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LEGAL PROFESSION UNIFORM LAW (NSW) - SECT 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.
(6) In wholly or partly allowing a claim, the fidelity
authority must specify the amount payable from the fidelity fund to the
claimant or to another person at the claimant's direction.
(7) Subsection (4)
does not limit a fidelity authority's power to disallow or reduce a claim, and
subsection (5) does not limit a fidelity authority's power to reduce a claim.
(8) The fidelity authority must publish a statement, at least annually, about
how the authority is giving effect to subsection (1).
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