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FD&D (CLASS 6) / PART V / RULE 31
POWERS OF THE MANAGERS RELATING TO THE HANDLING AND SETTLEMENT OF CLAIMS
31.1 Control of Claims
The Managers shall have the right, if they so decide, to control or direct the conduct of any claim or legal or other proceedings relating to any matter which may result in Costs in respect of which the Member is or may be insured under these Rules and the Certificate of Entry and to require the Member to settle, compromise or otherwise dispose of such claim or proceedings in such manner and on such terms as the Managers see fit.
31.2 Condition Precedent to Recovery under these Rules
It shall be a condition precedent for the recovery of Costs under these Rules that the Managers shall have given prior approval to the action giving rise to such Costs. In particular the Managers shall decide whether or not legal or other proceedings should be commenced or defended. Save only that any Costs incurred as a matter of urgency where consultation with the Managers was not practicable shall be notified to the Managers as soon as is reasonably possible and the Managers shall then decide whether or not to continue any action already commenced and not yet concluded.
31.3 Referral
In the case of doubt as to the advisability of commencing or continuing any legal or other proceedings in the exercise of their powers under Rules 31.1 or 31.2 the Managers shall refer the matter to the Board for decision under
Rule 32.1 Sole Discretion to Decide.
Provided always that:
31.3.1 the Managers shall in any event refer the decision to the Board (or, in the case of claims not exceeding USD2,000,000, the Committee) if a Member shall so request.
31.4 Appointment of Experts
31.4.1 Without prejudice to any other provision of these Rules and without waiving any of the Association’s rights hereunder, the Managers may at any and all times appoint on behalf of the Member, on such terms as the Managers may think fit, lawyers, surveyors or other persons with a view to obtaining advice on, investigating or dealing with any matter which may result in Costs in respect of which the Member is or may be insured under these Rules. The Managers may also at any time discontinue such employment if they think fit.
31.4.2 All lawyers, surveyors or other persons appointed by the Managers on behalf of the Member, or appointed by the Member with the prior consent of the Managers, shall at all times be and be deemed to be appointed and employed on the terms:
31.4.2.1 that they have been instructed by the Member at all times (both while so acting and after having retired from the matter) to give advice and to report to the Association in connection with the matter without prior reference to the Member and to produce to the Association without prior reference to the Member any documents or information in their possession or power relating to such matter, all as if such person had been appointed to act and had at all times been acting on behalf of the Association;
31.4.2.2 that any advice they may give to the Member is that of an independent contractor employed by the Member and shall in no way bind the Association.
31.5 Bail
The Association may give bail or other security in respect of Security for Costs. The Association is under no obligation to provide bail or other security on behalf of any Member, but where the same is provided it shall be on such terms as the Managers may consider appropriate and shall not constitute any admission of liability by the Association for the claim in respect of which the bail or other security is given. In no case shall cash deposits be made by the Association.
31.6 Recovery of Costs
Insofar as Costs are covered under these Rules, the Association shall be entitled to any sum which the Member recovers in respect of such Costs pursuant to any award, judgment or settlement agreement. If any claims, disputes or proceedings are settled or compromised for a lump sum which includes costs recoverable from any other party, or without any or adequate provision as to the payment of such costs, then in any of those events the Association shall be entitled to recover from the Member such reasonable sum as the Managers may in their sole discretion determine as being attributable to Costs.