WYWH: “ABCs of Art Law: E is for Ethics”

December 19, 2024

By Emily Yan

On November 20, 2024, the Center for Art Law hosted an online CLE program about the ethical principles guiding art market, with a focus on the law, appraisal, authentication, and auction practices. This event, titled “E is for Ethics,” is the latest installment of the Center’s “ABCs of Art Law” series.^[1] The event was attended by legal professionals, auction house professionals, researchers, and students alike.

The event was moderated by the Center’s founder, Irina Tarsis, and featured a panel of experts across diverse sectors: Linda Selvin, Sharon Flescher, Eden Burgess, and Gabriella Moretti. Linda Selvin is the Executive Director of the Appraisers Association of America, the premier association of the fine and decorative arts and collectables. Sharon Flescher is the Executive Director Emerita of the International Foundation for Art Research (IFAR), a not-for-profit educational and research organization. Eden Burgess is Of Counsel in Schindler, Cogen & Hochman’s Art Law Group, with a practice in the areas of art and cultural heritage law, commercial litigation, intellectual property, and not-for-profit organizations. Gabriella Moretti, former restitution researcher at both Sotheby’s and Christie’s auction houses, is currently pursuing a PhD at the University of Maastricht, with a thesis on ethical decision making in the art market.

Ethical Considerations for Art Appraisers

Linda Selvin kicked off the session by discussing the Appraisers Association of America and the importance of ethics in their work. Linda explained the ethics rules that guide these appraisers, pursuant to the Uniform Standards of Professional Appraisal Practice (USPAP). She outlined the four components of these ethics rules:

1. Nondiscrimination: Appraisers must not violate or contribute to the violation of any anti-discrimination laws. Even if the piece of work is “not necessarily of [the appraiser’s] liking or [the client] was not in their favor, it would still be really important that [the appraiser] perform an assignment without bias – or they would need to decline the assignment.”
2. Conduct: Appraisers must perform their work with “impartiality, objectivity, independence, and without serving a personal interest. [They] must not render services in a careless or negligent manner or use [results] that are known to be misleading or fraudulent.”
3. Management: Appraisers must disclose that they were paid a fee, ensure that there was no predetermination for a particular result or to favor the client, and include a certification affirming adherence to the USPAP.
4. Confidentiality: Appraisers must comply with all applicable confidentiality and privacy laws. They can only disclose appraisal information to the client, unless legally required to do so.

Linda also discussed the Appraisers Association’s code of ethics, which mirrors the USPAP with some additional guidelines, including on the assumption of responsibility, objectivity, examination of property, and the purpose of appraisal.

Ethical Considerations for Authenticators

Next, Sharon Flescher spoke on the ethics of authentication, specifically discussing her role as an expert in one of the Knoedler-related cases: De Sole v. Knoedler Gallery, LLC, 974 F. Supp. 2d 274. The De Sole trial concerned an inauthentic Rothko painting that the plaintiffs had purchased from the Knoedler Gallery. Sharon was called as an expert in the case due to IFAR’s work in the authentication space. IFAR had written an authentication research report about a different painting – a purported Pollock – also purchased from the gallery.

During the program, Sharon discussed her experience as a fact witness and the authentication concerns of the report. In preparing the report, IFAR had conducted extensive research and brought in specialists to analyze the work. However, IFAR was unable to substantiate the provenance of the work or connect the painting to Pollock. IFAR also had concerns about the forensic results and the materials of the work, including disparities in how the materials were treated and aged. IFAR ultimately concluded that they had too many reservations to “accept the work as a work by Jackson Pollock,” with Sharon signing a cover letter to that effect. This process highlights the importance of going where the research leads and maintaining ethical standards, even when external pressures arise.

Ethical Considerations for Attorneys

Eden Burgess then discussed the ethical concerns for art lawyers advising clients, including artists, auction houses, museums, foreign nations, Native American tribes, and collectors. She highlighted that these concerns can span a wide range of issues (e.g., conflicts of interest, confidentiality, intellectual property), but focused her discussion on how lawyers – intentionally or not – contribute to the lack of transparency in the art market.

For example, when it comes to repatriation and restitution, auction houses often face scrutiny for “insufficient due diligence in doing provenance research.” Similarly, museums are governed by each state’s attorney general, with a mission and obligations to their stakeholders. When it comes to these issues, Eden notes that a lawyer’s number one responsibility is to abide by attorney-client privilege. However, Eden says that she also advises clients that “it’s better to be proactive” when it comes to issues of transparency, provenance, and repatriation because clients are then able to “exert more control over the reputational issues” and outcomes. Eden’s discussion sheds light on how art lawyers grapple with balancing issues of confidentiality and transparency.

Ethical Considerations for Auction Houses

Finally, Gabriella Moretti touched on the ethical obligations of auction houses regarding Nazi-looted art. She highlighted that auction houses are increasingly in the news cycle for these issues, as the public increasingly “expects full transparency in regard to the provenance of an object for sale.”

Gabriella explained that auction houses face unique challenges as brokers – not owners – of the art they handle, which limits their ability to act. Despite these limitations, auction houses have established restitution departments to investigate and address provenance issues ethically. To that end, Gabriella highlighted the Washington Principles, which promote open information sharing, central registries, and the return of stolen works. While they are not legally binding, they guide restitution departments within auction houses.

Following the panel, audience members were invited to ask questions or contribute thoughts, as well. A particular area of interest was how to balance ethical obligations with confidentiality restrictions. Linda noted that if appraisers suspect a work of art may be of suspect provenance, they typically decline the assignment or let their client know, but they are not obligated to report the work further. Similarly, Eden highlighted that “there are not a lot of duties for a lawyer that outweigh attorney-client privilege.” Speakers also discussed the differences between ethics, morality, and good business practices, emphasizing the distinctions and trade-offs therein.

Conclusion

The session offered valuable insights into the ethical challenges faced by key players in the art market. In sharing their experiences and perspectives, Linda Selvin, Sharon Flescher, Eden Burgess, and Gabriella Moretti fostered a rich discussion of how ethical principles shape the art market, influencing the relationships between appraisers, authenticators, attorneys, and auction houses. Their insights also highlighted the balance between the law and ethics: just because an action is legal, does not mean that it is ethical or above public scrutiny. These concerns are of increasing importance, with the heightened level of scrutiny faced by auction houses, museums, and galleries underscoring the importance of ethics codes and other industry ethical guidelines.

Handouts and Reading Material

View the materials and handouts for the session HERE.

Recording of the Event

Premium Members of the Center for Art Law have access to the archived recording of the program along with the other recordings of the ABCs of Art Law series.

About the Author

Emily Yan is a 3L at NYU School of Law, working as a Fall 2024 Legal Intern for the Center for Art Law. She received her BA in Economics and Psychology from Yale University. Prior to law school, Emily worked as a management consultant at the Boston Consulting Group and as a strategy consultant at the Whitney Museum of American Art. Emily’s research focuses on issues of intellectual property and cultural heritage.

1. This event follows “F is for Fakes,” the previous installment in the series. During the introduction, the Center’s founder, Irina Tarsis, noted that “F is for Fakes had actually “attracted more attention – maybe because people want to talk about fakes and forgeries rather than ethics.” ↑