Legal Profession Act 2007

The law society may decide a claim by wholly or partly allowing or disallowing it.

The law society may disallow a claim to the extent that the claim does not relate to a default of a law practice for which the fidelity fund is liable.

The law society may wholly or partly disallow a claim, or reduce a claim, to the extent that—

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

for a claim mentioned in section 398(2)—the negligence of the claimant contributed to the loss; or

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

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

the claimant has unreasonably refused to disclose information or documents to or cooperate with—

the law society in the investigation of the claim; or

another entity in the investigation of the claim, including, for example, an investigator or a police officer.

Subsections (2) and (3) do not limit the law society’s power to disallow a claim on another ground.

Without limiting subsection (2) or (3), the law society may reduce the amount otherwise payable on a claim to the extent the law society considers appropriate 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

unreasonably failed to mitigate losses arising from the act or omission giving rise to the claim; or

has unreasonably hindered the investigation of the claim.

The law society must, in allowing a claim, state the amount payable.