Art & Antiquities Disputes

• Claims

• Citation in Whitaker’s Almanack – Art page (2018)

• The impact of BREXIT on the UK art market


Due diligence involves investigating:

(a) provenance; and
(b) condition.

‘Establishing good title before exercising a transaction by searching its provenance or history of ownership is an important first step for a collector, auction house, dealer, or museum. An art object may possess an impeccable chain of ownership, however, it is not the exclusive answer to the issue of good title … The work itself may be a forgery and not be authentic. An art expert that issues a certificate of authenticity might change his or her opinion based on new facts or revelatory technology. A buyer relying upon one expert’s professional judgment that is disputed by a different art appraiser or art historian might cause the value of the acquired art to decrease dramatically, which might lead to breach of warranty claims. Another concern, especially for works of antiquities and even post-modern art, is that because of their rarity they may have acquired a unique intrinsic, and sometimes sentimental, “inflated” value. In a celebrity-driven commercial world, art connected to the social status of the seller may impact the work’s market value. A fundamental duty exists for a buyer of an object d’art to examine the work’s provenance, authenticity, and value before making a purchase. It is also imperative to know and trust the party that is brokering the art transaction.’ (Jones, page 57).

‘Essentially an appraisal is an informed opinion or expert estimate of the monetary value of an object. Appraising original artwork is fraught with difficulty … When original works of art change hands, it is often done privately, and the prices are not necessarily made publicly available. Objective factors, such as the rarity of the work, may tend to increase value, since the laws of supply and demand influence the art market as they do any market … The physical condition of a work may also have an effect on the price … The provenance of a work is a critical factor in valuation. For example, if a work originated from the estate of the artist, a prominent collector, or had been owned by or exhibited in a museum or by a prominent art dealer, the history will enhance its value, because it is an indication of high quality. Celebrity ownership is also an important factor in prices achieved for works of art as well as memorabilia. This is often true even if the object has no great intrinsic value … Subjective determinants, such as taste, style and reputation of the artist, influence prices, and evolve constantly. An artist’s stature may be difficult to measure objectively, but reliable indicators include exhibition history, critical response, publications, and inclusion in important public and private collections. Still, often the relative quality and value of a work is debated, even among appraisers … When it comes to the work of recognised artists, authenticity is without doubt the single most important factor that determines the value of the work of art … An appraisal can take the form of an oral opinion, with minimal or no supporting data, a brief letter, or a highly detailed formal written report prepared by an expert based on extensive research and documentation.’ (Prowda pp.203 – 205).

‘Upon consignment, an in-house specialist or external expert appraises each lot in order to generate a description for the sale catalogue. In appraising an art object, the expert identifies its attributes, namely its creator or the respective place of origin or discovery, the date or period of creation and provenance. The final result of that assessment is expressed in the art object’s attribution … A sleeper is an artwork or antique that has been undervalued and mislabelled due to an expert’s oversight, which consequently is undersold at auction. The auction house’s misattribution is printed in the sale catalogue as well as displayed on its website, communicated to potential clients and to those attending the sale. Accordingly the art object is introduced into the public art market under a wrong label … When a sleeper is introduced at auction, the expert has failed to correctly determine the valuable attribution of the art object. As a result, the art object is sold for a considerably underestimated price …
A misattribution is an erroneous attribution: the error lies in the wrongful identification or appreciation of the object. With sleepers, the misattribution must also devalue the art object. Essentially, three types of erroneous and undervalued attributions produce sleepers … attribution of the artwork or antique to a lower-valued creator instead of the actual higher-valued creator … incorrect dating of the object, which is essentially relevant for antiques; and … incorrect provenance or ownership history. To be clear, an art object’s physical condition is not an attribute. The erroneous identification of one attribute often inevitably leads to a wrong assessment of many of the art object’s other attributes.’ The Sale of Misattributed Artworks And Antiques At Auction by Anne Laure Bandle, published by Edward Elgar.

