(a) If the identity of a discharger has been determined pursuant to paragraph 402.5(a)(4) of this Part, or liability is conceded by an alleged discharger, the administrator shall attempt to promote and arrange a settlement between the claimant and the person responsible for the discharge.

1. (1) Failure to participate in the settlement negotiations, without good cause, by the claimant shall result in the denial of the claim. Failure to participate in the settlement negotiations by the person having been determined responsible for the discharge or the person conceding liability shall authorize the administrator to enter into a settlement agreement with the claimant which shall be binding on the responsible party.
2. (2) Where the claimant and known or alleged discharger, if any, agree to the amount of the claim and responsibility for the damage, the known or alleged discharger shall pay the agreed amount to the claimant and such payment shall not be deemed an admission of liability for purposes of any other claim or in any other proceeding.
3. (3) If a settlement cannot be achieved pursuant to this section, and a claimant directly presents a claim to the fund for payment of damages, the administrator may convene a board of arbitration to determine the validity or amount of the claim, and the administrator shall convene a board to make such a determination if the alleged discharger or other person contests in writing the validity or amount of said claim.

(b) When a claimant directly presents a claim to the fund for payment subsequent to the conclusion of unsuccessful settlement negotiations, the administrator shall provide written notice by certified mail, return receipt requested, of said claim to any discharger or alleged discharger or other alleged responsible party.

1. (1) Any challenge by the discharger or alleged discharger or other person of the validity or amount of the claim must be filed in writing with the administrator, within 20 days of the providing of such notice, stating the particular items being challenged and the basis for the challenge.
2. (2) No payment from the fund may be made to a claimant until at least 21 days after said notice has been provided; and if the administrator determines to convene a board or is required to convene a board pursuant to section 185 of the Navigation Law, no payment may be made except in accordance with the determination of said board and the requirements of section 185 of the Navigation Law.
3. (3) If the administrator agrees to the amount of the claim and no challenge of the validity or amount of the claim has been filed with the administrator by the end of the 20 days, the administrator shall certify the amount of the claim and the name of the claimant to the State Comptroller, and the State Comptroller shall pay the same from the fund.