The issue of authenticity is again
being hotly discussed because a bill is making its way through the New York
State Legislature which would enhance protections against lawsuits for experts
who provide authentication services.
Obviously, appraisers of all stripes should applaud and support the
effort to enact this legislation. We
have been hearing a lot these days that authentication is hard to come by
because of the threat of lawsuits. I
think that both the problem and the solution are overstated, especially as it
relates to appraisers; the headlines and the received wisdom about the issue
need to be examined more closely. While
the authentication process can be complicated by the legal system, an appraiser
can work intelligently and professionally with an expert with little risk to
either themselves or their client.
The bill in question (S06794) is
actually worth a read; it is short and succinct (You may see it here) Basically, it would add a section to
New York State’s Arts & Cultural
Affairs Law, allowing victorious defendants in art authentication suits to have
their costs paid by plaintiffs, and requiring plaintiffs to “prove the elements
[of their claim]…by clear and convincing evidence” in order to succeed in their
suit. In US law, it is extremely rare
for defendants to collect from plaintiffs, so this is a rather dramatic
change. Furthermore, requiring ‘clear
and convincing evidence’ is much stronger than the current ‘preponderance of
evidence’ standard. Nicholas O’Donnell,
a prominent art lawyer and author of the excellent Art Law Report blog is
quoted in a recent article in Gallerist by Daniel Grant: “the claimant would need to show that “my
expert is clearly right and there is no realistic possibility that the other
expert is anything but wrong.” Along with the requirement that an unsuccessful
claimant pay the authenticator’s legal costs, the bill “tells people not to
bring a case unless they’re absolutely sure they’re right.”
It is hard to argue that this bill
is anything but a positive development.
New York State, along with California, leads the country in developing
art law legislation, so if it can make it here, it will probably become widely
adopted throughout the US, and will likely influence other countries’ thinking
about the matter as well. (Actually,
European law grants a lot of power to artists and their heirs in matters of authenticity,
but that is another matter).
But a number of things surrounding
the whole discussion don’t quite ring true to me. Many observers note that authentication
boards are disbanding and there is a widespread notion that authenticators are
currently out of business. The hope
seems to be that they will all immediately start working again should this bill
become law. Then, there is also a sense
that had the law been on the books, massive frauds such as the Knoedler debacle
would have been curtailed. I think the
real problem here lies in the way in which academia and the market interact;
this is not going to be solved overnight and the current bill in Albany will
certainly not be the end of the discussion.
According to Ronald Spencer, a
widely admired lawyer who practices art law, and who has written extensively on
the subject, there are six “…common causes of action asserted against those who
authenticate works of visual art”. He
lists them in his essay “The Risk of Legal Liability for Attributions of Visual
Art” in the book The Expert Vs. The Object: Judging Fakes and False
Attributions in Visual Arts which he edited, and which is required reading
for anyone interested in the subject (bits of it are available on GoogleBooks):
1.
Failure to exercise reasonable care
2.
Product Disparagement
3.
Breach of Contract
4.
Negligent misrepresentation and Fraud
5.
False Advertising (both under state law and the
Lanham Act)
6.
Defamation
Hahn
v. Duveen, one of the earliest cases where authenticity and the legal
system interacted, nicely encapsulates the entire issue and is thus often used
to start discussions about it. In this
1929 case, Andrée Hahn, an heiress of considerable means who owned a work attributed
to Leonardo da Vinci sued the well-known art dealer Joseph Duveen. Sir Joseph, upon being shown a photograph of
the painting, had publically scoffed at the attribution of the work, and cast
aspersions on the expert who had authenticated it; these comments were
published in the New York World newspaper. Hahn apparently had a deal to sell the work
to the Kansas City Art Institute (which is still in existence) for $250,000
that fell through after Duveen’s published comments, and she sued Duveen for
disparagement.
Disparagement is the legal concept
by which the economic rights of an individual are protected against false
statements made by others. A number of
specific conditions must be proved for a suit for disparagement to succeed. Not only does the person accused of the act
have to have made a false statement, it needs to have been published, to have
caused an economic loss, and to either have been known to have been false by
the disparager or proved that he/she acted recklessly when making the
disparaging statement (i.e. the disparager should
have known).
To avoid the issue of disparagement,
when an owner or potential buyer of an object needs an expert opinion, they can
simply agree not to share the opinion with any third party, except perhaps a
specific appraiser, who would also be required to keep the opinion of the
expert confidential. An expert can and
should go a step further and require clients to execute an agreement not to sue
as a result of any opinion rendered.
While in the recent case of Simon
v. Warhol Foundation, a court did allow a lawsuit to proceed despite the
existence of such an agreement, this was because the plaintiff had triable
allegations that the defendant had engaged in fraudulent behavior. (Ron Spencer is my source here) Although courts are generally reluctant to
grant exculpatory language in an agreement much weight, especially when one
party is an expert and the other is not, the case of Lariviere
v. Thaw actually
upheld just such an agreement. Here, the
plaintiff tried to sue the Pollock catalog raisonne committee despite having
signed an agreement not to do just that and the court struck down his claim on
summary judgment.
