13 November 2015

Challenging customs

Ivory is a complicated subject, legally and morally. 

The killing of elephants for their tusks is abhorrent, and doing so and trading in the ivory are internationally outlawed.  Where it gets problematical is with art and antiques.  Since prehistoric times, ivory has been used to create objects of art, or components such as piano keys, or to ornament items such as jewellery or furniture, sometimes to only a very limited extent.  Opinions vary as to how such objects should be dealt with, from compulsory destruction, to make a point, to leaving alone, as any wrong involved cannot be undone, and issues of cultural heritage and scholarship can arise. 

Fortunately, I do not have to decide laws, just work with them.  For cross-border ivory movement, the starting point is an international treaty known as CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) on top of which individual states have their own related laws and regulations.  If those can be satisfied, licences are required for exporting and importing.  

I recently had a case where a highly respectable London dealer, specialising in Indian and South East Asian Art, had bought some 17th century Indian carved ivory Yali brackets at Bonhams in New York.  These small items, the largest only 15cm high, would have formed part of a processional mandapa (temple hall), an elaborate structure that carried sculptures through the streets during special festivals. The brackets are very rare, and examples can be found in the Victoria and Albert Museum and the Los Angeles County Museum of Art. 

Unfortunately, due to an error on the part of the dealer’s carriers, the items arrived at Stansted Airport with inadequate documentary evidence of the US export licence that had been obtained.  As a result the UK Border Force seized the brackets and prepared to destroy them.  Although there could have been a claim against the carriers, the dealer’s main concern was the preservation of these important items.  He demonstrated what had happened, and he even offered to donate them to a museum, but UKBF would not be moved. They said the dealer should have made a new retrospective application to the US, and that he was at fault for not doing so, although such an application appeared to be impossible. 

Enter the lawyers.  The dealer’s legal team consisted of no fewer than three art lawyers: the English barrister Jessica Franses, me as solicitor conducting the case, and US attorney Nicholas O’Donnell, the last being able to attest to the impossibility of a retrospective licence.  A tribunal appeal was launched in November 2013.  Statements were obtained, including expert evidence on the historic and cultural importance of the items, but the UK Government’s lawyers remained unmoved.  Finally, after almost two years, and just two days before the trial, the UKBF caved in and announced that the decision had been reviewed and that the brackets could be collected from the airport, where they had remained. 

There are a number of points to be made.  First, dealers and their agents and contractors must take the greatest care to get the paperwork right.  Secondly, customs organisations can be very strict and inflexible.  Thirdly, they will happily destroy valuable art and cultural heritage.  Finally, it can take a lot of time, effort and determination to get them to see reason and act fairly, but it can be done.

14 September 2015

Street art revisited: Art Buff

A couple of years ago we in the Fladgate art team put our heads together to consider the potential legal problems in trading in street art and produced this article: Street art: the legal issues
It was a topical subject because of the auctioning of Slave Labour, which I covered in my post Selling Banksy street art
Now it is topical again with Friday’s High Court judgment in the case concerning Banksy’s mural called Art Buff.  The artwork had been painted in Folkestone on the wall of an amusement arcade called Dreamland.  The owners of the business, the Godden Family, had the artwork cut out under the supervision of an art dealer Robin Barton who specialises in such trade, under the name Bankrobber.  It then came into the hands of the New York based Kessler Gallery who brought it to Art Basel in Miami where it was exhibited with a price of US$720,000.
Meanwhile, local forces gathered in Folkestone, a town not over-endowed with art.  Proceedings were brought by a local charity, Creative Foundation, which has the objective of regenerating the town through creativity and the arts.  The issue relied on was one that was anticipated in our article, in which we said:
In law, land includes buildings and fixtures, and once paint is on a wall, it becomes part of the land. Therefore, as soon as the artist creates his work, it belongs to the land owner. The owner for this purpose will be either a freeholder or leaseholder, and their respective rights and obligations regarding the art will depend on the terms of the lease, which would almost certainly have been drafted without any thought of street art.
It seems that in the Art Buff case, the Goddens were leaseholders, that is tenants.  The artwork having become part of the building, and therefore part of the land, and absent any other agreement, it belonged to the ultimate freeholder, who presumably was willing to co-operate with Creative Foundation.  The charity then succeeded in getting an injunction from the court for the returning of the work to Folkestone.

