By Olivia Taylor.

Every year, Sotheby’s Institute of Art in London runs a two-part series of Art Law courses in which different topics in art law are explained by industry professionals. This article covers Part I of the series- a two-day course held on May 30th and 31st, 2019 covering the topics of due diligence, agency and relationships, taxation, intellectual property laws, artists’ agreements, and international and cultural art law. The material is taught in a way that caters to both art professionals and lawyers, as reflected in the diverse backgrounds of the 14 international attendees. 

Day One: Taxes and Intellectual Property

Photo courtesy of the Author.

The course was led by Tom Christopherson, Legal Consultant at Bonhams and formerly European General Counsel at Sotheby’s, who began the first day with a brief overview of the art world’s “legal landscape” to contextualize the course by bridging the distinct speakers’ topics under history, themes, and trends. His definition for the complex field of “art law” is worth noting as “a blend of legal principles and commercial application of those principles.” 

Tom then went on to explain the different types of relationships that exist in the art world and how they theoretically are governed by straightforward structures such as the law of agency. However, he subsequently challenged these simplifications by unpacking recent legal cases exemplary of the more commonly amorphous relationships of the art world such as Accidia Foundation v. Simon C. Dickinson Ltd1)Accidia Foundation v. Simon C. Dickinson Ltd., EWHC 3058 (2010) and the Rybolovlev Bouvier series of legal suits. Overall, the combination of art law theory and practical guidelines was representative of the course’s content as a whole. Short summaries of the speakers are as follows:

Clarissa Vallat, Director in the Tax & Heritage Department at Sotheby’s, spoke on “Art and Taxation in the Preservation of National Patrimony”. Clarissa used her experience executing private treaty sales to UK institutions to dissect conditional heritage exemptions, offers in lieu of tax, UK governing bodies involved, the Waverly Criteria, and differences between the U.S. incentive for the cultural gifts scheme versus the UK one. She found that by comparison, the U.K. government was slow to create incentivized cultural gift schemes until 2012, and that UK citizens and institutions have been slow to take advantage of the break as of yet. Another debate Clarissa touched upon was the tax-breaks on private treaty sales that museums are eligible for if they are listed as Schedule 3 bodies under the Inheritance Tax Act 1984. Small and/or underfunded museums are not often Schedule 3 status; thus it might seem discriminatory that although they need the break more, they are barred from it. One counter Clarissa mentioned was that there are many limiting restrictions, i.e. no deaccessioning, that non-schedule 3 museums benefit from not having to adhere to. 

Leo Dawkins, Senior Associate at Lee & Thompson LLP, ended the first day with his presentation titled “Introduction to Intellectual Property Rights in the Art World”, although the majority of the presentation was focused specifically on copyright. He concluded with an acknowledgement of contentious copyright areas to be watchful of as the law continues to be re-assessed including readymade art, appropriation art, and street art. Another contentious area mentioned less often is minimalism. Leo noted that minimalism complicates the qualification of “originality” in copyright considering the movement itself is grounded in factual forms, exemplified for instance, by Donald Judd’s Untitled’ 1972 box. While a box itself might not be so original, it may be covered under copyright at the expense of the scope of that copyright protection being very low; other people are still able to use boxes to make art perhaps quite similar to his.

Leo Dawkins, Senior Associate at Lee & Thompson LLP, ended the first day with his presentation titled “Introduction to Intellectual Property Rights in the Art World”, although the majority of the presentation was focused specifically on copyright. He concluded with an acknowledgement of contentious copyright areas to be watchful of as the law continues to be re-assessed including readymade art, appropriation art, and street art. Another contentious area mentioned less often is minimalism. Leo noted that minimalism complicates the qualification of “originality” in copyright considering the movement itself is grounded in factual forms, exemplified for instance, by Donald Judd’s Untitled’ 1972 box. While a box itself might not be so original, it may be covered under copyright at the expense of the scope of that copyright protection being very low; other people are still able to use boxes to make art perhaps quite similar to his.

