A Regulatory Framework For The Art Market?: Anna Bolz

Studies in Art, Heritage, Law and the Market 7
Anna Bolz
A Regulatory
Framework
for the Art
Market?
Authenticity, Forgeries and the Role
of Art Experts
Studies in Art, Heritage, Law and the Market
Volume 7
Series Editors
Rachel Pownall, School of Business and Economics, Maastricht University,
Maastricht, The Netherlands
Ana Quintela Ribeiro Neves Ramalho, Faculty of Law, Maastricht University,
Christoph Rausch, Faculty of Science and Engineering, Maastricht University,
Hildegard Schneider, Faculty of Law, Maastricht University, Maastricht, The
Netherlands
Vivian van Saaze, Faculty of Arts and Social Sciences, Maastricht University,
Renée van de Vall, Faculty of Arts and Social Sciences, Maastricht University,
Lars van Vliet, Faculty of Law, Maastricht University, Maastricht, The Netherlands
Donna Yates , Faculty of Law, Maastricht University, Maastricht, The
Netherlands
Advisory Editors
Bert Demarsin, KU Leuven, Leuven, Belgium
Hester C. Dibbits, Department of History, Erasmus University Rotterdam,
Rotterdam, The Netherlands
Patty Gerstenblith, DePaul University, Chicago, IL, USA
Susan Legêne, VU Amsterdam, Amsterdam, The Netherlands
Peggy Levitt, Department of Sociology, Wellesley College, Wellesley, MA, USA
Simon Mackenzie, Faculty of Humanities and Social Sciences, Victoria University
of Wellington, Wellington, New Zealand
Olav J. M. Velthuis, Faculty of Social & Behavioural Sciences, University of
Amsterdam, Amsterdam, The Netherlands
Andrea Wallace, Law School, University of Exeter, Exeter, UK
Matthias Weller, Department of Law, University of Bonn, Bonn, Germany
The book series Studies in Art, Heritage, Law and the Market provides an interna-
tional and interdisciplinary forum for volumes that
• investigate legal, economic, and policy developments related to arts, heritage, and
intellectual property;
• critically assess how and for whom art and heritage values come about;
• promote novel forms of user engagement, participatory presentations, and digi-
talization of arts and heritage;
• examine the processes that transform cultural objects and practices into arts and
heritage; and
• highlight new approaches in preservation and conservation science.
The series addresses a need for research and practice in the fields of art, culture,
conservation, and heritage including a focus on legal and economic aspects. It deals
with complex issues such as questions of authenticity and provenance; forgery and
falsification; the illicit trade, restitution, and return of cultural objects; the changing
roles of museums; the roles of experts and expertise; and the ethics of the art market.
Anna Bolz
A Regulatory Framework
for the Art Market?
Authenticity, Forgeries and the Role
of Art Experts
Anna Bolz
Faculty of Law
Maastricht University
ISSN 2524-7425 ISSN 2524-7433 (electronic)

Studies in Art, Heritage, Law and the Market
ISBN 978-3-031-18742-1 ISBN 978-3-031-18743-8 (eBook)
https://doi.org/10.1007/978-3-031-18743-8
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Preface
This book addresses several fascinating questions relating to connoisseurship,

authentication, and the legal implications that arise when an artwork’s authenticity
is challenged. Providing insights into both the practical and the philosophical aspects
of authentication, the aim is to connect these issues to the legal complications which
can inhibit the expression of expert opinion and further, to enhance the understand-
ing of how the challenges should be weighed in practice, in courts of law and in our
minds.
The notion of authenticity has always commanded the attention of art market
participants and the general art-minded public alike, and art forgery is often consid-
ered the world’s most glamourous crime, characterised by true-crime stories. In a
market-driven world, where a No rather than a Yes on authenticity can mean a
difference of millions of dollars, the focus is on the connoisseurship of art experts to
provide definitive judgements on authenticity. Yet, standardised processes do not
exist. This will be discussed amidst the fact that the art market has been subject to
fundamental structural changes. Alongside centuries-old ways of doing business and
a continued reliance on trust and reputation, the art market witnesses the emergence
of new consumers, participants, and business models. It will be advocated that by
introducing common protocols among market participants in matters of authentica-
tion, quality of opinion-making can be safeguarded, and legal disputes minimised—
an approach that is supported by current developments and initiatives.
This book includes findings by economists, sociologists, art historians, and
lawyers. However, it is not only of interest for academics, but for everyone interested
in questions of authenticity, forgery, and connoisseurship. In the same spirit, it is a
primary aim of this book to advocate best practices in the art market and to stress the
importance of cooperation among all disciplines having a stake in its operation.
Maastricht, The Netherlands Anna Bolz
v
Acknowledgements
This book is the result of my Ph.D. Research at Maastricht University. I would like to
express my enormous gratitude to mentors, colleagues, friends, and my family who
supported me during this time.
First and foremost, I am very much indebted to my Ph.D. supervisors Hildegard
Schneider and René de Groot. I am very grateful for their continuous enthusiasm for
the subject matter of my research, their valuable guidance, and their hospitality
throughout this project. Hildegard, for her continued support not only during my Ph.
D. research, but already during the Bachelor MaRBLe project on Art & Law and
René, for his time and patience with thoroughly proofreading my drafts, while
sharing his passion for flowers and office supplies. I am similarly indebted to the
members of the assessment committee: Marta Partegás, Anne Mie Draye, Bert
Demarsin, Joop de Jong, and Lars van Vliet.
I also wish to thank my friends and family, and especially my parents for their
love and support. It is hard to express the gratitude I feel for all the possibilities and
chances I was given and enabled to pursue. It would have been much more difficult,
if not impossible, to produce this work without their encouragement.
vii
Contents
1 Setting the Scene: Approach and Methodology . . . . . . . . . . . . . . . . . 1

1.1 The Unregulated Nature of the Art Market . . . . . . . . . . . . . . . . . . 1
1.1.1 The Concepts of Trust and Confidentiality in Art
Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.2 The Impact of Digitisation and Technology . . . . . . . . . . . . 5
1.1.3 Authentication and Attribution: The Unique Role of Art
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.2 Current Discussions About Regulation . . . . . . . . . . . . . . . . . . . . . 12
1.2.1 Recent Initiatives of Self-Regulatory Measures . . . . . . . . . 14
1.3 The Research Task Emerging from Recent Developments . . . . . . . 15
1.4 Methodology and Delimitation . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.5 Structure of the Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2 Peculiarities of the Art Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.1 Introduction: The Art Market’s Structure and Its Participants . . . . . 23
2.1.1 Facts and Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.1.2 A New Era of Valuation and Prices . . . . . . . . . . . . . . . . . . 27
2.1.3 A New Phenomenon: NFTs and the Tokenisation of Art . . 31
2.2 Major Players in the Art Market . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.2.1 Collectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.2.2 Art Advisors and Wealth Managers . . . . . . . . . . . . . . . . . . 47
2.2.3 Auction Houses: Guarantees and Third-Party
Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.2.4 Galleries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2.2.5 Museums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
2.2.6 Practices of Dealers as Illustrated by Cases . . . . . . . . . . . . 60
2.2.7 Interim Conclusion from Case Studies . . . . . . . . . . . . . . . . 76
2.3 Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
2.4 Value, Money and Price Mechanisms: The Lack of a General
Pricing Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ix
x Contents
2.4.1 The Threat of Price Manipulation . . . . . . . . . . . . . . . . . . . 84

2.4.2 The Role of the Panama Papers . . . . . . . . . . . . . . . . . . . . 86
2.5 Art as a Financial Asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
2.5.1 Risks and Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
2.5.2 The Role of Art Indices . . . . . . . . . . . . . . . . . . . . . . . . . . 91
2.5.3 Art-Secured Lending: When Art Becomes Collateral . . . . . 94
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
3 Fraud, Forgery and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . 107
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
3.2 Lessons from the Past: An Overview of Some of the Most
Important Forgery Cases in Art History . . . . . . . . . . . . . . . . . . . . 110
3.2.1 Han van Meegeren . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
3.2.2 Tom Keating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
3.2.3 Eric Hebborn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
3.2.4 Elmyr de Hory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
3.2.5 Geert Jan Jansen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
3.2.6 Ely Sakhai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
3.2.7 John Myatt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
3.2.8 Interim Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
3.3 No End in Sight: The Most Recent Forgery Cases . . . . . . . . . . . . . 123
3.3.1 Wolfgang Beltracchi: The World’s Most Famous Art
Forger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
3.3.2 The Closure of Knoedler Gallery . . . . . . . . . . . . . . . . . . . 136
3.3.3 Sotheby’s and the Old Masters Scandal . . . . . . . . . . . . . . . 149
3.3.4 The Russian Avant-Garde as a Particular Victim
of Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
3.3.5 Interim Conclusion: Red Flags and Consequences
of the Scandals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
3.4 Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
3.4.1 The Importance of Authenticity for the Art Market . . . . . . 156
3.4.2 The General Concepts of Authenticity and Forgery . . . . . . 157
3.4.3 Authenticity and Forgery: A Brief Overview
of Historical Developments . . . . . . . . . . . . . . . . . . . . . . . 162
3.4.4 Methods of Authentication . . . . . . . . . . . . . . . . . . . . . . . . 164
3.5 The Central Role of Art Experts . . . . . . . . . . . . . . . . . . . . . . . . . 178
3.5.1 Shortcomings of Expert Opinion . . . . . . . . . . . . . . . . . . . . 182
3.5.2 Erroneous Authentication and Attribution: Threats of
Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
3.5.3 Safeguarding Against the Risk of Litigation: Possible
Defences and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 208
3.6 Authentication Boards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
3.6.1 Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
Contents xi
3.6.3 Future Frameworks: Applying Antitrust Aspects of