‘An auction is defined by its three players – the consignor (seller), the auction house (agent), and the buyer – and the intricate relationships among them. [The Consignor-Action House relationship] is characterised by its fiduciary nature. The auction house must act in the utmost good faith and in the best interest of the principal, the consignor, at all times. A breach of fiduciary duty could give rise to liability on the part of the auction house as agent for the consignor as principal, whether the cause of action is based in contract or negligence.
The auction process begins when a consignor decides to sell property through an auction house. Sellers are typically known to consign works from their collections in the event of death, divorce, debt or discretion … the last point referring to sellers who do not have to sell but chose to do so in order to take advantage of a strong market…
The job of the auction house is twofold: to attract consignments and to conduct the sale, both in a responsible manner. First the auction house must assess whether an item is “auctionable,” that is whether it should be sold in a public fashion at auction, or privately via a “private treaty sale,” or sold through a private dealer or gallery

Once an item is deemed auctionable and the consignor decides to go forward with the sale, the parties will enter into a written consignment agreement …
Most major auction houses, including Sotherby’s and Christie’s, require the consignor to make certain representations and warranties as a condition to accepting the property for sale. The most important of these concern legal title. Specifically, the consignor must represent and warrant ownership and clear title to the work being consigned, free of all liens, claims, and encumbrances, and to support the provenance of the work if it is questioned. Upon sale the consignor warrants that good title and right to possession of the work will pass to the buyer free and clear of any liens, claims, or encumbrances.
The consignor is also required to represent and warrant that he will indemnify the auction house if there is a defect in title …

[The main concerns] of the buyer are authenticity, provenance, and clear title. The buyer relies on the credibility and expertise of the auction house and on the representations about the property that are contained in the auction catalog. Therefore, if an auction house represents to the buyer that the work is authentic, the buyer has a right to rely on that information. Later, if questions arise concerning the authenticity of the work, the buyer will seek recourse from the auction house, even if the identity of the consignor is disclosed, since the auction house is considered a market expert and has made representations in the catalog concerning authenticity …

The buyer is also entitled to rely on the auction house for assurance that he will be granted clear title to the item purchased whether or not the principal is disclosed …

All bidders at an auction can assume that the auction process is conducted with integrity and that the estimated prices are reasonable, and can bid with confidence on the assumption that the auction is not subjected to illegal manipulation by the auction house in order to obtain higher prices (no shill bidding).

Because courts have enforced time limitations for breach of warranty of authenticity claims, buyers have resorted to other theories, such as negligent misrepresentation and fraud.

The most common tort claim asserted is negligent misrepresentation, in which a buyer claims the auction house represented that the work was authentic, and it is proven to be inauthentic. A prerequisite to negligent misrepresentation is the existence of a “special relationship” between the parties, which under New York law is a fiduciary one, requiring more than an arms-length business relationship.’ (‘Prowda pp.184 – 199).

In private treaty sales it is usual to carry out a search of a stolen art database, e.g. Interpol, the ICOM Red List, the FBI, the Art Loss Register and Art Recovery International.

Where the forger is the seller, or is connected to the seller, the buyer is entitled to rescind the contract on the basis of fraudulent misrepresentation.
Where the seller is innocent but mistaken, in the absence of an express warranty of authenticity, provided the view expressed by the seller is reasonable and genuinely held, there is no contractual remedy against the seller. (See Drake v Thos. Agnews [2002], Taylor Thomson v Christie’s [2005] and Thwaytes v Sotheby’s [2015]).

However, a dealer or international auction house may owe a higher duty when selling an item within the scope of his advertised expertise.
Each case will depend upon on its own facts.

Whatever the size of gallery, there are usually two forms of transactions between dealer and artist:

(a) an outright purchase of artwork by the dealer; and
(b) more commonly, a consignment. Which is an outright purchase.

The relationship between dealer and artist is a buyer-seller relationship, and not a fiduciary relationship, because the dealer is not acting as the artist’s agent, but rather becomes the owner of the work.

In a consignment transaction, the artist consigns the work to a dealer.
Artist-dealer representation agreements are sometimes confused with simple consignment agreements.

