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To catch a thief

1970
1945
International Bar Association 1 April 2010
By Diana Bentley

The world of art disputes is an intriguing and growing area of practice.

The heady realm of art disputes often lies at the more glamorous end of the law – or so we may imagine. But it can admittedly yield a rich and intriguing seam of work for firms – from actions by sovereign states to reclaim national treasures, to claims about objects purloined by the Nazis, theft by criminals working to order and private ownership tussles. Not surprisingly, an increasing number of lawyers are attracted to the field but to succeed in it they need not only a good grasp of private and international law but agility and stamina as well.

Lawyers come to art law practice from a host of different fields – intellectual property, litigation, insurance, tax and trust law. Often they find themselves in the realm by happy accident. Massimo Sterpi, an intellectual property lawyer, partner of Italian firm Jacobacci Sterpi Francetti Regoli de Haas & Associati and Secretary of the IBA’s Art, Cultural Institutions and Heritage Law Committee, became involved in the field through his own interest in art. ‘I started collecting contemporary art and through that got to know artists, gallery owners and other collectors who became clients’, he explains. Lucian Simmons , head of the World War II Restitution Department of Sotheby’s New York, helped pay his way through law school by selling old masters’ prints and drawings.

The speciality is still relatively small, say practitioners. In London, Mishcon de Reya has the noted specialist Karen Sanig, who heads its art law department, and international firm Bird & Bird last year snapped up the practice of Lane & Partners, whose Ludovic de Walden is renowned for his art law work. In the US, Jo Backer Laird, Of Counsel at New York firm Patterson Belknap Webb & Tyler and formerly General Counsel at Christie’s New York, reports: ‘There’s been an “art bar” in New York for many years and universities like Harvard and Columbia have art law courses.’ The field has particularly come to the fore recently, she says. ‘It’s always been an attractive area for young law graduates. The fact that the art market has been so high profile in recent years has made it even more so.’ So what has been keeping art law practitioners busy? 

Sovereign claims

Italy, Greece, Turkey and Egypt are at the forefront of countries that actively make claims for valuable artefacts they have lost in the past. Now other countries are becoming more robust litigants. ‘Sovereign claims are expanding as many countries have become more aware of their heritage and the need to protect it’, comments Sanig. ‘China is now sending envoys around the world to find antiquities which it believes have been stolen from it and we’ll probably see an increase in claims from Iraq.’

While in some countries such as Italy, government lawyers pursue claims for the restitution of state-claimed objects, firms elsewhere are hired to help recover national treasures. Egypt’s Dr Zahi Hawass, Secretary General of the Supreme Council of Antiquities of Egypt, turned to Sanig when he was attempting to assert Egypt’s rights to the Head of Amenhotep III, a priceless 14th century BC Egyptian sculpture. Eighteen years ago, the sculpture had been illegally exported from Egypt by the British smuggler Jonathan Tokeley-Parry, given a false provenance and sold through an antiquities dealer. The case involved criminal proceedings in the UK and the US and the jailing of Tokeley-Parry and the dealer and was particularly complex, Sanig reports. ‘After the sculpture was smuggled out of Egypt, it had gone through various ownerships by innocent people in various jurisdictions. It had also been charged to a bank and left in a will. We had to unpick all of this.’ To Egypt’s delight, the head was returned to Cairo in late 2008 after much careful negotiation and without litigation, but Sanig notes: ‘There is no effective international law that deals with the trafficking of stolen art and antiquities despite the existence of various international conventions and European legislation on the return of unlawfully removed cultural objects from a member state.’

China’s increasing activism was notably evident in the auction sale in Paris in early 2009 of the dazzling collection of art and antiquities of the late designer Yves Saint Laurent and his partner Pierre Bergé. China demanded the return of two bronze animal heads, which had originally been taken from an imperial palace during the Second Opium War in 1860, claiming that the sale would seriously damage its cultural rights. After a French court ruled that the auction of the works could proceed, they were purchased by an undisclosed buyer for €31.4 million. But later, apparently, the buyer failed to pay. While Christie’s remains silent on the issue, some speculate that the buyer was in fact the Chinese Government or its agent.

At the Metropolitan Police in London, Head of the Art and Antiques Unit Detective Sergeant Vernon Rapley reports that technology is helping drive sovereign claims. ‘Now many auction houses have their catalogues online, which helps countries monitor what’s being sold’, he comments. But cases can be emotionally fraught: ‘They can be quite politically charged’, says Sanig. Ludovic de Walden warns too that many countries make claims without proper evidence to the detriment of dealers and collectors. ‘Countries claiming items now often have the emotional upper hand. They can make up their cases as they go along. And litigants cannot rule out the possibility of politically inspired judgments in the area’, he says.  