Certification and Standards Setting to Authentication . . . . . 230
3.6.4 Mayor Gallery v. The Agnes Martin Catalogue Raisonné
LLC: A Sigh of Relief for Authentication Committees? . . . 231
3.7 The Catalogue Raisonné . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
3.7.1 Liability in the Context of Catalogues Raisonnés . . . . . . . . 235
3.8 Can Authenticity Be Established in Courtrooms? . . . . . . . . . . . . . 236
3.9 Towards Increased Transparency and Regulation . . . . . . . . . . . . . 243
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243
4 Remedies: Regulation and New Initiatives . . . . . . . . . . . . . . . . . . . . . 255
4.1 Future Perspectives: Reform and Increased Regulation . . . . . . . . . 255
4.2 The Status Quo of the Art Market: Inefficiency as Prevalent
Business Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257
4.2.1 Prices and Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
4.2.2 Authentication and the Law . . . . . . . . . . . . . . . . . . . . . . . 261
4.2.3 Why Does Inefficiency Persist? . . . . . . . . . . . . . . . . . . . . 265
4.3 Regulation: An Adequate Remedy? . . . . . . . . . . . . . . . . . . . . . . . 266
4.3.1 Current Regulatory Schemes in the US Art Market . . . . . . 267
4.3.2 Regulation of the Australian Aboriginal Art Market . . . . . . 269
4.3.3 Self-Regulatory Measures Instead of External
Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270
4.4 Assessment of Recent Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . 271
4.4.1 The Basel Art Trade Guidelines . . . . . . . . . . . . . . . . . . . . 272
4.4.2 The Responsible Art Market Initiative: Art Transaction
Due Diligence Toolkit . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
4.4.3 Authentication in Art: Recommendations for Valid
Written Expert Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . 276
4.5 The Changing Role of Science and Technology . . . . . . . . . . . . . . 279
4.5.1 New Techniques and Approaches . . . . . . . . . . . . . . . . . . . 280
4.6 Other Remedies I: Art Title Insurance . . . . . . . . . . . . . . . . . . . . . 283
4.7 Other Remedies II: Contractual Considerations . . . . . . . . . . . . . . . 285
4.7.1 Regulating Dealers’ Position . . . . . . . . . . . . . . . . . . . . . . 287
4.8 Final Remedy: Alternative Dispute Settlement . . . . . . . . . . . . . . . 287
4.8.1 Mediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290
4.8.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290
4.8.3 AiA/NAI Court of Arbitration for Art . . . . . . . . . . . . . . . . 291
4.8.4 Expert Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294
5 Conclusions and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . 299
5.1 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
5.1.1 Main Findings from the Previous Chapters . . . . . . . . . . . . 299
5.2 Proposals for Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303
5.2.1 Experts and Authentication Boards . . . . . . . . . . . . . . . . . . 304
5.2.2 Umbrella Organisations . . . . . . . . . . . . . . . . . . . . . . . . . . 304
xii Contents
5.2.3 The International Foundation for Art Research (IFAR):

A Prototype for an Expert Umbrella Organisation? . . . . . . . 306
5.2.4 Guidelines and Standardised Procedures . . . . . . . . . . . . . . 307
5.2.5 Implications for Authoring Catalogues Raisonnés . . . . . . . 310
5.3 Outlook: The Relativity of Authenticity and What Is More
Likely Than Not . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314
About the Author
Anna Bolz is a member of the Ius Commune Research School and a former
affiliated researcher to the Maastricht Centre for Arts and Culture, Conservation
and Heritage.
Her research focuses on the art market, authentication processes, and the legal
implications of forgeries.
xiii
Chapter 1
Setting the Scene: Approach
and Methodology
1.1 The Unregulated Nature of the Art Market
At first glance, it may appear that the art market, with an estimated annual turnover
of about $65 billion in 2021, is comparable to other markets and sectors of the global
economy.1 The majority of its typical commercial activity such as buying and selling
is regulated by national commercial, civil and criminal legislation as well as by
international laws and regulations. Yet, the market is also frequently characterised as
one of the least regulated marketplaces.2 But to what extent does this general
statement hold true? A report compiled by the lawyer Pierre Valentin, at the request
of the British Art Market Federation (BAMF), listed 167 laws and regulations
applying to the British art market as of February 2015.3 These laws and regulations
concern various completely different matters: tax and VAT issues, handling of
looted art, protection of cultural property and artists’ resale rights, to name a few.
In addition, there are several major international treaties with direct effect on the art
trade, for instance the UNESCO Convention on the Means of Prohibiting and
Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property
(1970).4 As a consequence, art market participants are nowadays answerable to
various national, international, and European laws, either directly directed at the
art trade or indirectly applicable to it. While Valentin’s research was limited to the
1
In fact, the global art market recovered strongly in 2021: aggregate sales were up by 29% from
2020 and surpassed pre-pandemic levels of 2019. See further Clare McAndrew (2022), p. 14.
2
Adam (2017), pp. 23 and 89ff.
3
Valentin, P (2015) The myth of the unregulated art market, presented at The Art Business
Conference on September 3, 2015. See also Little (2015).
4
Ibid.
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 1

A. Bolz, A Regulatory Framework for the Art Market?, Studies in Art, Heritage, Law
and the Market 7, https://doi.org/10.1007/978-3-031-18743-8_1
2 1 Setting the Scene: Approach and Methodology
British market, it can be assumed that a similar number of laws and regulations apply
to other European art markets as well as to that of the United States.5
Nevertheless, art critics and authors still claim that “apart from drugs, art is the
biggest unregulated market in the world”.6 Robert Barrington, executive director of
Transparency International UK, the leading anti-corruption organisation, is of the
opinion that the art market’s regulation is both lax and poorly supervised because
“the regime is just too dispersed to be effective”.7 These statements point to the
allegation that the art market, especially in the context of regulation, is decisively
different from other markets. First of all, the framework of regulation is simply less
than in other markets. Dealers have unique means to manipulate transactions in
which they have a vested interest. They can represent both the seller and the buyer in
the same transaction and are also able to manipulate the prices of artists they
represent, for instance by bidding up their works at auction. The same holds true
for art experts: it is not uncommon for an expert to authenticate a work, arrange the
subsequent sale and to ultimately receive a share of the sale price. The arising
conflict of interest is obvious and it is therefore argued that such practices would
be banned or at least subjected to severe regulation in other markets.8 Another
concern is that the access point to the fine art market is very low: anyone can become
a dealer, an advisor or an expert without any certifying requirements.9
A second main area of concern is the fact that most transactions are still based on
personal relationships and that ensuing deals are frequently unsupported by contrac-
tual stipulations. As the second chapter’s case studies illustrate, it is not unusual that
these practices often result in legal disputes.10 It is argued that more regulation and
increased transparency, and inevitably less privacy and confidentiality, will take
away the market’s foundation. Yet, the recent forgery and fraud scandals involving
some of the most prominent players have shaken the industry to such a degree that a
discussion about new initiatives, including regulation, is at the forefront of consid-
erations. In January 2015, at the World Economic Forum in Davos, high-profile
economist Nouriel Roubini denounced the art market as a tool for tax evasion,
money laundering and essentially, as a marketplace full of “shady stuff”.11
According to Roubini, the art market’s characteristic weaknesses would not be
tolerated in other markets, concluding that it must either regulate itself or be
subjected to external forms of regulation. Among others, these weaknesses are
5
For the purpose of this analysis, the focus is on the art market's centres in Europe and the United
States.
6
Comment by art critic Robert Hughes in his documentary Mona Lisa's Curse. See also Hill
(December 11, 2012).
7
Ibid.
8
Ibid.
9
Hausmann (2014), p. 29.
10
von Delden in Hausmann (ed) (2014), p. 215.
11
“[. . .] It can be used for tax avoidance and evasion. You can buy something for half a million, not
show a passport, and ship it. Plenty of people are using it for laundering.” See Gapper and Aspden
(2015) and Little (2015).
1.1 The Unregulated Nature of the Art Market 3
said to include insider trading—which is considered illegal in other markets, but

routine in the art market—as well as price manipulation.12
Furthermore, the art market is considered prone to “fads, passions, manias, booms
and busts” as the economic value of art is determined in an opaque manner, leaving
potential purchasers no other choice than to rely on insiders’ assessment of a piece.13
Given Roubini’s reputation as one of the world’s most esteemed economists, his
comments at Davos were well-publicised and attracted widespread attention. How-
ever, the true scope of the shortcomings identified as well as the feasibility of
remedies need further scrutiny. And indeed, many commentators agree that the
issues are in fact real, but “their scope, uniqueness to the art market, and the
possibilities of regulation as a solution” are questionable.14 In particular, it is argued
that greater regulatory oversight, for instance an administrative agency that would
oversee transfers of art, is not a feasible endeavour.15
Yet, the discussion about increased regulation is not merely a recent phenome-
non. Already in 1988, Gerstenblith discussed the topic of regulation and noted that
“the owner of an art work [. . .] is placed in a market industry that operates under a set
of highly technical and somewhat arcane rules, and which is largely untouched by
governmental interference or regulation”.16 This topic was taken up again in 2012
when the Basel Institute on Governance published the Basel Art Trade Guidelines, a
working paper by key market participants aimed at collective action and the estab-
lishment of art trade “industry standards” that would ensure fair and effective
competition.17 These guidelines were initiated on the assumption that “the current
level of regulation and existing compliance efforts by individual operators has
proven to be insufficient”, allowing some competitors to engage in “unethical or
illegal behavior”.18 In line with this and going hand in hand with the market’s focus
on discretion and confidentiality, a lot of transactions, especially in the private
sector, are based on trust and reputation. Since trust is a rather rare concept to
form the basis of an economic sector, it is essential to examine its prevalent role and
why it might impede any attempt at bringing more regulation and transparency to the
art trade.
12
For instance, the Market Abuse Regulation ((EU) No 596/2014 of the European Parliament and of
the Council of 16 April 2014 on market abuse, MAR) imposes severe sanctions of up to €15
million, or 15 percent of a company’s annual turnover.
13
Ibid.
14
Heddaya (2015).
15
Ibid.
16
Gerstenblith (1988), p. 503. However, this study is limited to the liability of dealers and auction
houses towards their clients.
17
Christ and von Selle (2012), p. 3.
18
Ibid. p. 2.
1.1.1 The Concepts of Trust and Confidentiality in Art

