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ART AND CULTURAL PROPERTY LAW : An Introduction

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ART AND CULTURAL PROPERTY LAW : An Introduction

The art and cultural property specialism at the English Bar continues to be small but has enjoyed increasing recognition and growth over the last few years. With the increasing focus on sector-based specialisms across the legal market place, the small number of practitioners within this field has ensured its consolidation as a distinct practice area.

The nature and quantity of art and cultural property work is, unsurprisingly, driven by the art market itself. Until the crisis sparked by the global pandemic, and despite the prolonged domestic uncertainty occasioned by Brexit, the desirability of art and cultural property as an asset class continued to grow. London has remained one of the principal centres for the international art market. The volume of transactions, therefore, also continued to rise. The increase in the importance of due diligence and provenance research, as well as the cross-border nature of many of the transactions within the field, ensured that the rise in value of the work was matched with a rise in complexity.

The publicity which comes with the most high-profile deals and disputes in this sector, together with the recognition of art and cultural property law as a growth area across the legal market place, has helped to cement the status of the specialism. Nonetheless, it remains extremely small and specialised: much of the expertise and experience rests with a narrow field of practitioners. The depth of knowledge which those practitioners bring to cases in the area is generally seen as underpinning the expansion of the practice area at both the junior and leading Bar. There is every reason to hope that this trend will continue despite the inevitable disruption brought by the pandemic.

Overview of 2019-2020

Before COVID-19 intervened, art and cultural property as a specialism at the Bar was in rude health. The volume of both contentious and non-contentious work within the field had continued to increase steadily despite the relatively small size of the practice area and the uncertainty in the global and domestic political and economic landscape. Art continued to be seen as a relatively safe asset class and the increase in investing in art as a commodity had seen no sign of abating. Although the boundaries of the practice area are often difficult to define, the common thread of all the work in this area is that it centres around art, the art market or cultural property. The informality with which commercial arrangements are recorded in the sector (one which traditionally operates on trust) makes it fertile ground for disputes when relationship break down; recent months have seen high-profile scandals with the inevitable cascade of litigation.

Disputes over authenticity and attribution have continued to receive significant attention in the legal press, the art press and more generally. The financial value of these disputes has continued to see an increase along with the increase in value of works by the most desirable artists, making such disputes more commercially viable (and increasing the avenues of funding available to both claimants and defendants). The emphasis is on marketable provenance and unimpeachable title in the international art market, both in relation to transactions concerning private buyers and institutional buyers. This continuing trend has also fuelled the growth (both in terms of complexity and volume) of the work in the area in recent years and looks set to continue to do so. As standards and expectations increase across the sector (which is largely unregulated), professional negligence claims have continued to receive increased prominence.

Disputes as to ownership, title and agency continue to form a significant part of the workload in this area. In common with other areas which commonly involve international transactions the art and cultural property field often raises difficult conflicts of laws arguments and attempts at forum shopping. Claims concerning possession (rather than ownership) and involving bailment and consignment still play a significant role. The continuous prevalence of domestic and international regulation ensures that the continued growth in the non-contentious element of such transactions, involving advising on the drafting of consignment and loan agreements, as well as the effect of various consumer protection measures, remains steady.

Taxation of art is also an important and valuable source of work. While the majority of this is non-contentious, contentious disputes inevitably arise. The Acceptance in Lieu provision and related schemes have continued to provide a substantial source of work (albeit that this is often less prominent at the Bar than amongst solicitors’ firms). Issues involving the export and import (temporary or permanent) of artwork are a similarly significant feature. This last area demonstrates well the real specialism involved in the field of art and cultural property: advisory work on the import and export of works of art requires not only an understanding of the applicable legislative/regulatory framework but also the actual practices of the relevant decision makers.

Restitutionary claims continue to surface from time to time and it is likely that claims in this sector will continue to inform and contribute to the emergence of the expanding jurisprudence in that area. In relation to art and cultural property, claims fall into a number of categories, including civil claims based on common law principles of restitution or claims brought in reliance on foreign statutory regimes. Looted and stolen art (which, in common with much of the work in this practice area, inevitably has a cross-border element) have continued to be a feature of the contentious landscape.

The Year Ahead and Beyond

The year ahead is uncertain. First, it hardly needs saying that the devastating effects of the COVID-19 pandemic will cast a long shadow over the world economy, including the international art market. The effects of any recession are difficult to predict and a market in luxury assets such as art can be expected to suffer from any downturn in the world’s economy.

Second, there is the ongoing uncertainty over the shape of the UK’s eventual trading relationship with the EU. How this is resolved will be a significant factor in shaping the growth of the art and cultural property field. Much relevant legislation for the art market (including consumer rights and intellectual property) is derived from EU law and the likely short- and long-term effects of different post-Brexit trading arrangements will have a major impact on the future of the sector. Given that the increase of work in this practice area derives from London’s position as a primary centre of the international commercial art market, the uncertainty over our future relations with the EU leads to corresponding uncertainty in respect of the long-term development of the practice area.

Despite these concerns, practitioners reasonably hope for a growth in the amount of art and cultural property work in the year ahead. The markers which have seen the increasing recognition of the art and cultural property law field over previous years remain and the foundations for the area are strong. There is no particular reason to think that London’s special place in the international art market will be usurped or that all work will vanish despite the economic challenges ahead. The English courts have demonstrated a willingness to engage with the international art market on its own terms (in particular in considering the manner in which attribution and valuation is arrived at but also as to agency and commission arrangements) and are an attractive forum for the resolution of disputes. It is to be expected that work will continue to grow as the courts become more used to such claims and the sophistication of the legal analysis applied increases.