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.

24 February 2014

Rubbish

From time to time there are stories of cleaners mistakenly clearing and throwing out modern art work.  One would have to be particularly dedicated to modern art, and po-faced, (or the artist!) not to snigger.
The latest report comes from Bari in Italy where a cleaner has thrown out a work by Sala Murat.  Given that the work is described as “newspaper and cardboard and cookie pieces scattered across the floor”, it sounds like a cleaner-magnet.  Apparently it is valued at €10,000.
The apologetic cleaning firm, which presumably wants to maintain its relationship with the gallery, has said that its insurance would cover the matter.  I wonder if that is right.  If I were acting for the insurers, I would require the insured to defend any claim by the gallery on the basis that the loss was caused by its negligence.  It should have anticipated the potential loss and left a sign for the cleaners saying “Not to be removed”. Normally such a sign might say “Not rubbish”, but perhaps that wouldn’t be true in this case.

19 February 2014

Nazi appropriated art

The Gurlitt story continues to fascinate the art world.

My earlier post Nazi looted art reflected the view at the time that any stash of Nazi art must have been looted, and that Cornelius Gurlitt and the art seized from his flat would not be reunited.  I suppose we should have known that no one who has secretly kept a €1.4bn collection for 45 years would give it up without a fight.

Gurlitt’s account of events and his lawyers’ arguments are now set out in a website that he or his lawyers have just set up Gurlitt.info.  However, whether Gurlitt still has his mental faculties seems to be open to question. As the site explains, at the behest of Gurlitt’s doctors, the Munich court has appointed a guardian, and yet it does not deprive him of the legal capacity to enter into contracts. In the cryptic words of the Q&A section of the website, “You can draw your own conclusions from this information”.

The website paints a picture that had already emerged in outline since November.  In particular, part of the art was owned by Cornelius’s father, Hildebrand Gurlitt, before the Nazi era and a lot of the rest had then been removed from public galleries and institutions, as so called “degenerate art”, and sold to Hildebrand.  It is said that only 3% of the works (35 of 1,280 items) have been claimed as “looted art” by the heirs of four Jewish owners, which Gurlitt is willing to consider.  Yet the identities of the works have only recently been revealed, so that number seems set to rise.

The website makes the point that the German limitation period is 30 years from any theft, which has long since expired.  However, the Bundesrat is presently working on a new law to extend that period.

This is a story that will run and run, and I will revisit it.

16 January 2014

Getting good title to art

Prompted by the “flea market Renoir” art case in the US, I’ve done an article for The Times about making sure that you get to own and keep the art you buy: Getting good title to art