Transactions
In short, trust is “the belief on which cooperation is predicated” and “the importance
of trust pervades the most diverse situations where cooperation is at one and the
same time a vital and fragile commodity”.19 At the same time, this pervasiveness
seems to have generated “less analysis than paralysis” as the concept of trust is often
acknowledged but seldom examined.20 In fact, many art market participants rely to a
great extent on trust-based relationships where handshake deals are the norm and
major purchases are made with mutual understanding rather than with written
contracts.21 As a consequence, trust is gained with reputations and relationships
and serves to overcome the uncertainty that pertains to transactions. In addition,
international institutions and internationally acclaimed art experts have built their
careers and brands around their reputation and the personal relationships fostered
with long-standing clients.22 Oddly, but in line with the market’s nature, substantial
numbers of art transactions employ fewer contract documents than other similarly
priced goods.23 Trust is one of the concepts that has been at the heart of the art
market since its very beginning and is now contested in terms of its fallibility and
shortcomings. Although trust can have many benefits, such as reducing transaction
costs and encouraging exchange, it can also cause serious problems, as exemplified
by the case of Knoedler Gallery and the lawsuits involving prominent personalities
such as art dealer Larry Gagosian,24 businessman and dealer Yves Bouvier,25 and art
advisor Helge Achenbach26—illustrating that no one should be above suspicion in a
system based on trust.
Obviously coinciding with this high significance of trust is the art market’s
historical lack of transparency and its reputation as the “last unregulated market in
the world”.27 Moreover, opacity and the lack of verifiable information, including
19
For an extensive discussion of the general topic of trust, see Gambetta (1990), p. ix.
20
Ibid. p. x.
21
Pownall (2016), p. 28.
22
Dempster (2013). A recent example which perfectly illustrates this trust-based system is the sale
of Paul Gaugin’s Nafea Faa Ipoipo (When Will You Marry?): In 2015, the painting was sold for
supposedly $300 million. Former auctioneer Simon de Pury brought a lawsuit, claiming that he
brokered the sale and was owed a $10 million commission on the sale. The parties had no contract
regarding the commission and De Pury’s lawyer stated that “it would be unusual to find some types
of contract made orally, but that is not true of the art market, which continues to operate in a
gentlemanly manner, based on mutual trust”. See Haigney (2017).
23
Day (2014), p. 469.
24
See in general Halperin (2012) and Cohen (2013).
25
The dispute emerged between Bouvier and Russian billionaire Dmitry Rybolovlev. For
Rybolovlev’s bibliography see Ramsay (2017). See specifically chapter 14 for the discussion of
the conflict with Bouvier.
26
Neuendorf (2015) and Keuchel (2015).
27
Day (2014), p. 469.
research into provenance, authenticity and value, make risk assessment a very
difficult task. The most visible example in this respect is perhaps the practice of
not openly quoting artworks’ prices at art fairs or at galleries’ premises.28 While
authors stress that this asymmetry of information, which naturally suits the person
who knows more, would normally lead to a call for regulation in order to ensure
better market transparency, regulation should in this context not be confused with
transparency. Functional market transparency is based on accepted norms of behav-
iour that are willingly subscribed to by all parties concerned and not imposed from
above. With the art market’s aforementioned focus on trust, discretion and confi-
dentiality, it is likely that market participants would consider initiatives to increase
the flow of information and increase market transparency as hindrances to their
businesses.29 For instance, the fact that a painting sells at public auction for more
than $100 million and that the identities of the seller, the bidders, the potential
guarantor and the final buyer remain confidential is certainly possible in the art
market.30
1.1.2 The Impact of Digitisation and Technology
The paragraph above raises the question whether reliance on trust and efforts to
create greater transparency can be reconciled. It has been suggested that communi-
cations technology might represent a possible solution.31 More information than
ever is made available from a growing number of sources, including price databases,
art indices, analyses from art research companies, and online auction portals. These
enable a broader range of global clients to access a larger amount of sales informa-
tion. Hence, it is assumed that digitisation and its online manifestations have caused
a shift in the market form a supply-side oriented market to one that is more consumer
driven.32 With this increase in information supply, it is hoped that the accompanying
level of scrutiny might rise as well and that this development facilitates assessment
so that collectors and other participants make better-informed decisions about their
acquisitions. In the context of price transparency, it is important to distinguish
between the public auction market and the private dealer market. It is well
documented that there has been an exponential increase in both the amount of sale
records accessible online and the volume of databases analysing this data. However,
28
Ibid.
29
Ibid. Day argues that “the pervasive secrecy of the art trade is another reason why buyers and
collectors need to take independent and informed precautions.” Probably the most striking thing to a
person who comes upon the art world is the assumption that transactions should normally be, and
are certainly entitled to be, secret.”
See Phelan (2000), p. 662.
30
Reyburn (2015).
31
Arora and Vermeylen (2013a), p. 328 and Towse and Handke (2013).
32
Ibid.
prices in the dealer segment can be kept private and there is no legal obligation for a
seller to reveal his financial interest in a transaction.
Consequently, it is even difficult to determine the actual size of the market.
According to Clare McAndrew, author of the TEFAF Art Market Report until
2016, there is a trend at auction houses to sell privately and while some of the art
world’s biggest art dealing companies and auction houses are privately owned and
hence do not have to disclose sales figures, she still has to rely on their cooperation in
order to compile a meaningful report. For the 2016 report, for instance, only 800 out
of 6300 galleries responded, making it difficult to draw meaningful conclusions from
the survey and casting doubt on its informative value.33 In addition, it will be
demonstrated that more data cannot automatically be equated with more knowledge,
especially where price indices are concerned.34 While such indices can be a valuable
indication of certain trends in the art market, their methodology is often opaque and
unsystematic, leaving out many unreported transactions and being biased in favour
of high-value artworks. Hence, this wealth of data means that consumers are in need
of trusted sources and reliable intermediaries to guide them—otherwise, the abun-
dance of data can easily become overwhelming and confusing. While it is acknowl-
edged that the Internet has been instrumental in the globalisation and
commercialisation of the art market, it is argued that the time-old structures of the
market have not been fundamentally affected.35 The idea that a digital revolution
would render traditional art institutions and experts obsolete has proven untenable
and instead, the art market has “predominantly shunned the virtual realm rather than
embracing it”.36
Historically, the art market has lagged behind other industries in terms of
e-commerce: between 2013 and 2019, sales in the online art market grew steadily
from over $3 billion to $5.9 billion, just about 10% of overall sales in the market.37
The COVID-19 pandemic strongly accelerated the previously slow process of
digitisation in the art trade. With restricted mobility for months, physical gallery
spaces closed and art fairs cancelled, the art market was forced to embrace alternative
ways to interact and to maintain liquidity.38 Indeed, according to the Art Basel
Report, nearly all galleries (93%) had closed their premises for at least 10 weeks in
the first half of 2020, a situation that would continue after the summer break.39 In
addition, the absence of physical art fairs in 2020 (which had accounted for 46% of
gallery sales in 2019) meant that sales were significantly reduced through this
33
Spero and Pickford (2016).
34
This topic will be discussed in the second chapter in part 3.2.
35
Velthuis in Lind and Velthuis (eds) (2012), p. 48.
36
Bishop (2012).
37
McAndrew (2021b), p. 36.
38
Ibid. Habelsberger and Bhansing (2021) conducted research into the impact of the COVID-19
pandemic on digital business transformation in galleries in Vienna and Salzburg.
39
McAndrew (2021a), p. 22 and Boll (2020), p. 77.
channel.40 Nevertheless, although the reduced number of sales resulted in substantial