Each form creates different legal obligations:

(a) a consignment agreement ordinarily addresses particular works for a limited transaction (for example, a specific gallery exhibition); and
(b) an artist-dealer agreement usually includes general provisions that pertain to consigned works and a separate consignment agreement or rider identifying specified works.

Avrora Fine Arts Investment Ltd v Christie, Manson & Woods Ltd [2012]:
Drake v Thos. Agnew & Sons Ltd. [2002]:
Thomson v Christie Manson & Woods Ltd & Ors [2005]:
Thwaytes v Sotherby’s [2015]:

Statutes and Regulations
Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013:
Consumer Rights Act 2015:
Dealing in Cultural Objects (Offences) Act 2003:
Limitation Act 1980:
The Artist’s Resale Right Regulations 2006:
Sale of Goods Act 1979:
Tribunals Courts and Enforcement Act 2007 (Part 6):

EU Directives
EU Directive 2014/60/EU:
The Granada Convention 1985 (The Convention for the Protection of Architectural Heritage in Europe):
The Hague Convention 1954 (The Convention for the Protection of Cultural Property in the Event of Armed Conflict):
The Paris Convention 1954 (European Cultural Convention):
The Valetta Convention 1992 (The Convention for the Protection of the Archaeological Heritage of Europe):
The World Heritage Convention 1972:

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Useful Websites
Arrest of a vessel:
Arrest of Ships: Impact of the Law on Maritime Claimants by Stanley Onyebuchi Okoli:
A summary of ship arrest in the UK and in English law based jurisdictions:
Arts Council England:
Art and the Law:
Art law: Restrictions on the export of cultural property and artwork November 2017 – A report by the IBA Art, Cultural Institutions and Heritage Law Committee:
Art Law London Blog:
British Art Market Federation:
Boodle Hatfiled Art Law Blog:
Christie’s Education:
CLANCCO (Art and Law Resources):
Courtauld Institute of Art:
Design and Artists Copyright Association:
Department for Culture Media and Sport:
How to Prove ‘Authenticity’ in Court: The English Perspective by Lisette Aguilar, Associate General Counsel Sotheby’s:
Institute of Art and Law:
Museums Association:
National Gallery of Art (Washington DC) 2016 Annual Report:
Professional Advisors to the International Art Market:
Society of London Art Dealers:
Sotherby’s Art and Law:
TEFAF 2016 Art Market Report:
The Art and Antiques London Stolen Art Database:
The Association of Art & Antique Dealers:
Thwaytes v Sotherby’s [2015]:
Today’s Art World Blog:
UK P&I Club Ship Arrest Briefing:
V&A Art and Law Training:
WIPO Alternative Dispute Resolution (ADR) for Art and Cultural Heritage:


‘But hanging over the future of the art market – as with the rest of the UK – is the cloud of Brexit. Analysts are (still) clamouring to figure out what the impact of the UK leaving the EU will be on the art world. Barrister Carl Islam, among many others, was keen to point out that Brexit will lead to an increased regulatory burden and transaction costs on all sales of art. Pontus Silfverstolpe of search service Barnebys highlighted that leaving the customs union would drastically impact the way that we currently, and freely, sell and move art around the EU – in a wholly negative way.’

(Whitaker’s Almanack – Art page by Eddy Frankel

Mr Frankel concluded,

‘The impact of Brexit is not some faraway thing, either: it is already being felt. A general decline in the global art market in 2016 may have masked the impact of the referendum, but there was nothing of the sort to hide behind this year. While UK art exports dropped 2.2 per cent to £4.8bn in 2017, imports slumped 21 per cent to £1.8bn. A weak pound played a large role in that, but general reluctance in Europe (the UK’s most regular art trading partner) to send art and antiques over the channel accounts for the rest. Either way, the potential future impact of Brexit has again left the UK art market fearful for another year.The big headline to take from all of this is that even if the auction world looks to be doing well, it is so reliant on the top end of the market that its future is shrouded in worrying uncertainty – combine that with the all-encompassing fear of a Brexit future and you have a recipe for serious uneasiness.’
Leading Brexit politicians argue that by freeing the UK art market from the shackles of ARR through post-BREXIT reform, the overall volume of art transactions in the UK will increase swelling the coffers of the treasury to fund public services. In other words, that BREXIT is an opportunity. Based upon the facts and law set out below, I conclude that the opposite will happen. In other words, that the volume of transactions executed in London will go down and not up.

