ought reasonably to have known that records of that kind would not be kept or would be destroyed; or (e) the claimant has, in relation to the investigation of the claim, unreasonably refused to disclose information or documents to, or cooperate with— (i) the law society council; or (ii) any other authority (including, for example, an investigative or prosecuting authority). (5) Subsections (2) and (3) do not limit the law society council’s power to disallow a claim on any other ground. (6) Without limiting subsection (2) or (3), the law society council may reduce the amount otherwise payable on a claim to the extent the council considers appropriate if satisfied— (a) that the claimant assisted in or contributed towards, or was a party or accessory to, the act or omission giving rise to the claim; or (b) that the claimant unreasonably failed to mitigate losses arising from the act or omission giving rise to the claim; or (c) that the claimant has unreasonably hindered the investigation of the claim. (7) The law society council must, in allowing a claim, decide the amount payable.