‘Countries claiming items now often have the emotional upper hand’
Ludovic de Walden
Bird & Bird

Private cases

Private disputes too remain a constant source of work. ‘Disputes can erupt over anything from rifts over jointly owned collections to the sale of wrongly attributed objects and there are many family disputes’, reports Jo Backer Laird. Often litigation is pursued in numerous jurisdictions and last for years. Ludovic de Walden found himself running a series of international actions representing the Greekbased Michailidis family in a dispute over the collection of the late Christo Michailidis. London-based dealer Robin Symes and Michailidis were partners in business in the global antiques trade but Michailidis’ death a decade ago provoked a prolonged battle between Symes and the Michailidis family over the ownership of their collection of antiquities. In 2005, Symes was jailed for disregarding a court order over the sale of an Egyptian statue. The most recent dispute concerns a valuable collection of art deco furniture once housed in the couple’s London home. Now missing, it is claimed by the Michailidis family who say that it has been sold and the proceeds hidden.

Involving actions around the world over a period of about seven years, the case illustrates the management challenge such disputes present. ‘They need very efficient management from a central core’, advises de Walden. ‘You often have to manage many lawyers in different places. But you must ensure that you’re consistent in your facts, quality and presentation. The lawyers you work with in other jurisdictions should have the same professional ability and integrity as your own team.’

Practitioners often have to be particularly quick on their feet too. London City firm, Silverman Sherliker had to move rapidly when it recently helped the Italian community of Campo di Giove prevent the sale of one of a pair of 14th century painted panels, due to be auctioned by Christie’s in London. Part of an altar screen housed in the community’s 17th century church, the panels were stolen in 1902 and were untraced until they appeared in the Christie’s catalogue. Researching the problem, partner Jonathan Silverman found that the other panels had ended up in the Rapid Falls Museum in the US, which helped demonstrate their identity. Christie’s withdrew the panels from sale and undertook not to release them, but Silverman advises: ‘The major issue was satisfying the auction house quickly that the items should be pulled out of the sale. We’d dealt with Christie’s on other cases and they were very helpful but you mustn’t get lulled into a false sense of security.’

Nazi looted art

Another continuously active area is the field of Nazi looted art. Theft of artworks from Jewish owners in particular was carried out systematically and on a massive scale before and during the Second World War in Nazi-occupied territories. Claims for the return of works to their rightful owners have continued since the end of the war. Cases are diverse since the expropriation process was complex. ‘Sometimes objects were directly seized, sometimes owners were forced to sell them at low prices under duress, some had to be abandoned. Now all these circumstances are recognised as grounds for the return of artworks’, says Anne Webber, Co-Chair of the London-based Commission for Looted Art in Europe. 


‘There are documented ties to art crime from criminal and terrorist organisations like the Sicilain mafia, the IRA and al-Qaeda’
Terressa Davis
ARCA

 Various international agreements have addressed the subject. ‘The 1998 Washington Principles on Nazi-confiscated art really set the agenda for the recovery of artworks lost through Nazi persecution and their return to their true owners’, says Webber. Forty-four countries that endorsed the Washington Principles agreed to research their public collections to check the provenance of their works during 1933 to 1945. ‘Some countries – including the UK, the US and Austria – have been diligent about this and there are master portals of the results of the museums’ research that can be searched. Other countries, like Germany, have been less active’, Webber reports.

One current and important case, says Webber, is the claim concerning a painting by the Impressionist Camille Pissarro, which is part of the Thyssen-Bornemisza Museum in Madrid. The Nazis forced its Jewish owner, Lily Cassirer, to sell the work in 1939 for a paltry sum in exchange for permission to leave Germany. The painting subsequently changed hands several times and was bought by Baron von Thyssen in 1976 and passed to the Spanish State when it bought much of his collection. Although the West German Government acknowledged Cassirer’s ownership and compensated her, the whereabouts of the painting was only recently discovered. The Spanish Government has refused to return the painting but, in September, a Californian appeal court ruled that Cassirer’s grandson could continue a suit against the museum and the Spanish State to recover the painting in California. ‘This case is important as it allows a claimant to file in the US court when all avenues have been exhausted in Spain’, says Webber. ‘Spain argued that it was protected by the Foreign Sovereign Immunities Act from being sued in a US court. Cassirer’s lawyers argued that there was an exception for goods wrongly expropriated. The court agreed even though Spain wasn’t the expropriating country. It also found that another provision of the Act applied as the museum engaged in commercial activity in the US.’

Other current cases raise the issue of the plight of those who have bought looted works in good faith, Webber says. ‘Buyers may have gained title to such works, but then find they cannot be sold freely on the open market if it’s known that they were stolen or obtained in dubious circumstances. In these cases there’s a risk of creating two sets of victims.’ Many disputes reach negotiated settlements but finding an equitable solution can be a lottery. ‘Even in the same country, one museum will be willing to negotiate, while others won’t so there’s no consistency’, she adds.

Lucian Simmons in Sotheby’s New York confirms that auction houses are reluctant to sell what are regarded as ‘tainted’ objects. Simmons’ team researches the provenance of art sold by Sotheby’s worldwide. ‘We look for potential issues including legal issues like title defects, public relations and ethical issues. We don’t want to sell art seized by the Nazis which has never been restituted, even if the original owners’ claim has expired through limitation statutes’, he says. When issues arise, Sotheby’s facilitates discussions between buyers and claimants. ‘We have the experience to help’, says Simmons. ‘Many sellers disposing of works originally taken by the Nazis have a good faith background.’ Among the remedies may be the sharing of the proceeds of sale or the donation of the work to a museum with both parties credited.