My new book. the ‘Contentious Trusts Handbook’ also contains a practice note contributed by the Art Historian Pandora Mather-Lees about Trustees’ Duties in relation to art assets.


• Introduction
• Economic analysis
• Artist’s Resale Right (‘ARR’)

It is an economic fallacy to suppose that by freeing the UK art market from the shackles of ARR through post-BREXIT reform, that the overall volume of art transactions in the UK will increase swelling the coffers of the treasury to fund public services.

Based upon the expert sectoral market analysis and economic evidence referred to below, it is obvious that the opposite is likely to result, because BREXIT will result an increased regulatory burden and higher EU cross-border transaction costs. In any event transformation cannot occur during a transition period, and politically ARR is unlikely to be high on the political agenda of whichever party or coalition is in power when BREXIT is implemented.

Liberalisation of Britain’s international Trade market in art and antiquities also overlooks the policy rationale underlying the Artist’s Resale Right Regulations 2006 (the ‘Regulations’) (outlined toward the end of the post), which is to give artists an on-going royalty stream from their work – in the same way as authors, musicians and film directors receive royalties from their work – and to enable artists to benefit from the resale of their artworks in the secondary market.

Economic analysis

‘In order for the UK to maintain its status in the global art market it must attract the highest priced art available for sale worldwide by providing the most favourable and most competitive conditions. Fine art (paintings, drawings, prints and sculpture) dominates the art market, accounting for 64% of all sales by value in the UK in 2016. The analysis of fine art sales at auction … demonstrates the significance of high value art sales to the British art market … In the UK, although 89% of the volume of all transactions in the market was accounted for by works priced at less than $50,000, they made up just 10% of the value of all sales. 90% of the overall value of the market was accounted for by individual sales of over $50,000. Works priced at over $1 million represented a 57% share, despite accounting for just under 1% of the number of individual transactions. In the market for works priced below $50,000, the US, UK and China accounted for a 67% share by value and 51% of all individual transactions. However in the market priced over $1 million, their combined share rose to 94% (by value) and 92% (by volume).For individual sales over $1 million, the UK accounted for a 22% share by value and 21% by volume of the world market. Within the EU as a whole, 81% of the number of transactions at this level in 2016 were in the UK and an 87% share by value. For individual works sold for over $10 million, the UK accounted for a 24% share by value and volume in 2016. Only 2% of the total value of auction sales over $10 million took place outside the top three markets, and just 3% of all individual transactions. Within the EU as whole, the UK accounted for 91% by value and 89% of all individual transactions above $10 million. Although HMRC’s official figures suggest that the bulk of the trade both in and out of the UK by value is with countries outside the EU, with just 16% of imports into the UK coming from within the EU, and just under 3% of exports destined to countries within the Single Market, this picture is incomplete. HMRC statistics understate the extent of intra-EU trade, because many EU sales under the VAT margin scheme are not necessarily recorded. Additional research carried out in the auction sector in 2016 showed that while the US was the most important trading partner by value, for some of the major auction houses, consignments from EU member states accounted for up to 25% of their UK sales on average, while up to 20% of their exports were destined to EU buyers. In the dealer sector also, the main dealer associations reported that on average between 10% and 22% of dealers’ purchases for subsequent sale were made in the EU, and EU purchasers accounted for 15% – 20% of all their sales. The art market contributes to the UK economy through taxes and levies paid to the Exchequer on sales, trade, incomes and profits. These amounted to an estimated £1.46 billion in 2016. It is worth noting that the fiscal contribution of the art trade has grown at more than double the rate of underlying sales since 2013: sales in the art market increased in value by 15% between 2013 and 2016, whereas the contribution made through taxation increased by 22%.

