Inauthentically Yours: Why Auction Houses Must Protect Themselves

Recently I was discussing some issues in art law with a friend, who asked what sorts of liabilities an auction house like Sotheby’s or Christie’s might have were they to bring a work to market which had some questionable legality to it.  The short answer to the question is, auction houses these days tend to be very cautious about selling art whose ownership background – what in the trade is known as “provenance” – is somewhat sketchy.  However even the great houses get it wrong sometimes: spectacularly wrong.

The classic example of an auction house getting into trouble with a seller or buyer is exemplified in a suit recently settled by Lempertz auctioneers in Cologne.  The house had brought to market a work purportedly by the important Abstract Expressionist painter Heinrich Campendonk (1889-1957), pictured below, which was sold in 2006 for $3.7 million.  At the time this was a new world record for the highest price paid for this artist’s work.  When the art gallery which acted as broker for the buyer became suspicious, upon closer examination of the work, the research trail eventually led police to a pair of art forgers who had been producing fakes of works in the style of well-known modernist painters for a number of years.  The discovery caused many collectors, museums, and galleries to go back and re-examine a number of their recent acquisitions, and in the process more than 50 paintings from the hands of these forgers were detected – including one purchased and later re-sold by actor Steve Martin.

What was particularly egregious on the part of the auction house in this case was that the current recognized expert-of-experts, if you will, on the life and work of Campendonk was never consulted by the auction house to authenticate the painting.  Even more bizarrely, said expert in fact lived in Cologne, the very same city where the painting was exhibited and sold.  While in bills of sale the old motto of “caveat emptor” often explains why courts will bar recovery, in this case there was no question that the buyer relied on the seller to have done their homework in bringing the painting to the floor, and the auction house failed in providing that service.  As a result, not only was Lempertz stuck with their own legal bill, but that of the plaintiff as well, in addition to having to provide full restitution of the purchase price, as part of the settlement agreement.

This case was a particularly egregious example of a failure to do the job which the auctioneer is supposed to do when a work comes in for valuation and sale.  However as interesting as such examples are, these slip-ups, while inevitable, are situations which most auctioneers and dealers do try to avoid.  Last month for example, Christie’s New York branch withdrew ten works by Brazilian modernist painters from its sale of modern and contemporary Latin American art, after questions were raised about their provenance and authenticity; the house indicated that further research and investigation were needed before the paintings could be offered for sale.

Then a few days later, Phillips auctioneers in New York withdraw a work by a Brazilian modernist which was to be sold in its own impending sale of Latin American art, after similar questions arose regarding its authenticity.  And Sotheby’s New York had to withdraw a work claimed to be by French Modernist Maurice Utrillo (1883-1955), when questions were raised about its authenticity through the “droit moral”, or “moral rights” to authenticate the work of a deceased painter whose work still falls under legal protection.  In these cases, the houses did their due diligence, in order to satisfy themselves and their potential buyers that fakes were not being offered as the genuine article.

Yet no matter how good an eye an auction house expert may have, it does not take very much for an inauthentic piece to make it into an auction catalogue and fall under the hammer for a high price.  Moreover, because of the ridiculously high sales levels being paid for modern and contemporary art at present, and the relative ease of forgery of such works, this is in fact a growth industry for art forgers, money launderers, and the black market.  Exposure to such litigation can be avoided, one suspects, largely by a change in attitude.

Auction houses dealing with works of art of such high monetary value need to make a point of handling each work that comes in through their doors with utter suspicion.  In other words, rather than waxing enthusiastic and assuring the consignor of how wonderful a piece is, the position of the valuer ought to be leaning more in the direction of refusing to sell a painting of questionable provenance, rather than trying to overlook the flaws in its pedigree.  The costs for being sloppy in one’s research and marketing can be very grave, indeed, not only to the bottom line, but also to one’s professional reputation, thereby reducing the possibility of future sales.

CampendonkFake

Fake Heinrich Campendonk painting sold by Lempertz in 2006 for $3.7 million

Advertisements

11 thoughts on “Inauthentically Yours: Why Auction Houses Must Protect Themselves

  1. In my own nonprofessional opinion, this article should knock the socks off of most all fine art buyers from all auction houses throughout the world. I believe it is now known by Art police in France, art connoisseurs & experts all over this MFA world that fakes are becoming prevalent involving past & present sale of fine art. Art now being offered at this present time are coming under more scrutiny, while the art works are being considered to be about 50% being fakes. I’m sure that these figures could fluctuate up or down depending mostly on provenances and what kind of scientific testing has been done to these works of art in the past and now in the present the way I see it.

    Like

    • Yes, I would, if they’re good at it. They have to be creative to try to convince people it’s real. But it’s like a burglar turning his skills of understanding things like physics and engineering to bad purposes.

      Like

      • Yes, I believe you’re right William, for if Picasso copied an artist’s work that he liked he wouldn’t claim it as his own. He knew what kind of a art world he was living in and what it was becoming. If Picasso copied a artist work, let’s say because he liked it, he would just sign his copied work by a different artist name. Let’s assume if he copied a Miro, he’d likely sign it Palmaro or Pal-Miro something similar or to that effect. Then I’m assuming he’d either sell it cheaply or just give it away.

        Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s