Art law covers a large canvas of specialist areas such as copyright and tax, discovers Grania Langdon-Down

The restitution of looted Nazi art, the trade in smuggled antiquities, Christie’s battle with a collector over a pair of 18th century vases, the massive Momart warehouse fire, and the new resale right that will allow artists to claim a percentage of the sale price if their works are resold, are just some of the issues dominating the practice of art law.


The huge range of legal issues thrown up by the art world means some firms have specialist art groups. For others, it is a ‘significant’ part of their practices but is something they do ‘as and when required’.


Karen Sanig is head of the art law group at City firm Mishcon de Reya, which she founded ten years ago after being involved in two big cases of art litigation. She acts for collectors, dealers, galleries, artists and governments, including the Egyptian government in two cases involving the recovery of cultural heritage items. She combines the work with media-related litigation. ‘The two overlap because everything that is art is often in the media.’


She explains: ‘There are so many fertile areas in art law. I have a plethora of cases at the moment – two or three on misattribution, lots on title and provenance. It is a very complex area to work in, often involving a lot of contractual issues, particularly in claims against auction houses.


‘Lots of important cases are around art because it is such a controversial area. The art market is not regulated, yet the turnover and sales are enormous. It would be impossible to regulate it globally but, as a consequence, a lot of leading cases and points of law involve art.’


Last month, Christie’s won its appeal against the High Court ruling that it had been in breach of duty in the way its catalogue described a set of 18th century Houghton vases. Ms Sanig says: ‘It was a very significant case. The Court of Appeal judgment was interesting because it allows auction houses to remain impenetrable middlemen. People go shopping at big auction houses as they would at Harrods and they expect to have a claim if things go wrong, but often that is not the case. Collectors were watching the Christie’s case with bated breath and were disappointed in the outcome.’


Rupert Boswall, a litigation partner at City firm Reynolds Porter Chamberlain, acted for Christie’s in the case. ‘Auctioneers receive misdescription claims from buyers as an inevitable part of their trade. There is still no case determining whether a general duty of care is owed to buyers for catalogue descriptions – the decision on the Houghton vases was very much on its own facts.


‘Most auction houses exclude liability, but offer an anti-forgery guarantee. This does not, however, apply to simple misdescriptions of authorship. Some auctioneers, including Christie’s, have addressed this by broadening the guarantee to cover authenticity. This makes the case against widening the duty owed even stronger.’


Another case being watched closely involves the British Museum. It wanted to return four Old Master drawings, stolen during the Second World War, to the family of Czech lawyer Arthur Feldmann, who was killed by the Nazis. However, it was prevented from doing so by the British Museum Act, which protects its collection.


The Attorney-General, Lord Goldsmith, asked the Vice-Chancellor, Sir Andrew Morritt, to clarify the law. He ruled that ‘moral obligations’ could not override the Act.


Ms Sanig says: ‘It was a very unusual application. The concern was that if an exception was made in this case, it could open the floodgates for other items, such as the Elgin Marbles, to be returned by the institution.’


Tony Thompson is a partner at City firm Macfarlanes, which acts as external advisers for the Royal Academy. The firm also acted for the J Paul Getty Museum in Los Angeles over Antonio Canova’s Three Graces sculpture. It was at the heart of a long-running dispute over whether it could be exported; it was eventually bought by the Victoria and Albert Museum and National Galleries of Scotland in 1994.


He says the issue of whether art, however it is obtained, should be handed back is complex. ‘It is much wider than a legal issue because it involves money, heredity, national interest and politics. It is also very emotional, particularly when it is bound up in looted Nazi art, and raises questions of provenance and ownership.’


In a third, high-profile case, Jonathan Wood, head of international dispute resolution at City firm Clyde & Co, issued proceedings against Momart last month. ‘I act for 30 claimants, including artist Gillian Ayres, the daughters of deceased artist Patrick Heron, [author] Shirley Conran and the Royal Academy, who lost significant works of art in the warehouse fire.


‘Momart has consistently denied any responsibility for the loss. But we say Momart was negligent and it was a disaster waiting to happen because the premises were wholly inadequate for storing very high-value works of art.’


In a statement, Momart said the fire was a ‘tragedy’ for all concerned but that it was caused by arson in an adjacent warehouse. It said Momart would defend the claims ‘vigorously’.