financial loss, it was offset by reduced costs associated with international travel and
exhibitions, which was, after payroll and rent, the single largest component of total
costs for galleries in 2019.41 For auction houses, the COVID-19 pandemic meant
that no physical auction could take place at their premises and that they were forced
to conduct their sales online.42 And despite contraction of overall sales, aggregate
online sales reached a record high of $12.4 billion in 2020, doubling in value from
2019.43 As a result, the share of online sales grew from 9% of total sales in 2019 to
25% of sales in 2020, the first time that the share of e-commerce in the art market has
exceeded that of general retail.44 But even though the number of online only auctions
grew globally by 240% between January and August 2020, the overall auction
turnover decreased by 97% compared to 2019.45 It can nevertheless established
that by hosting online auctions and creating virtual showrooms to display and sell
artworks, digital technology facilitated visibility of market participants globally.46 In
addition, it is concluded that art market participants are becoming increasingly open
towards selling art online, also in the mid to high price segment and that online sales
are generally viewed much more positively than expected.47 While technical inno-
vation is certainly important for the overall turnover in the art market, it also brings
up interesting questions about the role of art experts in the evaluation of art in
contemporary times and whether technology is capable of dismantling age-old
hierarchies and established “priesthoods” in the art world.48
This refers particularly to the ‘digital expert: Artificial Intelligence (AI) and
machine learning mechanisms that evaluate artwork’s characteristics and could
one day substitute prevalent methods of authentication and valuation as well as
introduce market forecasting.49 One aim of using these mechanisms is to gather
essential information about artworks by uploading an image: algorithms use pattern
recognition to cross-reference new images against a database of previously identified
artworks and could potentially identify the artist, title, date of creation and perhaps
even the reported sales price as well as flag lost, looted or forged artworks.50 Another
area of application could be authentication: machine-learning algorithms that study
as many of an artist’s artworks as possible to establish a highly specific database
which can serve as the artist’s aesthetic fingerprint, for instance the amount of
40
McAndrew (2021b), p. 49 and Boll (2020), p. 82.
41
Ibid. p. 53.
42
Boll (2020), p. 83.
43
McAndrew (2021a), p. 21.
44
McAndrew (2021b), p. 36 and Deloitte | ArtTactic (2021a), p. 19.
45
Boll (2020), p. 87.
46
Habelsberger and Bhansing (2021), pp. 2ff.
47
Ibid. p. 15 and Boll (2020), p. 85.
48
Arora and Vermeylen (2013b), p. 197.
49
Boll (2020), p. 181.
50
Schneider (March 31, 2020a).
pressure that was exerted on the paper or the direction the pen actually moved to
create every mark. Against this database, questionable artworks could be com-
pared.51 Lastly, A.I. could provide a tool for what is considered the Holy Grail for
the art market: valuation forecasting. By building analytical profiles of artists and
simulating interactions between these profiles and a statistical model of larger market
conditions, these models could provide data-backed predictions for the future value
of artworks.52 However, there are several factors that will severely complicate the
introduction of any A.I. mechanism: first of all, any A.I. application needs a lot of
information and data—a prerequisite that is very problematic to achieve in the small,
fragmented and opaque art market.53 While only few market participants achieve the
highest turnovers and do not necessarily reveal any information, prices are also
driven by uniqueness—even artworks created within the same body of work by a
single artist are hardly equal, impeding the precision of mechanisms that base
predictions on the comparison of artworks.54 Second, any art-market algorithm
which is fed by past data is prejudiced with an information bias, or in other words
with “decades spent overvaluing Western, white male painters”, a phenomenon that
is known as “garbage in, garbage out”.55 Third, even the best predictive models
cannot account for a global economic crisis, the outbreak of a war or a promising
artist’s drug problem that leaves him unable to produce further output.
In line with this, no matter what data will tell, an artwork is worth whatever a
buyer is convinced to pay for it. And this, as will be discussed in Chap. 2, is
influenced by plenty factors, among which is even the weather. Whatever role
A.I. will assume in the future and if it can indeed replace traditional evaluation
and authentication methods is a question that only time can answer. At the time
being, the impediments identified above seem to hamper any substantial advance-
ment. With the aim of illustrating which challenges A.I. and machine learning
algorithms have to overcome, the next paragraph will outline the current role of
experts in matters of authentication and attribution.
1.1.3 Authentication and Attribution: The Unique Role of Art

Experts
For centuries, the art world’s “innate elitism and hierarchical character” is said to
have shaped its identity and with a growing commodification within the market, art
experts began to be positioned at the centre of art evaluation.56 While artists,
51
Ibid.
52
Ibid.
53
Schneider (March 31, 2020b) and Boll (2020), p. 183.
54
Ibid.
55
Ibid.
56
Arora and Vermeylen (2013b), p. 197 and Ragai (2018), p. 95.
museums and galleries, auction houses, art dealers and critics engage with each other
to define the quality of an artwork, experts are particularly relevant in the economic
valorisation process. And even though the valuation of art in itself is generally
already a nebulous process, it is especially the determination of authorship and
authenticity that is conventionally left to the art experts. As a result, their position
in questions of authentication and attribution is defined as an “authority of attribu-
tion”.57 This means that their expertise is privileged and central to the process of
evaluation. Thus, experts function as gatekeepers who determine the artistic, social
and financial value of a work of art.58 Historically, the valuation and assessment of
artworks have always been dependent on professional judgement. Since there are
hardly any objective criteria on which the valuation and valorisation process is
based, it is common practice that collectors and other private parties rely on external
valuations carried out by dealers acting as experts, auction house specialists, artists’
estates or independent experts. As a result, these elites have monopolised the
discourse on the value of art.59
Yet, different experts might arrive at diverging conclusions and ultimately, the
standing of the dissenting valuer influences which assessment prevails. In the
context of authentication and attribution, experts’ knowledge is particularly impor-
tant for the secondary art market60 as it is a prerequisite for stamping out forgeries
and providing a measure of certainty for the resale of artworks.61 In the primary
market,62 experts’ role in authentication and attribution is less prominent because
artworks by living artists are usually not subject to questions of authorship and
authenticity. And if they are, the artist or representing gallery should be able to
answer these conclusively. However, it is irritating that a fact which is self-evident in
other economic sectors does not seem to apply to the art trade: the independence of
appraisers.63 As already mentioned above, it is not uncommon that the person who
authenticates, attributes or appraises an artwork has a financial interest in its sale,
too.64 What are the prerequisites and mandated qualifications for a person to become
recognised as an expert? Generally, an expert has profound knowledge of an artist’s
œuvre, usually based on academic research and lifelong practical experience, for
57
Büttner and Finke in Hausmann (ed) (2014), p. 240 and Arora and Vermeylen (2013b), p. 195.
58
Joy and Sherry (2010).
59
Arora and Vermeylen (2013b), p. 195. See also Bonus and Ronte (1997) and Yogev (2010).
60
The secondary market refers to the resale of an artwork, either privately or through an auction
house or dealer. Since many sales on the secondary market occur in highly publicised venues such
as Christie's and Sotheby's, they are often perceived as the entirety of the art market, even though
they just represent a percentage of it.
See Zarobell (2017), p. 16 and Hulst (2017), p. 5.
61
Sachs II (2006).
62
In the primary market, artworks are bought directly from an artist, usually through the respective
artist's gallery. Dealers operating in the primary art market have thus a different mode of operation
than those working in the secondary market. See Zarobell (2017), p. 16 and Hulst (2017), p. 5.
63
Büttner and Finke (2014), p. 238.
64
These can be experts, appraisers, dealers or auctioneers. See von Oertzen (2006), pp. 77ff.
instance as dealer, scholar or auction house specialist. These seasoned connoisseurs

