240Determination of claims

240 Determination of claims

240 Determination of claims

(1) The fidelity authority must ensure that claims against the fidelity fund are determined independently, at arm’s length from the legal profession.

(2) The fidelity authority must provide written notice to a claimant against the fidelity fund of its decision in relation to a claim as soon as practicable after making that decision.

(3) The fidelity authority may determine a claim by wholly or partly allowing or disallowing it, or otherwise settling it.

(4) The fidelity authority may wholly or partly disallow a claim, or reduce the amount of a claim, to the extent that—

(a) the claim does not relate to a default for which the fidelity fund is liable; or

(b) 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

(c) the negligence of the claimant contributed to the loss; or

(d) 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 that illegality; or

(e) 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

(f) the claimant has unreasonably refused to disclose information or documents to or cooperate with the fidelity authority, or any other authority (including, for example, an investigative or prosecuting authority), in the investigation of the claim.

(5) The fidelity authority may reduce the amount otherwise payable on a claim to the extent the authority considers appropriate—

(a) if satisfied 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) if satisfied that the claimant unreasonably failed to mitigate losses arising from the act or omission giving rise to the claim; or

(c) if satisfied that the claimant has unreasonably hindered the investigation of the claim.