Day Two: International Heritage Law, Due Diligence and Anti-Money Laundering

Tom Christopherson opened the second day by presenting on “International Heritage Law”. Drawing from excerpts of major international heritage laws (i.e. UNESCO 1970 Treaty and UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects 1995), Tom emphasized how important culture, religious background, societal norms, etc. are for interpreting these laws. Therefore, while UNESCO 1970 sets out generally accepted principles, UNIDROIT 1995 ran into difficulties with individual states’ domestic laws relating to title and good faith as well as limitation periods. Another question arises with  standards for enforcement of  a foreign state’s heritage and export laws in your own country. The traditional  standard in the UK is that another country’s penal laws would not  be enforced by English courts whereas laws applying to personal property generally should be. Standards such as this one are increasingly relevant to be mindful of as art trade globalizes and Tom compared the approaches by the English courts in the cases of A-G of New Zealand v Ortiz2)Attorney-General of New Zealand v. Ortiz [1982] 3 W.L.R. 570 Court of Appeal, (subsequently affirmed in the House of Lords) in the early 1980’s and Iran v Barakat3)Government of the Islamic Republic of Iran v. The Barakat Galleries Ltd. [2007] EWCA Civ 1374 (Court of Appeal) in 2007 to illustrate developments in this field.

Tom Christopherson, lecturing on “International Heritage Law.” Photo courtesy of the Author.

Rudy Capildeo, Partner at Charles Russell Speechly, then expounded upon Tom’s theme of stolen objects with his own insight on Due Diligence in Art Transactions. Rudy advises clients on the sale and purchase of art, which meant he was able to provide compelling personal accounts in the business. Although due diligence addresses what should be done before a deal, his examples reflected how the nature of due diligence’s definition has evolved ironically most clearly only in retrospect of deals that should not have gone through. Rudy balanced ethics outlined in international codes with specific UK and EU hard laws, some of which differ significantly from U.S. laws such as the Consumer Contract Regulations 2013. These regulations give consumers the rights to return or cancel and get refunded for any purchase made not on a store premises for 14 days after the order is made. Furthermore, these rights cannot be waived.  In art world application, this explains why private treaties with international auction houses state that if buyer is in the EU, they have some additional rights that non-EU buyers would not have. 

Lastly, Sarah Barker, Partner at Lee & Thompson LLP, spoke about the incoming anti-money laundering regulations under the Fifth Anti-Money Laundering Directive, which is set to be transposed into EU nations’ national laws by January of 2020. Being so current, the hypothetical ramifications of the Directive seemed an ideal topic for both Sarah and Rudy to discuss in a panel moderated by Tom. The primary theme to emerge from the discussion was the inexplicit yet palpable ultimatum attached to the ALMD5 that there needs to be a culture shift in the art world regarding the way transactions are carried out and individuals relate. For years art business professionals could not expect that an agent would disclose the identity of, or the relationship to, their principals. However, it would seem that this law no longer allows for that type of opacity to be the norm with the responsibilities applying to any sale over 10,000 euros, a bar that Sarah commented is quite low. The group imagined several scenarios, which will probably be a not insignificant adjustment for auction houses and dealers alike, theoretically including bidders’ ability to ask an auction house to give details about the consignor of a work. Furthermore, the GDPR will force that acquisition of personal data about that bidder or consignor to be explicitly consented to in a way that participants wishing to remain anonymous to the art market might not agree to. 

Tom concluded the course with a recap of what had been covered over the past two days and in sum, the course was engaging and rich in personal examples from the guest speakers that adult-professional audience values. 

The Author and the Center for Art Law would like to thank Sindy Mak for inviting them to Part I of Sotheby’s Art Law 2-Day Course series. 

Editor’s Note: Art Law Day Part II will be held on November 21-22, 2019 at Sotheby’s Institute of Art in London. For further information, please contact Sindy Mak, Public Programmes Manager at S.Mak@sothebysinstitute.com.


About the Author: Olivia Taylor is a current intern at the Josef and Anni Albers Foundation and will begin obtaining her JD from UCLA School of Law in the fall of 2019. Olivia is a former 2018 Fall Intern with the Center for Art Law who graduated from Colgate University with a double major in Philosophy and German and recently finished the Sotheby’s Institute Art & Business semester in London, UK. She can be reached at otaylor@colgate.edu.

References   [ + ]

1. Accidia Foundation v. Simon C. Dickinson Ltd., EWHC 3058 (2010)
2. Attorney-General of New Zealand v. Ortiz [1982] 3 W.L.R. 570 Court of Appeal, (subsequently affirmed in the House of Lords)
3. Government of the Islamic Republic of Iran v. The Barakat Galleries Ltd. [2007] EWCA Civ 1374 (Court of Appeal)