What about the other items on Spencer’s list? Like disparagement, defamation would be
rendered moot by a confidentiality agreement, as would false advertising. Regarding the “failure to exercise reasonable
care”, I think we can all agree that no professional should be immune from such
a requirement. If you screw up your
work, there could be consequences. The
same goes for breach of contract or fraud. But in regards to risk created through good work, a very
straightforward confidentiality agreement would go a long way in solving this
issue.
Even without such an agreement, in
almost every case an expert, having done thorough research and written a proper
report, would be immune from such a high burden of proof. But, as noted by many writers on the subject,
it is not the outcome of such a lawsuit, it is the expense of paying to defend
oneself that is the problem.
Interestingly, the very subjectivity that makes it difficult to win an authentication case also means
that expensive litigation can start almost immediately in such cases, as a
plaintiff can reasonably begin to challenge the expert’s credentials,
methodology and motives.
Like many subsequent disputes, the
Duveen trial was a “battle of the experts”, where each side presented Leonard
scholars who disagreed. The law then, as
now, with the ‘preponderance of evidence’ standard commonly used in civil
matters, allows the plaintiff to hire their own expert, who can then attack the
opinions of the defendant’s expert. (And,
as noted above, the new NY law seeks to up the bar in this regard.)
After a long, inconclusive legal
struggle, and facing a very wealthy adversary, Lord Duveen eventually settled the
case against him by paying $60,000 rather than continuing to defend
himself. This echoes down to the current
discussion, where the legal costs, actual or threatened, are said to drown out
the honest opinions of experts. Indeed,
Duveen appears to have been right—the “Leonardo” in question has long been
considered to be by another hand.
So Duveen got screwed, right? He told the truth and had to pay? It should be noted that he did act recklessly
in making such inflammatory comments to a reporter. Duveen seems to have been the kind of dealer
in the art world whose business plan included attracting attention to himself
(another aspect of the case which echoes down to the present day). Had he simply refrained from promulgating his
opinion, he’d have been in better shape, but maybe the $60 grand was a
reasonable price to pay for all of the publicity the case generated. But yes, it would appear that Duveen had to
fork over $60,000 in a situation where he correctly outed a Leonardo copy being
passed off as original.
This brings up another common
refrain in the discussion around this issue: that honest public debate has been
stifled by the threat of lawsuits to the detriment of the art world in
general. If only (the sentiment seems to
be) there had been a modern-day Duveen strolling the aisles of the ADAA fair
telling everyone that the Pollock in the Knoedler booth was a fake, we would
all have been spared the awful fallout of that mess. There were, allegedly, whispers, but nobody
said anything out loud. According to Patricia Cohen in the New York Times,
several other scholars and foundations did not share their deeply held
suspicions about a number of the Knoedler fakes on advice of their
lawyers.
I certainly believe that this is
true. And I am not sure that it could be
any different. The Constitution grants
all of us the freedom of speech. But
lawmakers have constrained this right when it intersects with economic
activity. While I can say pretty much
whatever I like about a public figure running for office, this is not the case
when business is being done. The reason disparagement is illegal stems from
Congress’ desire to make sure that sellers can market their goods without
competitors or anyone else wrongly slighting their wares.
From what I have read, none of the Knoedler
buyers seem to have engaged an independent expert to provide them with their
opinion. There were consultants,
advisors and intermediaries galore, but, at least from what I can tell, none of
the victims hired an authenticator prior to purchase. The buyers could have retained an expert (or
experts), agreeing that the expert’s opinion would remain confidential. If the expert found the work to be
problematic, the client could simply have declined to make the purchase. End of story.
Knoedler would have had no grounds for a lawsuit for disparagement or
any other theory, if the expert’s opinion was kept confidential.
In fact, this sort of set-up,
whereby client and expert work together and do not share the results, works
every time. The issue which really is of concern is the
demise of free and open discussions where groups of scholars can present their
methodologies and findings and reach consensus about authenticity of specific
works. And that is a shame, because
consensus is a powerful way to search for the truth, but the law is very clear
that not all types of speech are protected.
The way this all used to work is
that every major artist had a few experts (usually academics or museum
curators) who devoted their lives to studying the work and who assembled a
catalog raisonne. Dealers and collectors
would turn to them in matters of authenticity and once they gave their opinion,
that was pretty much that.
Now, however, there is very little incentive for such an expert to express their learned opinions and the current bill under consideration is unlikely to tip the balance. After all, why would a scholar stick their neck out, even if they might be able to collect legal fees from their adversary. They will still have to spend some time if they are sued and they will still have to pay their lawyers upfront. And, as Donn Zaretsky points out in his Art Law blog, if their adversary turns out to be judgment-proof, they will be stuck. And of course, they might lose, or even worse, be shown publicly to have made a mistake. Nobody would welcome having a hostile lawyer review their work no matter what legal protections they might have.
Everything I have read blames this
state of affairs on the amount of money now in play in the art world. This makes sense. If you own an asset that is potentially worth
$10,000, you are not going to call up your lawyer if someone says it is a fake. But if it’s worth $10 Million, you very well
might.