Sales in the art market are divided into those related to Fine art, which includes paintings, sculptures and works on paper (including watercolours, prints, drawings and photographs); and Decorative art, which includes furniture and decorations (in glass, wood, stone, ceramic, metal or other material), couture, jewellery, ephemera and textiles. The fine art sector dominates in terms of values and accounted for close to 64% of all sales by value in the UK in 2016. Given the significance of the fine art sector, the analysis in this section looks at the sectors that comprise the fine art market. While both dealer and auction data is used to research trends within the market and estimate total sales, precise analyses of prices and individual sales within sectors of the art market relies primarily on auction data, which provides the only large scale, global and publicly available information on individual transactions. The sectoral analysis that follows is based only on auction results In the UK fine art auction sector, Modern and Post War & Contemporary art accounted for a 75% share of sales by value in 2016, a percentage which reflects the global market as a whole. Considering both dealers and auctions, these two sectors represented just over half of the value of the UK art market in 2016. While Post War & Contemporary art remained the largest sector of the fine art market in the UK (with a share of 45%), after two years of growth from 2013 to 2015, sales declined significantly in 2016 (by 32%) to $976 million. Worldwide, sales in this sector also fell in 2016 by 18%. Sales in this sector in the UK are now 37% lower than their peak in 2008 of $1.6 billion. The UK’s share of global sales in the Post War & Contemporary sector fell 3% in 2016 to 14%, and has declined ten percentage points since its high point in 2008 of 24%. However, the UK is by far the largest Post War and Contemporary market in the EU, accounting for 65% of the value of sales and 24% of all transactions in 2016. Within the Post War & Contemporary art sector, sales of work of living artists at auction accounted for 20% of total sales in UK fine art auctions in 2016 (or 44% of the Post War and Contemporary sector by value). Sales in this sub-sector reached $434 million in 2016, a decline of 41% year-on-year (against a global decline of just 7%). The UK accounted for 19% global share of the value of living artists sales at auction in 2016, down from 30% in 2015. Within the EU, the UK accounted for the largest share of sales, with 72% by value and 30% by volume in 2016. European Old Masters dominate the Old Master sector in the UK, accounting for 94% of the value of Old Master sales in 2016, with only 6% of sales accounted for by non-European artists. The UK was the largest sales centre for European Old Master works at auction in 2016 with a share of 43% (up 4% year-on-year). Sales of European Old Masters increased in the UK by 16% in value in 2016, by far the best performing of the fine art sectors. The UK also has the highest share of sales in Europe in the sector, accounting for 71% of the value of EU sales of European Old Master works and 40% of number of lots sold.’
The British Art Market 2017 – An Economic Survey prepared for The British Art Market Federation by Arts Economics.

What impact will BREXIT have on art transactions in London?

In ‘Brexit: opportunity or threat for the Art industry?’ Macfarlanes LLP conclude:

‘It is likely that Brexit will make the movement of art between the UK and EU more burdensome and costly, but there are also certain opportunities for the UK art market to benefit from Brexit. However, such changes are unlikely to take effect for some time, particularly as the government has announced its proposal for a transitional / implementation period of “around two years” (which may ultimately be considerably longer than that). If that position can be agreed with the EU, the UK would, during such transitional period, continue to be bound by the existing structure of EU rules and regulations, which would include continued membership of the Customs Union and the Single Market.

This transitional / implementation period would be welcome in providing more much needed time to agree and implement a new trade agreement between the UK and the EU as well as to consider necessary amendments to domestic UK law and the UK’s future relations with other countries. We have in this note considered just a few potential impacts Brexit will have on the art market, but there are many others, including restitution claims for cultural property illegally removed between EU member states and the anti-money laundering regime, which will need to be considered once the position is clearer.’
A key opportunity is that Brexit gives the UK Government the opportunity to revisit the Artist’s Resale Right Regulations 2006, either through reform or abolition. The results of a survey of the PAIAM members on ARR are set out before the Appendix to the PAIAM note ‘What impact might Brexit have on the Artist’s Resale Right?’