11 May 2015

The strange world of private art sales

I am often contacted by new or existing clients who are putting together a deal for the sale of some work of art, usually for an eye-watering amount.
These people are not the current owners, nor the proposed purchasers, but something in between: agents, advisors, introducers, dealers, and often not quite sure themselves.  They are sole traders whose only capital is their art market connections. They usually see themselves as being on the side of the buyer or seller, but sometimes both or neither.  They might be part of a chain of such people that will link the buyer and seller, or they are to one side of the chain.  Rarely will the art pass through their hands, either physically or by ownership.  Their interest is in some percentage or lump sum, but from whom, under what obligation and in what circumstances can be unclear.
No one knows the identity of everyone involved. Parties prefer to be confidential, and for a link in the chain to introduce the links on either side to each other would risk the in-between link being bypassed. The work of art is usually known, and so there is probably an owner ready to sell, but no one is sure if the ultimate buyer is in place, or still being sought.  If in place, unknown alternative chains might already be forming between the buyer and seller.
I can be asked to help to get the deal off the ground.  A lawyer’s ‘letter of intent’ seems to make an impression, because I am often asked to do one.  However, the letter will be carefully drafted to avoid any commitment, and all it really shows is that a lawyer has been brought in, which I suppose indicates some level of intent.
More often, I am brought in at a later stage when the concern is that the proposed deal is falling apart, or an actual deal is being breached.  Given all the vagueness and obscurity, the work required can be quite a challenge.
What I wonder, and no one will ever know, is how many of these deals ever come to fruition.  A few per cent of tens of millions is serious money, particularly for people with no business overheads, and so I suppose one deal every few years keeps the wolf from the door.

20 January 2015

Sotheby's wins The Cardsharps case

We now have the keenly awaited High Court judgment in The Cardsharps case. 
This was a negligence claim against Sotheby’s who had advised a Mr Lancelot Thwaytes in 2006 that his painting of The Cardsharps was a copy of Caravaggio’s painting of that name, currently in the Kimbell Art Museum in Fort Worth, Texas. Sotheby’s described Mr Thwaytes’ painting as being by a “Follower of Caravaggio” and, as a result, that was the basis on which it was auctioned by them, selling for £42,000.
The lady who bought it did so on behalf of her friend Sir Denis Mahon, who was described by the judge as “a lifelong Caravaggio scholar of great renown”.  In November 2007, at a party to celebrate his 97th birthday, Sir Denis announced to the world that after cleaning, restoration, extensive investigations, and input from other experts, it was clear that the painting was a replica painted by Caravaggio himself, and therefore worth many millions of pounds.  Needless to say, Mr Thwaytes was rather miffed to hear this.  He brought a claim against Sotheby’s for damages for negligence.  Rather than claiming and having to prove that Sir Denis had been right and Sotheby’s had got it wrong, which Sotheby’s and some experts still do not accept, the claim was that Sotheby’s failed to spot that the painting had “Caravaggio potential”.
As I have pointed out before (Coleridge Collar), it was not for the court to second guess whether or not Sotheby’s got it right, but whether they were negligent in reaching their conclusion.  The test is what a reasonable and competent art researching auction house would have done, and in this case the judge made clear that, for an auction house of Sotheby’s status, the standards had to be high.  He also held that it made no difference whether the art was just sent for research and assessment, rather than for sale.
In his 190 paragraph judgment, the judge concluded that Sotheby’s had not been negligent.  In response to particular claims, he held that Sotheby’s did not need to obtain external advice; that they were entitled to conclude that the quality was not sufficiently high to merit further investigation; and that nothing on the visual examination, the X-rays and the infra-red images should or would have changed Sotheby’s view.  The judge also held that had the painting been sold with conflicting expert views on its attribution, it might not have sold for much more than it did.
On a personal note, I happened to see the painting last month, where it currently hangs high in a corner of the Museum of the Order of St John, in London.  Aware of the case, I took particular interest in it, and I was not impressed.  I claim no expertise whatsoever, and admittedly the painting was badly lit, but I remarked to my companion that it looked very “flat” for an old master.  I was therefore interested to see from the judgment that Alexander Bell, Sotheby’s Joint International Head and Co-Chairman Worldwide in their Old Master Painting Department, told the court that he had concluded that the painting looked “flat and dead”.  Perhaps I’m in the wrong business!

13 November 2014

Warburg confirms independence

My daily walks between station and office take me past the Warburg Institute, housed in a drab 1950s building in Woburn Square.  My knowledge of the Institute was until now limited to a vague recollection that the disgraced art historian and Soviet spy Sir Anthony Blunt had the title of Warburg Institute Professor. I could not find that on the Institute’s website, but perhaps it would prefer to be known for other things.  That should now be helped, at least in the English legal world, by the judgment in University of London v John Prag and HM Attorney General [2014] EWHC 3564 (Ch).
The first defendant, John Prag, is Professor Emeritus at Manchester University, a member of the Advisory Council of the Warburg Institute and a descendant of its founder, Professor Aby Warburg.  In effect, the case was a dispute between the University of London and the Institute, and it was about how the 1944 trust deed, which founded the Institute, should be construed.  Ten years earlier, Aby had moved, with his art research institute and its material, to London from Hamburg, after the Nazis came to power.
The 1944 trust deed was entered into between the Warburg family, who were known for banking, and the University.  The deed related to a library of books and photographs which was given to the University.  In return, the University was required to house the library, which now has 350,000 volumes, in a suitable building and “keep it adequately equipped and staffed as an independent unit”.  The background to the recent dispute was that the Institute believed that the University wished to integrate it into its other library services.
The court held that the trust was designed to secure the future of the Institute and did not just apply to the 1944 collection, but also subsequent additions and intellectual property rights.  It had to continue as an independent and living institution and could not be integrated into the University.  The building was not part of the trust, but had to be funded by the University.  Also, the Institute could not be debited by way of a share of the costs of University-wide services, but only for actual cost.
The case illustrates what often happens.  What was done long ago with the best of intentions, and most welcome at the time, can become unsuitable or a cause of friction for future generations whose priorities and motives are inevitably different.