So, what we are talking when we talk
about authentications and the jeopardy that authenticators face is when the art
in question is expensive. No client is
going to pay an expert to authenticate an object that is worth $10,000 and then
sue them if the expert says it is worthless. After all, the plaintiff has to pay their
lawyer upfront as well. I am not saying
here that the expert (or the appraiser) only has to worry if the art is worth a
lot. (I actually think $10,000 is a lot
of money). If you screw up, you are on
the hook. What I am saying is that you
aren't going to be sued for disparagement.
So, when we hear about authentication committees being disbanded, it
only affects a small number of objects that we might encounter. The everyday business of appraising and
authenticating continues. And, I, for
one, am happy that a lot of money has flowed into the art world; I am not sure
why we should decry this fact.
Of course, appraisers like to point
out that they are not authenticators, and our reports are full of disclaimers
to that effect. In any instance where
there is a question about authenticity, we are only required to take into
account how such questions impact the value of the appraised work. So, like the rest of the art world, we rely
on experts but do not share much of the risk.
Regarding the big ticket items, the
real problem is that professional ethics constrain academics and other
authenticators from earning a proper sum of money to render opinions. Much like NCAA athletes, these knowledgeable
people create gobs of money for others which they themselves are not allowed to
taste. (Full disclosure: I serve on the
Norman Bluhm Catalog Raisonne Committee and am not paid for my work). I did not do a ton of research here, but
checking around a bit I found that, by way of example, the Francis Bacon
catalog raisonne committee requires a 500 GBP payment for their services, the
Sam Francis Foundation will supply owners with documentation of works from
their archives ‘for a nominal fee’ and IFAR charges $3,000, plus expenses for
scientific testing and so forth when they undertake research into authenticity. (It should be noted that IFAR requires owners
to allow them to publish their conclusions—an extremely positive
requirement). But the sense seems to be
that no entity or person with an academic or museum background should charge a
lot for authentications.
The College Art Association has this
to say in their “Standards and Guidelines: Authentications and Attributions”
In rendering an opinion, it is recommended not to charge a
fee, unless circumstances would not be compromised by doing so. One exception
to this recommendation would be if the artwork is authentic, published in a
catalogue raisonné, and has never been questioned, and if the request is
clearly for an affirmation of authentication. Other exceptions would be fees
paid to technical experts such as conservators, who are part of a consensus
issuing an opinion, and fees paid to authentication committees constituted by
artists’ foundations or similar institutions.
But how does it make sense that
someone who has deep knowledge and has spent their life becoming an expert on
an artist is constrained when it comes to charging what the market will
bear? Obviously, I am not suggesting that
experts be incentivized in any way to sway their opinion about the objects they
examine. And the CAA is really trying to
protect their members as much as impart an ethical judgment. But why not allow
experts to charge enough to cover the expense of an insurance policy that would
pay their legal expenses if they got sued?
Why not compensate these individuals in such a way as to make it worth
their while to express their opinions publically? And why is there this sense that artist’s
foundations should only collect a modest fee?
If we are worried that the money
might corrupt academia, might a transparent market not be a suitable way to
weed out incompetent or corrupt experts?
Looking again at the Knoedler case,
there are hints, glimpses and innuendo that some scholar-experts might well
have been tempted to cross the line and get paid a bit extra for the services
they were providing. I don’t wish to
substantiate them here and these allegations can be accessed elsewhere. I am bringing it up to ask, if this was the
case, who can blame them? Huge amounts
of money were trading hands, why should the expert be underpaid? If they were paid a proper fee, which was disclosed
openly, might that not have been better?
Might that not have fostered the open debate and discussion that we all
would like to have seen?
It is often said that the art market
is one of the last bastions of a truly free market, which operates without much
governmental oversight. Why are we
looking to the government to rectify a problem that has arisen because a lot
more money has flowed into this market?
Rather than keep the price of authentication artificially low and
pretend that nothing has changed, we should accept that a new way of doing
things is in order. So, while I certainly
support the passage of law 6794, I think a much more substantial reboot is in
order.
I have tried to acknowledge all of
the sources I consulted in preparing this post within the text itself. A complete list is below.
Patricia Cohen, “Selling A Fake
Painting Takes More Than A Good Artist” The
New York Times, May 2, 2014. link
Daniel Grant, “New Legislation Would
Protect Art Authenticators…” Gallerist.com June 4, 2014 post link
Nicholas O’Donnell, “Analysis and Views
Develop on New York Art Authentication Protection Bill”, artlawreport.com link
Ronald Spencer, "Protection from Legal Claims for Opinions About the Authenticity of Art", Spencer's Law Journal, Winter 2012/13 (Volume 3, Number 3) link
Ronald Spencer, editor, The Expert Vs. The Art Object: Judging Fakes and False Attributions in Visual Arts
(Oxford University Press, 2004) You can buy the book here: link
Tracy Zwick, “Good News for People
Who Bear Bad News: Legislators Seek to Shield Art Authenticators” Art in America
(online), June 5, 2014 link
Donn Zaretsky, "Authoritative Authentication is Essential to a Well-Functioning Art Market" The Art Law Blog, June 6, 2014 post. link