have dealt with countless works of art and hence, have developed a trained eye
regarding brushstrokes and iconology, among other features, which separates them
from the non-experts. Shanteau recognises several universal elements that can be
used to distinguish experts from non-experts: “experience, certification, social accla-
mation, consistency, consensus, ability to discriminate, behavioural characteristics
and knowledge tests.”65 In addition, social acclamation and institutional linkages are
essential elements as well: “being recognized by one’s peers gives legitimacy to the
art expert in an arena in which objective quality assessments are virtually
unattainable”.66 This means that consensus-building is instrumental in this process.
Usually, the broader art community follows the opinion of most experts or the single
expert who is recognised as the primary authority on an artist’s œuvre, such as
Werner Spies on the œuvre of Max Ernst.
However, this system is subject to several caveats and fallacies: while it lacks any
form of certification, qualifying examination or formalised appointment criteria, it is
also obvious that a degree or institutional linkage does not reflect the skills of a
connoisseur and that the most mediatised expert is not necessarily the most knowl-
edgeable one.67 It is argued that these structures would certainly not be tolerated in
other sectors or markets. For instance, in the case of a valuation of property for tax
purposes, it is unimaginable that the expertise of an estate agent, who is actively
involved in the sale, could serve as statement of grounds.68 Furthermore, neither a
court nor a tax authority would accept an expertise which does not follow a certain
structure or form.69 Already in 1929, in the famous case Hahn v. Duveen,70 Judge
Black criticised art experts who “claim to have a sixth sense which enables some of
them after they have seen a picture even for five minutes to definitely determine
whether it is genuine or not”.71 This sixth sense cannot be questioned or cross-
examined and since there is no objective standard, it remains questionable how the
expertise of an expert can be qualified or disproven.72 The dispute in Hahn v. Duveen
was therefore not just about the authenticity of the Leonardo work, but also about the
65
Shanteau et al. (2010).
66
Ibid. See also Jehane Ragai (2018), p. 9.
67
68
Heuer in Weller et al. (eds) (2010), p. 121.
69
Büttner and Finke (2014), p. 238. On the other hand, it is well possible, if not customary, that an
expert or a committee’s negative opinion does not state any reasons, but merely concludes that the
artwork in question is not by the hand of the purported artist.
70
Hahn v. Duveen 133 Misc. 871, 872; 234 N.Y.S. 185 (Sup. Ct. N.Y. Co. 1929). Mrs Hahn sued
the well-known art dealer Joseph Duveen for disparagement as the latter claimed that Mrs Hahn’s
painting was a copy of Leonardo da Vinci's painting La Belle Ferronière, which is displayed in the
Louvre. Interestingly, Duveen drew this conclusion without ever having seen the painting.
See further Brewer (2009), Secrest (2004), pp. 224ff and Brewer in Berthoin et al. (eds) (2015),
pp. 98ff.
71
Hahn v. Duveen, 234 N.Y.S. 185 (Sup. Ct. 1929), at 185.
72
Amineddoleh (2015), p. 422.
legitimacy of the system of museums, dealers and connoisseurs who made up the art
establishment.73 It questioned that the art world has always had an element of magic
and mystery inherent to its internal workings and that connoisseurs' trained eyes
promised an objectivity and reliability in attributing and authenticating works of art
that appealed to the public but were hard to sustain. Consequently, litigation in
authentication and attribution matters is not only time-consuming and very costly; it
also seems to be of little avail for a definitive and decisive determination of
authorship. At the same time, however, there are more and more lawsuits being
filed against experts and art authentication boards for either issuing a negative
opinion or the refusal to issue an opinion at all. As a result of exorbitant defence
costs, several authentication boards and foundations, including those representing
the estates of Warhol, Lichtenstein, Basquiat, Pollock, Calder and Motherwell,
decided to cease their authentication activities altogether.74
This development has serious repercussions for the functioning of the whole
market: while experts theoretically continue to enjoy the authority and monopoly of
attribution and authentication, they increasingly refuse to voice their opinions
because of the fear of being sued on an expanding array of grounds. This creates
an unsatisfying situation for all market participants and represents another concern
that calls for improvement. In line with this, also experts’ monopoly has lately
become the subject of increased criticism: several cases have shown that experts
and their reliance on connoisseurship alone can no longer counter forgers’ elaborate
and sophisticated efforts to defraud. The forgers have been as relentless as their
opponents and they, too, have grown familiar with modern methods of detection and
ways to circumvent them. With the current role of the expert being questioned,
technology and social media come into play and something that is described as
“crowd wisdom”.75 As has become clear by now, the tension between experts and
amateurs is particularly pronounced in the art world due to information asymmetries
and the privileging of expert elites.76 Paradoxically, the aforementioned lack of
objectivity not only gives legitimacy to the profession of expert, but theoretically
73
Brewer (2009), p. 2.
74
The case of Simon-Whelan v. The Andy Warhol Foundation for the Visual Arts, Inc. No. 07 Civ.
6423 (LTS), 2009 is a very good example. After the latter concluded that Mr. Simon-Whelan’s
painting was not authentic and stamped “denied” on its back, the disappointed owner brought an
antitrust claim against the Foundation. As the Foundation has its own collection of Warhols, the
claim alleged that it artificially reduced the number of authenticated Warhols on the market
(Section 1 of the Sherman Act: trade restraint) and that the Foundation engaged in anticompetitive
conduct in order to monopolise the market for the re-sale of works by Warhol (Section 2 of the
Sherman Act: monopolization). After three years, Mr. Simon-Whelan withdrew his complaint due
to waning resources, but by that time the Foundation had already spent about $6 million on its
defence.
75
Arora and Vermeylen (2013b), p. 194. This term refers to the development that the masses are
increasingly participating in valuation, most notably through social media platforms.
76
Ibid. p. 195 and Ragai (2018), p. 16.
also opens the door for new voices, especially with the advent of social media and
new technology.77
However, it is worth reminding ourselves that although mass opinion on art has
historically existed and experts have managed to secure their elite position, there is
no certainty that mass participation would result in better judgement. The outline
above reveals that the identification of a proper expert remains contentious and as a
result, so is the construction of knowledge itself in the art world. However, in an
interesting line of investigation, it is believed that crowd wisdom is very likely to
have an impact on pricing structures. There is no doubt that expert opinion influences
and determines the pricing structure in the art market. Yet, a multitude of forums
increasingly enable the public at large to voice their personal preferences and it
remains to be seen whether the preferences of the masses will challenge the existing
pricing structures or rather, if this causes buyers to seek the guidance of trusted
experts even more often.78
1.2 Current Discussions About Regulation
In 2016, the Deloitte | ArtTactic Art & Finance Report concluded that a lack of
regulation and transparency, secret commissions, price manipulation and conflicts of
interest are the most important threats to the art market: about 75 percent of the
stakeholders interviewed agreed that authenticity, lack of provenance, forgery and
attribution are the biggest threats to credibility and trust in the art market.79
For the first time, the Art & Finance Report discussed this issue in an own section,
indicating that this is of increasing importance for the key market players.80 In the
same spirit, the market operators also agreed that it is less obvious how to address
these problems coherently and effectively. A majority favoured self-regulatory
action under the condition that such collective action does not directly undermine
the commercial interests of their trade.81 The Basel Art Trade Guidelines, prepared
by the Basel Institute on Governance and aimed at collectively combatting ques-
tionable business practices to ensure fair and efficient competition, are a fitting
example of such a self-regulatory initiative. Looking back at the past ten years, the
Deloitte | ArtTactic Art & Finance Report 2021 concludes that the aforementioned
obstacles to growth in the art and finance industry are slowly being addressed: while
77
Ragai (2018), p. 16.
78
79
Deloitte | ArtTactic (2016), p. 140.
80
The five main chapters of the Art & Finance Report 2016 which is published annually by Deloitte
Luxembourg and ArtTactic are: “The art market, Art and wealth management survey, Art as an
investment, Art and technology” and for the first time, “Regulation”. For more information see
pp. 9ff.
81
Ibid.
1.2 Current Discussions About Regulation 13
the lack of regulation and transparency still dominates, the share of wealth managers
identifying these as key obstacles has decreased since 2017.82 Still, practice shows
that there are deep divisions about the question of what should be done. Different
participants pursue their own interests and, being in a competitive business, are
hesitant to voluntarily implement efforts that might potentially hamper their com-
petitiveness and undermine their commercial interests.83 The cases of Knoedler
Gallery, Wolfgang Beltracchi and the Old Master scandal at Sotheby’s have
shown that a market which is greedy for high-value artworks and relies to a great
extent on reputation and trust, becomes extremely vulnerable when these fallible
concepts are encroached upon with fraudulent motives. With ever increasing prices,
the market’s trust-based mentality and the disadvantageous development in the
realm of art authentication, it is obvious that the question of how to better protect
the market from fakes and forgeries is becoming more pressing.84 And indeed, the
Annual Art and Cultural Heritage Symposium held at New York University in
November 2016 based its programme and panels on the finding that “the art world’s
unregulated transactions and lack of transparency, combined with political instabil-
ity and skyrocketing demand from the art market, continues to fuel art crime”.85
Once again, the role of art experts in the authentication process is being chal-
lenged, this time from another perspective: lacking structure in other areas of its
operation, the art market has created a structure as far as the reliance on expert
authority is concerned. As mentioned above, the market surrenders to the concept of
a single expert authority for opinions on authentication and attribution. This depen-
dence on and the corresponding powers of experts are coming under increased
scrutiny as the system’s flaws and drawbacks are revealed. Telling examples are
again the Knoedler and Beltracchi cases that show possible consequences of experts
acting as authorised expert /appraiser and at the same time, as an agent/intermediary
who brokers a future sale.86 In the context of the sale of a forged Rothko at Knoedler
Gallery, Rothko expert Oliver Wick is said to have received a $300,000 consultancy
fee from Knoedler and a $150,000 introductory commission from the buyer, while
Beltracchi and Max Ernst expert Werner Spies agreed on an eight percent commis-
sion fee, to be deducted from the work’s final sales price.87 A conflict of interest is
apparent as soon as the expert’s scholarly interest becomes financial. This holds
equally true for artists’ estates and committees that are not only responsible for
authenticating an artist’s works but collect and sell the works for their own
82
Deloitte | ArtTactic (2021b), p. 19.
83
Gilbert and Glass (2017).
84
Ibid. Also, Sotheby’s purchase of Orion Analytical and establishing its own Department of
Scientific Research in December 2016 seems to be a logical reaction. See further Pickford (2016).
85
For the full programme see https://arthist.net/archive/14072 [last visited on March 30 2022].
86
This double function can be translated most adequately to the German terms
“Kunstsachverständiger” and “Vermittler”. See Roth (2014), p. 52.
87
Ibid. and Beltracchi (2014), p. 483.
account.88 While this is certainly a scenario that deserves further scrutiny, it must
also be considered that experts’ situation is also challenged from the perspective of
owners and claimants who contest economically disadvantageous opinions: in other
words, negative opinions on authenticity. As a result of the increased level of
litigation, the New York State legislature contemplated an amendment to the
New York Arts and Cultural Affairs Law that would provide a certain level of
procedural protection to experts and authenticators by discouraging frivolous law-
suits. However, the proposal has been stalled for nearly three years.89 In the initial
form of the bill, an unsuccessful plaintiff would have to pay the defendant’s (i.e. the
expert’s) legal fees. But the New York State Trial Lawyers Association lobbied for
adjustments and in its revised form, a judge must decide whether the losing plaintiff
has to cover the defendant’s costs.90
As a consequence, there seems to be a standstill in authentication matters:
authentication boards have closed down and individual experts cannot expect
increased protection from better procedural safeguards. Therefore, this book exam-
ines whether and which self-regulatory measures and initiatives can be applied to
shield experts from lawsuits and to streamline and improve the structure of the
authentication process. This would enable clients, courts, and the market to better
evaluate and compare areas of expertise and generally, to restore confidence and
faith in the trade. One telling example of external government regulation is the
Indigenous Art Code, which was endorsed in Australia in 2009 and has had
far-reaching consequences on the trade.
1.2.1 Recent Initiatives of Self-Regulatory Measures
The present situation seems to be characterised by a lack of objective standards and

common practices: from authentication, attribution and appraisal to buyers’ due
diligence obligations—it seems to be far from clear what can and should be expected
from the different parties. Recent developments confirm that there is indeed a need to
improve structures and procedures. From Sotheby’s acquisition of its own scientific
research company—a novelty that to date is yet unseen in other auction houses—to
the Basel Art Trade Guidelines, aimed at establishing uniform industry standards in
88
The case of art dealer Michael Findlay and Marguerite Duthuit, the daughter of Henri Matisse, is a
very good example. The latter issued certificates of authenticity, while at the same time collecting
and selling her father's works for her own account. When she found a painting to be fake that was
previously considered to be authentic, Findlay sued her in a New York State Court for manipulating
the market by disparaging the works in possession of rival dealers. Since Duthuit resided in France,
the New York State Court did not have jurisdiction, but acknowledged that her role as a dealer and
her ability to influence the same market through authentication created a potential conflict of
interest. See Findlay v. Duthuit, 86 A.D.2d 789 (N.Y. App. Div. 1982).
89
Gilbert and Glass (2 February 2017).
90
Ibid. But even in its revised form, the bill has not been passed yet.
1.3 The Research Task Emerging from Recent Developments 15
the art market, several attempts have been made to improve the current situation.
Another step in the direction of self-regulation was taken in January 2017 when the
Responsible Art Market Initiative (RAM) was launched in Geneva.91 Consisting of
interdisciplinary members,92 the initiative introduced a set of voluntary and
non-enforceable guidelines and best practices aimed at helping businesses to comply
with anti-money laundering and terrorism financing regulation and to restore public
confidence in the art market. In addition, the Authentication in Art Law Work
Groups93 established guidelines for experts, both when compiling a catalogue
raisonné as well as giving a written expert opinion that could be relied on by private
parties and by courts alike.
1.3 The Research Task Emerging from Recent

