This article was published in The Times on 16 January 2014.
The recent case of the “fleamarket Renoir” serves as a reminder of the dangers in buying art. A woman in Virginia bought a small painting and a box of trinkets for $7 in 2009. It turned out to be a Renoir worth $100,000, but last week the Virginia court ordered it to be returned to the Baltimore Museum of Art, from where it had been stolen in 1951.
That was under US law, whereas in English law the result could have been very different, if the woman was, as seems, a bona fide purchaser who bought in good faith without being aware of the background. But art transactions often have an international element or history and you cannot know where any potential claim might be brought and what country’s laws might be applied.
The difference of approach, illustrated by the Renoir case, explains why so many claims arising out of Nazi looting or forced sales are brought in the New York court. Faced with the difficult competing claims, the laws and courts of European countries tend to favour the current owner, if he can show that he was innocent, and the courts also apply strict time limits for bringing proceedings.
The relevant laws are usually those of the place where the art was situated when it was bought, which would favour buying in Europe rather than the US, but the US court might not be swayed by that.
There are other ownership risks, for example where the seller is an agent who turns out to have been unauthorised, or some breach of customs regulations or export licencing leads to a foreign authority demanding return. Ancient or tribal objects, known as “cultural heritage”, that might for example have been unlawfully excavated or smuggled, are notoriously dangerous to buy and liable to be repatriated.
So what can buyers do to avoid getting embroiled in a costly dispute and possibly losing the art they have paid for? The best thing is to do as much research as possible. Ask the seller for all the available information he has, but remember that documents can be forged, so try to get independent verification from records and people involved with the art in the past.
Buying from reputable dealers and auction houses gives some comfort, but no guarantee. When buying privately, a well-drawn contract with warranties should help, and yet it is surprising how many purchasers of valuable art end up with nothing more than a receipt. Buying from a seller who might not be worth suing, or an off-shore company, will also limit recourse if the art is successfully claimed by a third party.
Searching the Art Loss Register is a must. It may not be conclusive (the fleamarket Renoir was not on it), but failing to search might suggest a lack of innocence.
Art title insurance is also available, but the more you need it, the harder it will be to get, and the more costly it will be.
Paul Howcroft, Partner, Fladgate LLP (email@example.com)