A Regulatory Framework for the Art Market?: Authenticity, Forgeries and the Role of Art Experts

Preface
Acknowledgements
Contents
About the Author
Chapter 1: Setting the Scene: Approach and Methodology
1.1 The Unregulated Nature of the Art Market
1.1.1 The Concepts of Trust and Confidentiality in Art Transactions
1.1.2 The Impact of Digitisation and Technology
1.1.3 Authentication and Attribution: The Unique Role of Art Experts
1.2 Current Discussions About Regulation
1.2.1 Recent Initiatives of Self-Regulatory Measures
1.3 The Research Task Emerging from Recent Developments
1.4 Methodology and Delimitation
1.5 Structure of the Analysis
References
Chapter 2: Peculiarities of the Art Market
2.1 Introduction: The Art Market´s Structure and Its Participants
2.1.1 Facts and Figures
2.1.2 A New Era of Valuation and Prices
2.1.3 A New Phenomenon: NFTs and the Tokenisation of Art
2.1.3.1 Art-Related NFTs as a New Asset Class
2.1.3.2 NFTs and the Art Market: Blockchain Technology as a Means of Authentication?
2.1.3.3 Tokenisation of Art: Blockchain as a Means of Democratising Art Investment?
2.1.3.4 Outlook: Many Open Questions
2.2 Major Players in the Art Market
2.2.1 Collectors
2.2.2 Art Advisors and Wealth Managers
2.2.3 Auction Houses: Guarantees and Third-Party Arrangements
2.2.4 Galleries
2.2.5 Museums
2.2.6 Practices of Dealers as Illustrated by Cases
2.2.6.1 Larry Gagosian v Jan Cowles: Lichtenstein´s Girl in Mirror
2.2.6.2 Larry Gagosian v Ronald Perelman: Koon´s Popeye
2.2.6.3 Larry Gagosian v Pelham Europe Ltd.: Pablo Picasso´s Bust of a Woman (Marie Thérèse)
2.2.6.4 Yves Bouvier v Dmitri Rybolovlev: Da Vinci´s Salvator Mundi and Modigliani´s Nu Couché au Coussin Bleu
2.2.6.5 Helge Achenbach v Babette Albrecht: Unauthorised Markups and Falsified Invoices
2.2.6.6 Helge Achenbach v Christian Boehringer: More Hidden Premiums
2.2.7 Interim Conclusion from Case Studies
2.3 Valuation
2.4 Value, Money and Price Mechanisms: The Lack of a General Pricing Methodology
2.4.1 The Threat of Price Manipulation
2.4.2 The Role of the Panama Papers
2.5 Art as a Financial Asset
2.5.1 Risks and Threats
2.5.2 The Role of Art Indices
2.5.3 Art-Secured Lending: When Art Becomes Collateral
References
Untitled
Chapter 3: Fraud, Forgery and Authentication
3.1 Introduction
3.2 Lessons from the Past: An Overview of Some of the Most Important Forgery Cases in Art History
3.2.1 Han van Meegeren
3.2.2 Tom Keating
3.2.3 Eric Hebborn
3.2.4 Elmyr de Hory
3.2.5 Geert Jan Jansen
3.2.6 Ely Sakhai
3.2.7 John Myatt
3.2.8 Interim Conclusion
3.3 No End in Sight: The Most Recent Forgery Cases
3.3.1 Wolfgang Beltracchi: The World´s Most Famous Art Forger
3.3.1.1 Details of the Case: The Sammlung Werner Jägers
3.3.1.2 Details of the Proceedings: The Forgeries
3.3.1.3 The Role of Werner Spies
3.3.1.4 Lempertz v Trasteco Ltd.: Rotes Bild Mit Pferden
3.3.2 The Closure of Knoedler Gallery
3.3.2.1 Details of the Cases
3.3.2.2 Pierre Lagrange: Jackson Pollock Untitled (1950)
3.3.2.3 Domenico and Eleanore de Sole: Mark Rothko Untitled (1956)
Expert Testimonies
Scientific Evidence and Due Diligence Obligations
The Court´s View: Memorandum Opinion and Order
3.3.3 Sotheby´s and the Old Masters Scandal
3.3.4 The Russian Avant-Garde as a Particular Victim of Fraud
3.3.5 Interim Conclusion: Red Flags and Consequences of the Scandals
3.4 Authentication
3.4.1 The Importance of Authenticity for the Art Market
3.4.2 The General Concepts of Authenticity and Forgery
3.4.3 Authenticity and Forgery: A Brief Overview of Historical Developments
