Two weeks ago, the Institute of Art and Law and Wedlake Bell jointly hosted the seminar “Art Law Unveiled: Navigating Modern and Contemporary Art Transactions”. Legal issues surrounding this area were addressed, providing a high-level forum for discussing practical issues, such as art contracts, artists’ representation, the authentication of artworks and the role of collective societies in protecting artists’ intellectual property rights.
The first panel, moderated by IAL Director Alexander Herman, addressed art contracts such as sales, commissions, consignments and agency. The discussion highlighted the tension between Art Market Participants (AMP) and lawyers when it comes to contracts in art transactions. Emily Gould, IAL Assistant Director, outlined three fundamentals applicable to various agreements: writing contracts, clearly expressing parties’ intentions and understanding the capacity in which they are acting —whether as agents, consumers or businesses.
In a market “allergic to paperwork,” Gould presented recent cases where these fundamentals were ignored, leading to legal disputes. Examples include allegations of a $10 million USD commission for the sale of a painting by Paul Gauguin and the withholding of over $600,000 USD in payment for Jeffrey Gibson’s work. Gould also emphasised the objective approach of the court when examining contract terms and stressed the importance of not relying on implied terms or leaving blanks in contracts, as seen recently with DigiART Company and the artist Danny Casale.
Jil Birnbaum, solicitor at Wedlake Bell, discussed the increasing complexity of consignment agreements and the risks of gallery insolvency for artists. From a practical perspective, Birnbaum recommended artists conduct due diligence, draft the agreements and carefully document production costs to ensure fair remuneration and maintain ownership of the work. Birnbaum also referred to the customary non-resale clauses in the contemporary art market and recent US case law suggesting their recognition against consumers.
In contrast, James Willington, Finance Director of the Gagosian Gallery, London, presented the challenges one faces in practice. In particular, fitting legal contracts to a genuine relationship between artists and their galleries. Willington underscored the role of galleries in developing artists’ careers and managing key issues demanded by buyers, such as authenticity, absence of liens and demonstrating the gallery’s right to sell. Willington stressed the importance of clear and agreed-upon terms, especially through digital correspondence.
Although there is a wide spectrum of legal mechanisms to enforce these agreements, Alternative Dispute Resolution (ADR) seems to be, for now, the preferred option in resolving art disputes. Unfortunately, it is not always available for parties as presented.
The second panel, moderated by Petra Warrington, Senior Associate at Wedlake Bell, addressed challenges that artists face. The role of experts within this process and the inclusion of technology in protecting the market’s reputation were explored. From a comparative jurisdiction perspective, Olivier de Baecque, Partner at De Baecque Bellec Avocats highlighted the relevance of artists’ estates in France regarding authentication. Considering their access to artists’ information, the Court of Appeal has recognised their opinions as “particularly relevant” and, in parallel, estates have authority in addressing copyright infringements and artistic fraud. Therefore, de Baecque advised seeking their approval for authentication.
Denis Moiseev, CEO of Hephaestus Analytical, introduced a new standard for art authentication, combining traditional research, connoisseurship and scientific analysis with modern technology. Hephaestus aims to reduce risks for buyers, sellers and advisors and enhance transparency using blockchain technology and objective protocols. Moiseev emphasised the role of scientific companies as allies, acting as a third-party guarantee in the process.
From an AMP’s perspective, Paul Hewitt, Director General of The Society of London Art Dealers (SLAD) highlighted the society’s role in establishing dealer standards, the market value of their expertise and the increasing art trade regulations in the UK. Its members adhere to a Code of Ethics, maintain transaction records and prohibit trading in forgeries. SLAD membership serves as a robust indicator of dealers’ expertise, knowledge and integrity, particularly in the realm of artwork authentications. The recent Dickinson case was cited as pivotal in determining art dealers’ negligence and the reliance on their expertise.
The panelists concurred that authenticity in contemporary art is less complex and, in practice, issues arise primarily when someone refuses to authenticate. As Herman pointed out, the question that arises within this flexible framework is: who watches the watchers? Is relying on being an artist’s estate enough? Should trust be placed in an algorithm and scientific tests, or is SLAD membership sufficient? It appears that the true risk associated with incorrect authentication lies in the integrity and reputation of the art market. Consequently, AMPs are collaboratively working to provide robust advice to protect the art trade rather than support an oversight body for their work.
The last panel, moderated by Tamara Wakeford, Associate at Wedlake Bell, underscored the importance of collective societies. Reema Selhi, Head of Policy and International at The Design and Artists Copyright Society (DACS), Kimberley Ahmet Senior Manager at Artists’ Collecting Society (ACS) and Harry Martin, Barrister in Serle Court, discussed the benefits of collective societies in protecting and enforcing artists’ rights, facilitating royalties’ collection and distribution and reducing administrative costs for both AMP and artists.
Regarding artist’s resale rights regulations, participants highlighted the positive outcomes of its mandatory collection and distribution to more than 1,800 artists and their estates. Despite the positive results of the ARR as a sign of fairness and equity, there are some challenges in terms of reciprocity: the difference between jurisdiction in a global art market, the absence of litigation to delve into the essence of the right and the unsuccessful function of the Secretary of State in evaluating the regulation.
The seminar also delved into the challenges posed by artificial intelligence and reiterated the need to regulate AI generators to ensure transparency in the training of algorithms. Speakers debated the importance of protecting human creativity while allowing artists to use AI as a tool for their work.
From legal issues in art contracts to authentication dilemmas and the importance of the copyright regime, the seminar revealed the legal and practical challenges in the art market. Modern and Contemporary Art Transactions are diverse and complex, involving multidisciplinary perspectives, jurisdictions, stakeholders and organisations and, on top of that, the evolving dynamics of the digital era.
Paul Gauguin, Nafea Faa Ipoipo? (When Will You Marry?), 1892, public domain, Wikimedia Commons.