Mr Wood leads the firm’s art group. ‘There is an immediate synergy between art and insurance – we have being doing artwork claims for insurers for 70 years. That has expanded to include export licensing and dealing with museums, institutions and insurers over the recovery of stolen artworks, which is great fun.


‘Another very complicated area we advise on is the Convention on International Trade in Endangered Species – if you sell a piece of art with ivory or tortoiseshell in it, the authorities will come down on you like a ton of bricks.’


There are also disputes over the liability of dealers and valuers, he says, ‘as well as fun and games over the lifting of sanctions against Iraq. We also have a very interesting case where we are acting for a private



collector here who has a set of pieces from Afghanistan, which the Afghan government wants returned.’


He says the burning issue for the art market is whether the less favourable tax and duty treatment of art in UK and Europe will hand the competitive edge to New York.


Simon Stokes, partner and head of intellectual property at City firm Tarlo Lyons, is concerned that the new European-inspired resale right – ‘droit de suite’ – which is scheduled to come into force on 1 January 2006, could also distort the market in favour of the US.


He is advising the British Art Market Federation, which represents Sotheby’s, Christie’s, Bonhams, the Society of London Art Dealers and other leading dealers and trade associations, on the new right.


Mr Stokes says: ‘It is a very emotive issue. I am personally not in favour of it because it amounts to a sort of tax, which will distort the art market and potentially shift trade to the US. The argument boils down to one of equity. If a work of art appreciates in value, should the artist have some continuing share in that? But if you look at who actually benefits in continental Europe, it is largely the estates of famous artists such as Picasso and Matisse. If you are concerned with supporting artists, why not have better state funding for the arts?’


He points to another developing area, where copyright litigation is being fuelled by the Internet. ‘There are concerns that copyright is stifling creativity because of a culture which encourages an aggressive approach to protecting images. I also advise on the protection side, but I admit to being a copyright sceptic and would support a more flexible law. One alternative may be the development of new licensing models.’


For Richard Butcher, head of the dispute resolution department at central London practice Payne Hicks Beach, art law is a fascinating area because so many different issues arise. A collector of 20th century British art, he has been the client partner for the estate of artist Francis Bacon since 1999. ‘When Bacon’s beneficiary John Edwards died, we also administered his estate, which involved a lot of extremely complicated tax issues.’


An interest in art also tempts lawyers in-house. Richard Aydon, group legal director and company secretary at Christie’s, was a partner at City firm Stephenson Harwood when, in 1994, he became aware of the opening at the auctioneer. ‘Jobs like this don’t crop up very often and I realised I had to seize the moment. I am interested in art and collect modern British pictures on a very modest scale, but I am very careful to remember I am a lawyer and not an art specialist.’


He had been at Christie’s six years when the US anti-trust case against Christie’s and Sotheby’s surfaced, leading eventually to former Sotheby’s chairman Alfred Taubman being found guilty of conspiring with Christie’s to eliminate competition between them by fixing the commissions paid by sellers. ‘It was, professionally, a very challenging period. But we dealt with it thoroughly and, for all practical purposes, it is now well and truly behind us.’


He says the recent Houghton vases case was very significant in vindicating the company’s professional expertise. ‘We were also pleased the Court of Appeal rejected the argument that we had breached some additional duty to the buyer. There has been a lot of interest in the case, but I am not sure it will have far-reaching implications.’


He highlights restitution as one key issue. Christie’s keeps a database of information on art looted during the Nazi period. ‘On the one hand, you can have someone with a strong moral position wanting the work of art back and, on the other, someone who, in legal terms, has good title because they bought it in good faith.


‘Reconciling that tension can be difficult, especially if it comes to light when the object comes to Christie’s for sale. We won’t knowingly handle things that have been confiscated. But if we do get an issue, we try to put the parties together and hopefully resolve it by agreement. We also have to confront cultural heritage issues. It is important to preserve the legitimate market in antiquities while stamping out the illicit trade.’


Ruth Redmond-Cooper, who lectures in French law at Nottingham University, was so intrigued by the interconnections between the art and legal worlds that she founded the Institute of Art and Law ten years ago. It runs a part-time diploma in art law and, earlier this month, held a conference on war and cultural heritage.


She says: ‘More and more lawyers are finding cultural heritage is something they need to know about – in taxation planning, the return of looted works of art, money laundering.


‘I often say you could teach virtually the whole of law using examples from art law cases.’


Grania Langdon-Down is a freelance journalist