3.4.4 Methods of Authentication
3.4.4.1 Scientific Analysis
Case Study: Fingerprint Analysis in the Context of Authentication
3.4.4.2 Practical Implications in Recent Forgery Cases
3.4.4.3 The Role of Provenance
3.5 The Central Role of Art Experts
3.5.1 Shortcomings of Expert Opinion
3.5.2 Erroneous Authentication and Attribution: Threats of Liability
3.5.2.1 Introduction
3.5.2.2 Germany and Switzerland
Contractual Liability
Non-Contractual Liability
3.5.2.3 The Netherlands
3.5.2.4 France
Contractual and Tort Liability
Jurisprudence Créative: Experts´ Liability in the Context of Auction Sales
3.5.2.5 The United Kingdom
The Scope of the Standard of Care
Applying the Standard of Care to Art Experts´ Responsibilities
3.5.2.6 United States
Liability for Negligence
Defamation and Disparagement
3.5.3 Safeguarding Against the Risk of Litigation: Possible Defences and Remedies
3.5.3.1 The First Amendment Defence
3.5.3.2 No-Sue Agreements
3.5.3.3 Statutory Reform: The 2014 Proposal to Amend the New York Arts and Cultural Affairs Law
3.5.3.4 Risk Mitigation by Means of Insurance
3.5.4 Interim Conclusion
3.6 Authentication Boards
3.6.1 Case Studies
3.6.1.1 The Keith Haring Studio, LLC
3.6.1.2 The Andy Warhol Art Authentication Board, Inc.
3.6.1.3 Simon-Whelan v. The Andy Warhol Foundation for the Visual Arts Inc.
Details of the Claim and the Motion to Dismiss
Plausibility
Relevant Market
Antitrust Injury
3.6.2 Interim Conclusion
3.6.3 Future Frameworks: Applying Antitrust Aspects of Certification and Standards Setting to Authentication
3.6.4 Mayor Gallery v. The Agnes Martin Catalogue Raisonné LLC: A Sigh of Relief for Authentication Committees?
3.7 The Catalogue Raisonné
3.7.1 Liability in the Context of Catalogues Raisonnés
3.8 Can Authenticity Be Established in Courtrooms?
3.9 Towards Increased Transparency and Regulation
References
Chapter 4: Remedies: Regulation and New Initiatives
4.1 Future Perspectives: Reform and Increased Regulation
4.2 The Status Quo of the Art Market: Inefficiency as Prevalent Business Culture
4.2.1 Prices and Valuation
4.2.2 Authentication and the Law
4.2.3 Why Does Inefficiency Persist?
4.3 Regulation: An Adequate Remedy?
4.3.1 Current Regulatory Schemes in the US Art Market
4.3.2 Regulation of the Australian Aboriginal Art Market
4.3.3 Self-Regulatory Measures Instead of External Regulation
4.4 Assessment of Recent Initiatives
4.4.1 The Basel Art Trade Guidelines
4.4.2 The Responsible Art Market Initiative: Art Transaction Due Diligence Toolkit
4.4.3 Authentication in Art: Recommendations for Valid Written Expert Opinion
4.5 The Changing Role of Science and Technology
4.5.1 New Techniques and Approaches
4.6 Other Remedies I: Art Title Insurance
4.7 Other Remedies II: Contractual Considerations
4.7.1 Regulating Dealers´ Position
4.8 Final Remedy: Alternative Dispute Settlement
4.8.1 Mediation
4.8.2 Arbitration
4.8.3 AiA/NAI Court of Arbitration for Art
4.8.4 Expert Determination
4.8.5 Interim Conclusion
References
Chapter 5: Conclusions and Recommendations
5.1 Conclusions
5.1.1 Main Findings from the Previous Chapters
5.2 Proposals for Reform
5.2.1 Experts and Authentication Boards
5.2.2 Umbrella Organisations
5.2.3 The International Foundation for Art Research (IFAR): A Prototype for an Expert Umbrella Organisation?
5.2.4 Guidelines and Standardised Procedures
5.2.5 Implications for Authoring Catalogues Raisonnés
5.3 Outlook: The Relativity of Authenticity and What Is More Likely Than Not
References