Reduction of liability for failure to enforce statutory warranty
62P Reduction of liability for failure to enforce statutory warranty
For the purposes of section 102 (5) of the Act, the rules of a fidelity fund may contain a provision to the effect that the provider may reduce its liability, or reduce any amount otherwise payable in respect of a claim, because of a failure by the beneficiary of the fidelity fund to take action to enforce a statutory warranty from the breach of which the loss covered arises, but only to the extent of an amount that fairly represents the extent to which the provider’s interests were prejudiced as a result of the failure.
A rule of a fidelity fund under this clause does not limit the operation of any provision included in the alternative indemnity contract to the effect of a rule required to be included by clause 62Q.
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