The artists’ resale right (ARR) gives creators of original works of art (including paintings, engravings, sculpture and ceramics) a right to receive a royalty each time one of their artworks is sold on the secondary market in the UK by an art market professional (e.g. an auction house, gallery or dealer) for more than €1,000. There is an exception: no ARR is due if the seller acting in the course of business acquired the artwork directly from the artist less than 3 years before the sale and the sale price does not exceed €10,000.
ARR affects two major areas of the UK art market – Modern art and Post War & Contemporary.

While, as stated above, the UK is by the largest Post War and Contemporary market in the EU, accounting for 65% of the value of sales and 24% of all transactions in 2016, the UK’s share of global sales in the Post War & Contemporary sector fell 3% in 2016 to 14. The comparative advantage of abolishing ARR in order to compete with other markets outside the EU therefore needs to be weighed in the balance against the comparative costs and regulatory burden imposed by BREXIT on other art transactions.
Furthermore as the PAIAM Note states,

‘Despite fears that the introduction of ARR would negatively impact the UK art market and divert sales to non-ARR markets, there has been no evidence to date to support this. In 2006 when ARR came into play in the UK, The European Fine Art Federation (TEFAF) published a report that valued the UK art market at over £8.5 billion.61 Although the global art market felt the impact of the recession – contracting 41% in 2009 from its peak in 2007, by 2010 the global art market was in recovery and rose by 51% to €43 billion.

In 2011, the European Commission’s report on ARR concluded that “no clear patterns can be established to link the loss of the EU’s share in the global market for Modern and Contemporary art with the harmonisation of provisions relating to the application of the resale right in the EU on 1 January 2006.”
Looking at the recent figures in TEFAF’s latest report, the global art market in 2014 has reached its highest ever-recorded level – a total value of €51 billion worldwide and a 7% year-on-year increase from the 2007 pre-recession level.

This growth trend was also evident in the UK which grew 17% in 2014, increased its own market share by 2% and was valued at €11.4 billion (approximately £9 billion and higher than its value in 2006 when ARR was introduced). In context, the ARR royalties distributed by DACS represent just 0.1% of the total market value in 2014. Auction sales are also on the rise. According to the report, public auction sales accounted for 48% of the overall market in 2014 with total sales exceeding the peak in the market in 2007 and have recovered value by 88% since their low point in 2009.

Post War and Contemporary art sales at auctions, which make up 48% of all global fine art sales followed by modern art at 28%, have grown to record levels as well. In 2014 Post War and Contemporary sales saw an all-time high of €5.9 billion globally, which has sharply risen since its post-crash low of €1.42 billion in 2009. 65 These two sectors are predominately responsible for ARR royalties with modern art covering artists born between 1875 and 1910 and Post War and Contemporary for artists born after 1910. In the UK Post War and Contemporary art sales represent €1.1 billion and modern art sales €753 million – both increasing on the previous year’s figures. 66

Compared to ARR royalties DACS collected in 2014, this represents just 0.64% of the Post War and Contemporary and Modern art sales in the UK. The royalties collected and distributed for ARR are only a minor fraction of a strong Contemporary and Modern art market. Furthermore, a survey of art dealers at the London Art Fair revealed that their biggest concerns are business rates and rents; nonetheless, 85% of those surveyed believed that the British Modern and Contemporary art market in 2016 would remain strong or fare better.67
Lastly, visual arts as part of the wider UK creative industries is immensely valuable to the UK economy. For every £1 of Gross Value Added (GVA) by the arts and culture industry, an additional £1.43 of GVA is generated in the wider UK economy.68 Overall, visual arts contribute US $3 billion GVA to the UK economy each year and employs more than 37,000 people.’

Artist’s Resale Right (‘ARR’)

In the UK, the Regulations created an intellectual property right (“resale right”) which was previously unknown to United Kingdom law.
The Regulations implemented Directive 2001/84/EC of the European Parliament and of the Council on the resale right for the benefit of the author of an original work of art (‘the Directive’).