Developments
So far, the majority of existing studies dealing with the topic of regulation in
art-related contexts seem to primarily focus on the issues of money laundering and
tax evasion. While this definitely has its relevance, there is another dimension that
appears to be an issue that is particularly topical, namely the crisis of authentication
and the endangered position of art experts. Forgeries and erroneous opinions on
authenticity and attribution are certainly not a novelty in the art trade: well-known
forgers like Han van Meegeren, who created the “finest” Vermeer, Elmyr de Hory
and Eric Hebborn later became famous in their own right with the consequence that
forgeries of their works appeared on the market. Moreover, the trial of Otto Wacker
in 1932 marked the first time that scientific means were applied to a case of alleged
art forgery and eventually determined the Van Gogh paintings in question to be
forgeries. Before, two renowned experts on Van Gogh were unable to unanimously
agree whether the works were authentic. One would think that the market and
practitioners would have learned from these debacles and subsequently reconsidered
standard practices.
However, very recent examples of forgery have shown that sophisticated forgers
are still able to dupe experts and institutions alike: Wolfgang Beltracchi created the
best Max Ernst and Heinrich Campendonk works, a Chinese artist from New York
was able to perfectly mimic Abstract Expressionist painters in the Knoedler case and
the Old Master painting that was considered to be a lost Frans Hals masterpiece by
experts from both the Louvre and Sotheby’s, was revealed to be modern forgery by a
scientific research company. All these works were not only convincingly
manufactured, but their creators also made-up provenance stories that convinced
91
Sussman (2017) and Neuendorf (2017).
92
These include Christie’s, Swiss art dealer Seydoux & Associés Fine Art and insurance
company Aris.
93
For more information see http://authenticationinart.org/ [last visited on March 30 2022].
both experts and buyers of their authenticity. In light of the developments sketched
above, the overall aim of this book is manifold: first, to analyse recent developments
in the art market that affect the realms of authentication and attribution. Before
getting to the core of these processes, it is necessary to evaluate the market’s
structures and participants as well as its lack of pricing methodology. By using
recent forgery cases as case studies, it can be deduced that the prevalent structures
reveal shortcomings and weaknesses that should be remedied. And since art experts’
liability in different jurisdictions form the central point of discussion, this study is
particularly interested in answering the following questions:
1. What is the current state of the art in authentication matters? This refers to the role
of art experts and likewise to the increasing relevance of science and technology.
The question then arises whether the art market’s traditional structures must be
considered outdated.
2. Is plain scholarship alone able to combat the improving skills of forgers? This
issue is particularly important because scholarship—a key pillar of trust—seems
to be in a crisis with experts shying away from taking a public stance and
authentication boards closing their doors.
3. Based on an affirmative finding on the previous question, should certain methods
of authentication be mandated depending on the circumstances of the case? For
instance, should scientific testing be made mandatory if the value of an artwork
surpasses a predetermined amount?
4. Should umbrella organisations be introduced? These organisations, supported by
scientific means, would establish a systematic method of authentication, and
would issue opinions as the result of collective consultation rather than of
individual conclusions and gut feeling.
Next to that, an important focus throughout this study will be the economic anom-
alies that characterise the art market. An opaque marketplace for which insider
dealing, price fixing and collusion seem to be natural components, the art market
is described as an economic puzzle as it generally does not conform to economic
theory. Moreover, the fact that art is increasingly seen as a financial commodity has
profound repercussions for all players involved, in particular for experts and authen-
tication boards.
Recently, this development was accelerated by the advent of NFTs, either in the
form of digital artworks or fractionalised tokens of physical artworks, which are
bringing the world of art and the world of finance even closer together. While the
notion of authenticity gets a very different connotation when NFTs are concerned, it
is evident that authentication processes retain their importance for the trade of
physical artworks, irrespective if the physical good or a fractionalised part of it is
being traded. Threatening the economic value of an artwork, experts might be sued
for a negative finding on authenticity—a fact which is likely to be aggravated by
transactions with a purely financial interest, such as trading merely token of physical
artworks. Therefore, both the processes of authenticity determination and the
experts’ threat of liability will form part of the discussion.
1.4 Methodology and Delimitation 17
1.4 Methodology and Delimitation
The chosen methodology of this study does not start from a set of predefined
methodologies. Instead, it departs from the concept of a method. This means that
the research task and the formulated research questions will be answered by means
of obtaining relevant information and data. The discussion is supported by case
studies illustrating the recentness of the issues identified.94 Furthermore, expert
liability will be considered from different legal systems: Germany and Switzerland,
the Netherlands, France, the United Kingdom and the United States. Eventually, the
availability of defences will be discussed. Doing so will not only allow for a
comparative examination but also demonstrates the universal nature of the chal-
lenges this profession encounters. Besides the peculiarities of the art market, the
realms of authentication and the role of art experts are another category posing
certain risks and threats to the operation of the trade.
It is these two particular problems that inspired this research and for which it
consequently seeks to develop solutions. The objective is to do so by means of
providing theoretically informed recommendations on how to improve and stan-
dardise the authentication process and protect art experts in the dissemination of their
knowledge and expertise. Yet, the complexity of the topic and the wide range of
areas involved need to be narrowed down. Therefore, other areas for which a
regulatory framework is discussed will not form part of the discussion. Primarily,
this concerns the possibility of using the art trade as a vehicle for money laundering,
terrorist financing and tax evasion.95 These stories range from drug lords who
launder the proceeds of their illegal businesses through art to the United Nations
Security Council Regulation 2199 (2015) combatting the illicit trafficking of antiq-
uities and cultural objects from Iran and Syria. In order to target the Islamic State’s
revenue, there are several instances where the art market is accused of being used for
the aforementioned illegal purposes.96 It is suggested that the absence of a regulatory
supervision and the market’s lack of transparency make it an attractive sector for the
practice of money laundering in particular.97 These factors render art a rather
invisible asset, thereby enabling multi-million dollar transactions between a private
collection selling and a private collection purchasing a work.98 It is especially this
secrecy paired with the lack of oversight that distinguishes the art market from other
markets. In real estate, for instance, where comparable sums of money can be at
stake, titles and deeds require at least a name in order for a transaction to be valid.99
In line with this, the Financial Action Task Force, which is responsible for drafting
94
Recent cases of fraud and forgery will be analysed that illustrate how theoretical assessments
might unfold in practice.
95
For a thorough discussion of money laundering in the art market see Roth (2014).
96
Kinsella (2015) and Giroud and Lechtman (2015).
97
De Sanctis (2013), p. 61.
98
Koldehoff and Timm (2020), pp. 251ff.
99
Ibid. p. 254.
global anti-money-laundering standards, added that the art market can make use of a
unique money-laundering facility: freeports.100 The quantity and identity of art-
works stored in freeports all over the world are unknown, and can at the same
time be seen as a metaphor for the art market itself which conducts much of its
business in mystery.101
Private sales, which represent at least 50 percent of all art transactions, are already
characterised by a high degree of secrecy and anonymity, but with recent revelations
in the Panama Papers, an unprecedented influence of offshore companies was
revealed that makes transactions even more obscure. Freeports play a prominent
role as they enable their clients to conduct business in as much secrecy as possible.
This secrecy may be legally exploited to avoid publicity or ease cross-border
operations, but it can also be employed to evade taxes or to hide ownership histories.
This briefly hints at other important and interesting developments that would be
worth discussing. However, since they would go beyond the scope of this study, they
are excluded from the discussion.
1.5 Structure of the Analysis
Chapters 2 and 3 provide the legal and factual background to the current debates in
the art market. In particular, the chapters seek to clarify the peculiarities that make
the art market specifically vulnerable and susceptible to criminal activity. The first
part of Chap. 2 focuses on the art market’s structure and participants and seeks to lay
the foundation for the subsequent analysis of the ensuing concerns. From recent facts
and figures to an analysis of the major commercial players in the market, this part
also includes several case studies that highlight why some of the trade’s practices
give rise to legal concerns and disputes. The second part deals with one peculiarity in
detail: valuation. It assesses recent developments that brought art closer to being a
commodity and evaluates the role of art as a financial asset. In addition, it addresses
the impact that insider dealing, price fixing and manipulation have on the market’s
functioning and perception. Subsequently, Chap. 3 considers the aforementioned
risks and threats from another perspective, namely that caused by fraud, forgery and
authentication problems. The most important historical and recent forgery cases are
discussed in the first part in order to concretise the theoretical framework. The
second part focuses on the process of authentication. It provides an overview of
the concepts of authenticity and forgery and the central role that is taken on by
experts. The different procedures and standards in authentication are then analysed,
including the roles of authentication boards and catalogue raisonnés. Fuelled by
insights emerging from Chaps. 2 and 3, Chap. 4 provides reasons why the art market
100
Steiner (2017).
101
Koldehoff and Timm (2020) pp. 271ff.
References 19
is characterised by a high economic inefficiency and how this could affect the
success of regulatory measures and initiatives.
In particular, the current regulatory scheme in the US art market and the regula-
tion of the Australian Aboriginal art market serve as illustrative case studies. In
addition, recent initiatives are assessed and likewise, the corresponding changing
role of science and technology. Finally, this part discusses other possible remedies
such as art title insurance, contractual considerations and alternative dispute settle-
ment. Drawing conclusions from this, recommendations will be given on how to
improve the prevailing structure. This will be formulated in Chap. 5, which, based on
the preparatory work and theoretical framework of the first Chapters, lays the
foundation for possible regulatory measures. Based on the analysis, this part is
devoted to translating the shortcomings identified into concrete proposals for reform.
Foremost, the proposals discussed are addressed to the authentication process: each
method of authentication has specific strengths and weaknesses, and it will be
analysed how more regularised standards and centralised methods of authentication
can serve the goal of minimising risk and uncertainty.
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Chapter 2
Peculiarities of the Art Market
2.1 Introduction: The Art Market’s Structure and Its

Participants
Before going into detail regarding the art market’s players and structures, this section
will have a closer look at the characteristics and features that strongly distinguish it
from other markets. An understanding of these peculiarities is crucial for the
appreciation of this market’s increased susceptibility to certain illegal and unethical
behaviour. To begin with, the art market is characterised by a high volume of single
transactions conducted between different individuals and entities in different eco-
nomic and cultural areas and involving often unique objects. This means that each
transaction is a one-off event and that long-term contracts are basically absent.
Another very unusual feature is that the same parties can act in different capacities,
i.e. dealers buying for their private collection, for their business stock or on behalf of
a client, or purchasing from an auction house while at the same time consigning their
property for sale. While these constellations can give rise to conflicts of interest and
unclear obligations, these conflicts may remain unknown to the parties involved.
This is due to the art market’s historical secretiveness and opaqueness which make
gathering comprehensive and objective information very difficult—as will be
highlighted in the following section; even the results of auction sales, which are in
the public domain and could therefore be regarded as objective and reliable, must be
evaluated circumspectly. The art market is thus highly diverse regarding the types of
participants, the locations, and cultures as well as the subject matters concerned.1 In
addition to this diversity, the complexity has also increased over the past decades.
The rise of the Internet and communication technologies have caused all levels of the
1
In 2016, the global arts and antiques trade was estimated to consist of over 310,000 businesses,
employing about 3 million people. See McAndrew (2018), p. 19.