Anne Webber insists that leadership is needed from governments. ‘The bane of our lives is the lack of information. A huge help would be if governments digitalised their records on pre-1933 collections and on what was taken or returned – many records exist’, remarks Simmons. But there are positive developments too. The UK has recently approved a new law to allow art looted by Nazis and found in British museums to be returned to its owners. ‘Before this law was passed, British law severely limited the ability of museums to dispose of any objects in their collections even if they had been looted by the Nazis so this is a major development’, comments Terressa Davis, Director of the Association for Research into Crimes Against Art (ARCA), a not-for-profit think tank on art crime. 

Stolen art and taking care

Meanwhile art thefts, fakes and forgeries continue to capture the headlines. ‘There are documented ties to art crime from criminal and terrorist organisations like the Sicilian mafia, the IRA and al-Qaeda’, reports Davis. ‘Most individuals lack the resources to commit major art crimes and dispose of what they take, although more research needs to be done on this area.’ Stolen art can be ransomed, sold on the black market or used as collateral when dealing with criminal organisations, she says. Those stealing art are mostly straightforward burglars, says Detective Sergeant Vernon Rapley of London’s Metropolitan Police. ‘They’re often contracted by someone who has expertise’, he says. ‘There’s an increased interest in art and antiques. People are stealing things like Georgian candlesticks instead of DVD players and cars – paintings and artefacts are more saleable and less traceable. Mid-range items – between £5,000 and £30,000 – can be sold at near to their market value to people who fail to do due diligence – it’s a largely unregulated market, although the relevant laws vary between countries.’

Buyers can, however, refer to various registers of lost and stolen art before making a purchase. Interpol has a database, as does the Metropolitan Police (although the latter must be searched by request before it becomes publicly available on the net – a development that is planned), and the Art Loss Register is one of the commercial databases available. ‘None of these are complete, so people need to search as many as they can’, Rapley advises. When items are seized and there is insufficient evidence to prosecute, he explains, the matter becomes a private dispute and is referred to a civil court. Valuable items stolen can be sold back to the victim or to an insurance company for a ransom. But Rapley reports: ‘Ransoms are a problematic area. Here we may argue that such payments fall within the UK Proceeds of Crime Act as a payment for stolen property or as money laundering.’

The subject of theft raises a perennial issue – rights of ownership. ‘The same themes occur in art transactions – attribution, authenticity, ownership and condition’, says Karen Sanig. All point to the care that needs to be taken by buyers and sellers and which is urged by lawyers. ‘There’s no central registry of art ownership – unlike property. The onus is on the purchaser to do due diligence, which they often don’t understand. They rely on the seller’s integrity’, says Sanig. Rights of ownership depend on the jurisdiction in which the title to art is transferred, she advises: ‘A common misconception is that a purchase in good faith passes good title. In some jurisdictions it does – in others it doesn’t. It also depends on the limitation period for bringing actions. In England in the case of theft, an action must be brought within six years of the last goodfaith purchase.’ National laws also determine whether auctioneers guarantee title to works being sold, says Lucian Simmons of Sotheby’s, although he notes: ‘But even in places where we’re not obliged to give a warranty of title by law, we’re anxious to see that the artworks we sell are free from claim.’ 

Passion

The recurring problem that art lawyers see is that there is often scant paperwork in art transactions. ‘Auction houses have detailed written conditions of sale but it’s been traditional not to rely on written contracts in private sales’, says Sanig. The cause of the paucity of documentation, she says, is that art is a passion. ‘Collectors don’t apply the same business habits to buying artworks as they do to buying business assets. But when they’re buying they should have agreements covering title, condition, export licences and so on.’ Massimo Sterpi agrees that buyers underestimate their need for care. ‘Art is a personal interest so attitudes are different. But I think that lawyers’ work will grow as collectors increasingly recognise the need to protect themselves better.’

Art law practitioners say that those in the field need particular attributes. ‘You must be patient, discreet, tenacious and prepared to make people want to settle’, comments Sanig. A thorough knowledge of the milieu is essential. ‘With contemporary artists, for example, you must understand where they are in the market and how they would like to be considered in the art world’, says Sterpi. And all lawyers working in the field need good negotiation and dispute resolution skills, insists Jo Backer Laird. ‘You have to determine what’s really motivating the parties.’ But tricky questions and issues of policy enrich art law practice, she says. ‘In contemporary art, you may have to consider whether there’s copyright in a piece of conceptual art. In sovereign claims, important philosophical and moral issues are involved.’ Whatever the demands of the area, practitioners enjoy their jobs. At Sotheby’s, Simmons reports: ‘You can help people who lost property 70 years ago – that’s very satisfying.’ And Sanig too finds her work constantly invigorating. ‘It’s an exciting, fascinating area of practice that requires diverse legal skills in an international arena’, she says. 

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Diana Bentley is a former practising lawyer and is now a journalist, writer and public relations adviser based in London. She can be contacted by e-mail at dianab@dircon.co.uk.

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