The Directive entered into force on 13 October 2001 and required transposition into national law by 1 January 2006.
The Directive was an internal market measure adopted under Article 95 of the EC Treaty which required Member States to introduce a harmonized right for authors of an original work of art, and their successors in title, to benefit from a share of the proceeds when the artists’ works are resold on the art market.
The Regulations introduce a new right which has not previously existed in the UK, although it has existed in several other EU Member States. The Directive has also been extended to the European Economic Area.’
Article 3 of the Regulations states,
(1) The author of a work in which copyright subsists shall, in accordance with these Regulations, have a right (“resale right”) to a royalty on any sale of the work which is a resale subsequent to the first transfer of ownership by the author (“resale royalty”).
(2) Resale right in a work shall continue to subsist so long as copyright subsists in the work.
(3) The royalty shall be an amount based on the sale price which is calculated in accordance with Schedule 1.
(4) The sale price is the price obtained for the sale, net of the tax payable on the sale, and converted into euro at the European Central Bank reference rate prevailing at the contract date.
(5) For the purposes of paragraph (1), “transfer of ownership by the author” includes in particular—
(a) transmission of the work from the author by testamentary disposition, or in accordance with the rules of intestate succession;
(b) disposal of the work by the author’s personal representatives for the purposes of the administration of his estate; and

(c) disposal of the work by an official receiver (or, in Northern Ireland, the Official Receiver for Northern Ireland) or a trustee in bankruptcy, for the purposes of the realisation of the author’s estate.
Regulation 9(1) further provides ‘Subject to regulation 10(2), resale right in respect of a work is transmissible as personal or moveable property by testamentary disposition or in accordance with the rules of intestate succession; and it may be further so transmitted by any person into whose hands it passes.’
Resale right may be transmitted to:
1. a natural person (and where it is transmitted to more than one person, it shall belong to them as owners in common); or
2. a qualifying body.

Regulation 11 further provides that nothing in Regulation 9 prevents a resale right from being held, and exercised in respect of a sale, by any person acting as trustee for the person who would otherwise be entitled to exercise the right (“the beneficiary”), or from being transferred to such a trustee, or from the trustee to the beneficiary.

ARR entitles visual artists or their heirs to receive a royalty payment each time their work is sold on the secondary market in the UK through an auction house, gallery or dealer. The royalty is calculated as a percentage of the sale price, on a sliding scale ranging from 0.25 per cent to 4 per cent, subject to exemptions and a cap of €12,500 – see Schedule 1 of the Regulations.

The right lasts for as long as the copyright in the work subsists, which is normally for 70 years after the death of the artist. It may accordingly be
inherited by the artist’s successors. Two points arise from the fact that resale right was previously unknown to United Kingdom law. The first is that, where an artist dies before the Regulations come into force, there will at that time have been no resale right to pass to a successor. In regulation 16, the Regulations accordingly make provision for which of the artist’s successors is to be regarded as holding resale right in such circumstances. The second point is that the Article 8(2) of the Directive provides a special derogation which is limited to those Member States which did not previously have resale right in their national law. Such a State may prevent the successors of a deceased artist from exercising their resale right until 1st January 2010. Regulation 17 takes advantage of that derogation.

Resale right is declared by the Directive to be inalienable, and accordingly may neither be assigned nor waived. This principle is implemented in regulations 7 and 8. The limited exceptions provided by regulation 7(3) (transfer between charities) and regulation 11 (transfers of legal title to trustees) are not in reality a derogation from that principle, as the beneficial ownership of resale right is not thereby affected.

The Regulations also impose certain nationality requirements on the enjoyment of resale right (see regulation 10) . Only an EEA national, or a national of a country specified in Schedule 2, may benefit from resale right. This reflects the fact that (leaving aside EEA nationals, who must be treated equally with United Kingdom nationals) resale right is a right enjoyed on the basis of reciprocity. Thus only the nationals of countries which make resale right available to EEA nationals may benefit from the rights given under the Directive. That principle is also applied to charitable bodies, which may benefit from resale right only where they are based in such a country.