24 2 Peculiarities of the Art Market
art market to be truly international at much lower transaction costs and is said to have
revolutionised the way business is done.2
Therefore, the following scenario, which involves at least five different countries,
cultures as well as export and tax regimes, is not uncommon in the international
trade: a painting owned by a German collector, stored in Switzerland and consigned
for auction in London is exhibited in Hong Kong, Paris and Geneva before being
sold to a bidder in New York who purchased the work on behalf of a buyer residing
in Brazil.3 This transaction chain is already very long but can be even longer in
private sales, when art advisors, agents and other representatives are involved as
well. Such a level of diversity and complexity is rare in other markets and represents
a serious risk for external investors who apply patterns and models derived from
other, more homogenous markets.4 In particular, it is another typical feature that
most participants are highly specialised and operate exclusively in a relatively
narrow part of the market (which is generally defined according to an artist, genre
or even subject matter) and the many subdivisions make it very difficult to obtain a
true view of the overall market. What further adds to this complexity is the art
market’s characterisation as “a trade in things which have no price”.5 This statement
hints at the fact that art is not merely an economic commodity, but rather a good with
high cultural, symbolic, and aesthetic values as well. However, Bourdieu’s statement
cannot be interpreted as to exclude situations in which art functions solely as a
commodity that yields returns and profits—this would certainly negate economic
reality and, moreover, the mere existence of art investment funds and art-secured
lending affirms that there is yet another dimension to this comment.6 These some-
what contradictory features of one and the same asset are inherent in the art market
and constitute the basis for the complexity of this specific marketplace. Iain Robert-
son, head of Art Business Studies at Sotheby’s Institute of Art, argues that the art
market “has as much to do with entertainment as it has to do with the hard-headed
world of global finance”.7
In other words, one of the peculiarities of the art market is that its operation is
evocative of the allure of the film and media industry, especially with the major
evening auctions at Sotheby’s and Christie’s, while it is at the same time concerned
with financial aspects in the form of profits and returns that are possibly to be
yielded. Strikingly, the interest in the return of art as investment and its extensive
presence in the media are nothing new. Already in 1995, Frey and Eichenberger
commented that the belief “that the art market yields huge profits [. . .] has been
nourished by the media which were all too ready to predict that the rapid increase in
the general price level of auctioned art objects in the 80’s, and in particular the even
2
Christopherson in Dempster (2014), p. 51 and Dempster (2014), p. 5.
3
Adam (2014), p. 117f.
4
Christopherson in Dempster (2014), p. 49.
5
Bourdieu (1993), p. 74.
6
Horowitz (2011), p. 1.
7
Robertson (2005), p. 13.
2.1 Introduction: The Art Market’s Structure and Its Participants 25
higher record prices paid for paintings by Van Gogh, Picasso and Renoir, would
persist forever”.8 Add Modigliani, Bacon and Twombly and this statement would be
strikingly evocative of the news coverage of auctions in recent years. On the other
hand, it is also argued that the art world has been subject to fundamental structural
changes with no relationship between its participants left unaffected.9 From an
industry with many small, often family-run companies catering predominantly to
the trade, specialists and connoisseurs, it has evolved into a global industry with a
geographically dispersed client base.10 At the same time, traditional distinctions
between intermediaries, such as dealers and auction houses have become blurred
with the latter carving into dealers’ territory by increasingly conducting private sales
and offering more and more art-related services11 As has been previously hinted at,
the art market is composed of a plethora of different sectors and categories which are
not only subdivided according to genre, but also according to geography and
historical periods.12 It is thus questionable whether the expression the art market is
an appropriate term to cover all these very distinct categories. Nevertheless, the next
section will give a description of recent facts and figures of this market, as well as of
what is called a new era of valuation and prices.
2.1.1 Facts and Figures
Following its biggest recession for 10 years in 2020 and defying predictions that it
would long suffer from a pandemic crash, the art market recovered strongly in 2021.
According to the UBS Art Basel Report 2022, the art market has shown great
resilience in 2021, returning to live sales, fairs, events, while online sales continue
to grow.13 Even in the early days of the shutdown in 2020, auctions houses and
dealers thrived on online and private sales to collectors who were confined to their
homes but still wanted to splurge on new artworks.14 Ever since, dealers and auction
houses have adjusted to this new two-tier system of online and offline sales and
8
Frey and Eichenberger (1995), p. 207.
9
Dempster (2014), p. 5.
10
Ibid.
11
Ibid. See also Pownall (2017), p. 12.
12
These categories are well illustrated by Sotheby’s and Christie’s sales departments which are
grouped according to artworks sharing distinct historical and geographical features. However, one
should bear in mind that the categories are not always organised according to the same criteria, e.g. a
modern and impressionist sale at Christie’s would not necessarily include all paintings that would
be included in such a sale being conducted at Sotheby’s. Moreover, curated sales have recently been
held at Christie’s New York such as The Artist’s Muse or Looking Forward to the Past; these sales
combined offerings from various eras, mixing Modern and Impressionist artworks with contempo-
rary art from the twentieth century. For more information see Maneker (June 27, 2016a).
13
McAndrew (2022), p. 14 and Kinsella (March 29, 2022).
14
McAndrew (2021), p. 8.
events.15 In fact, following the largest drop in sales in 10 years in 2020 of almost a
quarter to $50.1 billion, the global art market even surpassed pre-pandemic levels in
2021, with aggregate sales increasing by 29% to $65.1 billion.16 The U.S. market
maintained its leading position with 43% of worldwide sales (sales increased by 33%
to $28 billion), with China coming second ($13.4 billion of sales, up by 35%) and
followed by the U.K. market ($11.3 billion, up 14%) and the French market, which
with total sales of $4.7 billion, witnessed the highest turnover in 10 years and a 50%
increase compared to 2020.17 In contrast to this, the UK’s global share is its lowest in
a decade.18 In 2020, imports were already down by one third compared to 2019 and
in 2021, by almost 50%.19 Brexit is considered to be the main reason for this decline
in imports, which have been further hampered by the COVID-19 pandemic.20 The
obligation to pay import VAT when bringing art from the EU into the UK, the
paperwork, customs clearance costs and other formalities are deterring many trans-
actions. In addition, the 5% import rate (which is the lowest in the EU) previously
made it an attractive choice for those wishing to import art from non-EU countries
and then ship them to other European countries at no extra cost.21 As a consequence
of this and taken together with the increase of remote bidding possibilities that
enable auction houses to pivot business to different places, McAndrew concludes
that buyers will have more choice about where to buy and sell, putting pressure on
places that do not get the regulatory balance right.22 After dealers’ sales declined by
20% in 2020, they were up again at $34.7 billion in 2021, an 18% increase that still
left them below the level of 2019 though. Dealers suffered disproportionally from
the cancellation of many fairs and museum shows. Yet, the biggest dealers saw the
highest rise in values in the segment of sales between $5 and $10 million, while
smaller dealers experienced smaller gains. Driven by a good supply of high-quality
works and an influx of new buyers, sales at public auction increased by 47% to
annual sales of $26.3 billion in 2021.23
As regards art fairs, their calendar slowly resumed in 2021 and even with a
reduced number of fairs, sales advanced to 29% of total gallery sales, yet not close to
the 43% reported in 2019.24 For the first time, the 2022 edition of the UBS Art Basel
Report also has a look at NFTs (non-fungible tokens). The multi-million-dollar sale
of the Beeple NFT Everydays: The First 5000 Days (2021) at Christie’s in March
2021 was an industry-altering event, bringing the traditional art market into realms
15
Boll (2020), pp. 76ff.
16
Shaw (29 March 2022a) and Villa (March 16, 2021a).
17
Ibid.
18
Shaw (4 May 2022b).
19
Ibid. and McAndrew (2022), p. 28.
20
Ibid.
21
Shaw (4 May 2022b). The majority of the UK market (around 80%) is made up of non-EU trade.
22
Shaw (29 March 2022a).
23
McAndrew (2022), p. 122 and Shaw (29 March 2022a).
24
McAndrew (2022), p. 89.
of technology that meant to expand the definition of art.25 Despite the landmark sale
of Beeple’s collage, NFTs entered the auction sector only at limited values.26 NFT
sales at Christies totaled $150 million (including the $69.3 million of the Beeple
sale) and Sotheby’s NFT sales reached $80 million.27 In line with this, just 6% of art
dealers had sold NFTs in 2021 and just under half (46%) stated that they have no
interest in doing so.28 On other dedicated NFT platforms, the value of sales for
art-related NFTs was estimated at $2.6 billion, expanding over one-hundred-fold
(taken together with sales of collectibles, NFTs sales totaled $11.1 billion).29 With
an average resale period of 1 month (versus 25 to 30 years for art), art-based NFTs
attract very speculative buyers which in turn lead to various interesting issues worth
considering.30 Before dealing with this new phenomenon of NFTs more in detail, the
next section will first have a closer look at general developments in the area of
valuation of artworks.
2.1.2 A New Era of Valuation and Prices
It is an obvious fact that the art market has undergone profound changes in the last
decades. For this analysis, the focus is on the speculative aspect that developed
around the sale of art and coincided with the rise of art as a financial asset in