21 July 2014

Hirst's Bombay Mix-up

There was an interesting article in The Telegraph last week about a work called Bombay Mix, by Damien Hirst, and the dispute between his certification company, Science Ltd, and a Mr and Mrs Simpson who possess the work.

According to the article, in 1988, Hirst was commissioned to paint Bombay Mix, an early spot painting, on some wallpaper in a house owned by Mr and Mrs Ritblat.  Science claims that, before the house was sold, it was agreed with the Ritblats that in return for the painting being destroyed they would be given an alternative portable painting.  The wall painting was not destroyed and was still on the wall when the house was bought by the Simpsons in 2005.  In 2007, the Simpsons employed specialists to have the painting removed from the wall and mounted on backing board.  The Simpsons now want to sell it.

In the circumstances, Science has refused to issue a certificate of authentication, has claimed ownership and demanded the painting’s return for destruction.

This case raises several issues but, before commenting, I must make two assumptions: that the facts in the article are correct and there are no other relevant facts.  As a lawyer who has had cases reported in the press, I know just how big those assumptions are.
The first issue is whether the painting became part of the building, which is part of the land.  If so, it lost its separate identity and any possible separate ownership.  The first consideration is how easily the item could be removed, for example compare a light shade that could be detached and the light fitting fastened to the ceiling.  For art, one can also consider whether it is decoration or enhancement of the building, for example compare a hung tapestry to a plaster frieze.  Wallpaper forms part of the building, and the fact that specialists were required to remove it intact proves the point.  If Science’s agreement with the Ritblats gave it some right over part of the house, it could have protected its interest by registering it at the Land Registry, which would warn any purchasers of the house.  Failing to do that would result in house purchasers acquiring ownership of the painting.  So I think the Simpsons must now own the painting.  They were free to take the painting from the wall and create a separate item capable of future separate ownership.

Can Science refuse to issue a certificate of authentication, when it knows that the work was by Hirst?  Yes it can, because it is under no duty to the Simpsons.

However, I do not agree with the suggestion in the article that the Simpsons cannot say that the painting is by Hirst, cannot own it and cannot sell it without a certificate from Science.  It is typical of artists and their foundations or estates to try to impose a regime to give them control over the marketing of the artist’s works.  However, they can only base such restrictions on agreements, and cannot bind strangers.  In this case, with all the publicity, and the claims made by Science, no one can question the authenticity and provenance of the work.  That said, whilst there remains a dispute as to ownership, whatever the merits, buyers will be discouraged, and that might be the only advantage Science has, until the matter is settled or comes to court.

20 May 2014

Mediation of art disputes

Earlier this year, my firm co-hosted a seminar with the Chartered Institute of Arbitrators, on the resolution of art disputes.  I shared the platform with Henry Legge QC, a leading art barrister, and Sarah Charles of Christie’s. It was a great success and there was clearly a lot of interest in the mediation of art disputes, both from the professionals and the market players in the audience. 

Mediation is a process to achieve a settlement of a dispute, as an alternative to bringing court proceedings or to continuing them.  It usually involves a day with an independent mediator who meets with the parties, sometimes together, sometimes separately, and applies all sorts of skilful means to get the parties into negotiation, usually via the mediator, with a view to getting them to reach a settlement.  Success rates are remarkably high for parties who have a will to settle, even if they begin the day a long way apart and would not otherwise be expected to reach agreement. 

The mediation process is confidential and, in my experience, confidentiality is particularly important to most parties to art disputes.  For example, professionals are concerned about reputation, and collectors or investors would rather not advertise their art dealing, which might invite unwelcome attention.  Also, known disputes about attribution and provenance will seriously damage the goods, whatever the outcome.  On the other hand, there will always be some parties who crave the publicity of a trial for tactical or principled reasons, which might also encourage the other party to settle. 

There are some good mediators who have experience of art disputes, and Charles Middleton-Smith is a leading example.  Having an understanding of art law, the art world and the particular priorities of the disputing parties is a great advantage in gaining the parties’ trust and drawing them together. 

Mediation processes can also be useful for disputes between institutions, and the International Committee of Museums has a mediation scheme.  International Nazi looted or forced sale claims and cultural heritage claims can also be better resolved through mediation because of its greater flexibility. 

What I learnt from the seminar is how much good work the big auction houses do in mediating when claims arise between innocent sellers or buyers of art and the victims of earlier theft of that art, where sadly the the latter have less rights than they expect.