investment funds or as collateral. These developments have brought about new
phenomena: much attention is placed nowadays on the results of major auction
sales; traditional collectors have been joined by managers-turned-art buyers who put
a strong emphasis on the investment aspect of their purchase and art advisors hitting
headlines for allegedly defrauding their clients by charging marked-up prices and
commissions. In contrast, the art market up until the mid-twentieth century was
primarily dealer-led and it was not until the 1960s that auction houses’ new market-
ing strategies shifted the balance of power in their favour.31 In 1974, the British Rail
Pension fund, advised by Sotheby’s, invested around £40 million in art portfolios—
the first large-scale and systematic attempt to treat art as an investment vehicle.32 In
the 1980s and 1990s, collectors from China and Japan fuelled the (Post-) Impres-
sionist boom in the traditional market centres in London and New York, causing
auction prices to skyrocket to unprecedented figures.33
25
McAndrew (2022), p. 33.
26
Ibid. p. 16.
27
Ibid.
28
Ibid. p. 15.
29
Ibid. p. 22.
30
Ibid. p. 23.
31
Encyclopedia Britannica, The Art Market: the twentieth century.
32
Ibid.
33
Ibid.
Since that time, the art market has witnessed a period of substantial expansion and
resilience: in the 25 years to 2011, the market doubled in size and grew over 575 per
cent from its lowest point during this period in 1991 to its highest in 2007.34 The
market is thus said to have been “on fire” during the twentieth century, recovering
speedily after the global financial crisis of 2008 and 2009 and out-performing many
traditional asset classes.35 This development coincided with an explosion in partic-
ipation and interest: consumers, a new breed of investors, and new business models
have been added to otherwise centuries-old business practices.36 It is suggested that
auctions have evolved into the prime indicator of “ultra-conspicuous consumption”
and when the evening sales of Post-War and Contemporary Art at Christie’s and
Sotheby’s in New York in November 2013 reached unprecedented heights, auction
house executives heralded a new era of the art market.37 At that time, both Christie’s
and Sotheby’s reached record-breaking returns, with Francis Bacon’s triptych Three
Studies of Lucian Freud fetching $142 million and according to Brett Gorvy, former
worldwide head of Post-War and Contemporary Art at Christie’s, “this isn’t a
bubble. It’s the beginning of something new”.38
And indeed, the years that followed have proven this prediction correct: in
autumn 2014, Christie’s brought in the highest-ever total for an auction, when
their Contemporary Art Sale in New York grossed $853 million across 75 lots—
thereby trumping its previous record of $745 million which was set in its Contem-
porary Art Sale in May of the same year, in the same room.39 And again, in May
2015, Christie’s pushed the market to new highs when it sold Picasso’s Les Femmes
d’Alger (Version ‘0’) for $179.4 million in its curated sale Looking Forward to the
Past, making it the most expensive work ever sold at auction.40 And it was Christie’s
once again in November 2015 that sold Modigliani’s Nu Couché (1917–18) for $170
million, making it the second-highest price paid for an artwork at auction.41 While
these headline-fetching results seem to suggest that “anything is possible in an
overheated art market”,42 the overall art market growth started to show signs of
slowing toward the end of 2015 and in early 2016.43 The sale of Leonardo da Vinci’s
Salvator Mundi for about $450 million in November 2017 obliterated the previous
world record once again and yet, this price should be regarded as an isolated
34
35
36
37
Roberta Smith (November 13, 2013).
38
Adam (15 November 2013).
39
Duray (November 12, 2014). However, Christie’s outstanding results should not be taken as a
general benchmark as Sotheby’s Contemporary Art sale merely fetched $344 million in total.
40
Burns and Shaw (12 May 2015).
41
Pogrebin and Reyburn (November 9, 2015).
42
Ibid.
43
occurrence.44 But it was commentated shortly after the sale that “the new hunt for
masterpieces now puts a billion-dollar hammer price within reach”.45 However,
driven by tech-sector wealth creation and COVID-19-related stimuli, it is suggested
that the boom in the soaring art market will at least last another 6 months into the
year 2022.46 In line with this, also the use of third-party guarantees flourished,
fuelling Nouriel Roubini’s allegation of price manipulation cited above, as auctions
are supposed to be public sales and not “orchestrated events” with the outcome being
determined by private deals made in advance.47 As far as the guaranteed sale of
Salvator Mundi is concerned, the sum and the third-party guarantor remain
undisclosed, but rumour has it that it was guaranteed by the consignors of Warhol’s
Sixty Last Suppers, which was sold at the same auction.48 Alternatively, it was
speculated that the work was guaranteed in a double-bind guarantee—namely that
Dmitry Rybolovlev, the seller of Salvator Mundi, in turn guaranteed Sixty Last
Suppers through his family trust.49 These assumptions, even though they are just
speculation, nevertheless demonstrate the complexity and variety of purposes that
guarantees can be used for. As regards the new era of valuation and prices, Anders
Petterson, founder and managing director of ArtTactic, argues that factors such as
historical significance, rarity or aesthetic appeal which once determined an artwork’s
value can no longer justify the extraordinary prices. Instead, there is increased
reliance on exogenous factors such as “economic uncertainty, the super-rich and
their increasing appetite for alternative assets”.50
This development was also acknowledged by gallery owner Thaddaeus Ropac,
who linked the commodification with art to the emerge of short-term profiteers: “it’s
a phenomenon of the past fifteen years where art has become a commodity and it’s
purely bought to resell within a limited period of time for profit”.51 According to
Ropac, the disappearance of knowledgeable collectors who believe in the cultural
content of the artworks they purchase is one of the key tests for the art market’s
future. As a result, galleries started to maintain “blacklists”: collectors, who buy art
with the intention of re-selling it quickly, are banned from purchasing from the
gallery again.52 Inevitably, this development also has an influence on the general
44
See Christie’s, Leonardo’s Salvator Mundi makes auction history.
Interestingly, the very same painting is at the heart of the dispute between Dmitry Rybolovlev
and Yves Bouvier that is discussed in Sect. 2.2.6 of this chapter. See also Shortland and Shortland
(2020), p. 157.
45
Gammon (November 30, 2017).
46
Gerlis (December 30, 2021).
47
48
Ruiz and Brady (30 November 2017).
49
Ibid.
50
Petterson (May 28, 2013).
51
Neuendorf (February 3, 2017).
52
Ibid. Speaking at the ‘Talking galleries’ symposium in Barcelona in January 2017, Ropac called
investors a threat to the sustainability of the gallery model and admitted that his gallery maintains
blacklists to identify investors who would buy artworks out of purely financial motives.
perception of art by the wider public. According to Don Thompson, who extensively
wrote on the curious economics of contemporary art, the many auction record prices
in the previous years “illustrate the ease with which art history is now rewritten with
a chequebook”.53 However, this change of perception should be taken with a grain
of salt: since media coverage generally focuses on “spectacular gains and record-
breaking hammer prices”54 achieved in the major auction sales, this should not be
seen as representative of broader trends in the art market.55 Relying on such general
information can convey a false sense of security to buyers who should be aware that
the art market is composed of so many smaller categories that any general statement
regarding its performance must be taken with some amount of caution. While
valuation and prices may have entered a new era, this is certainly not the case for
other structures: ever since its beginnings, the art market has encountered the
difficulty of finding generally accepted parameters for an objective determination
of an artwork’s fundamental value, which is due to the unique nature of art. Art
historians may embody a rather hostile view towards the relationship between art
and the economy: they appreciate art for its own sake and attach great importance to
its historical and cultural significance, thereby stressing its incommensurability.56
And yet, it is a given fact that art is traded on the market and that in this process, a
specific economic value must be attributed to it. It is therefore another intrinsic
paradox of the art industry that a work of cultural importance is the subject of
commercial transactions, conducted for profit. In line with the general increase in
art’s economic value, recent years have witnessed the emergence of the possibility to
invest in art funds which are primarily concerned with maximising profits by way of
investing in art, but have to compete with more conventional assets such as real
estate, gold and shares.57 It is again in this context that the market’s peculiarities and
the topic of regulation come up: compared to these other investment possibilities, the
art market’s opaqueness, its lack of general standards and procedures and its
traditional reliance on trust and discretion are considered obstacles to success.58
While some stakeholders predict that the market for art and alternative asset invest-
ment funds will grow within the next few years, others fear that the lack of regulation
as well as the uncertainty of valuations will unsettle investors and hence, counteract
the growth of such funds. Furthermore, art inevitably brings with it the risk of both
authenticity and title defects which are particularly troublesome for art funds since
they can lead to a loss of investment, thereby adversely impacting the fund’s
53
Thompson (2012), p. 61. According to critic Kenny Schachter, in the art world “there is little or
no use (or demand) for skill, criticism or connoisseurship when the singly recognised indicator of
value is price and that alone”. See Schachter (January 23 2016).
54
Ibid.
55
Barclays (2012), p. 18.
56
Velthuis (2003), p. 187.
57
58
Gerlis (15 May 2013).
performance and investors’ return.59 The general perception of the art market,
bolstered by a new class of buyers and the new role of auction houses, has thus
undergone profound changes and adjustments. To complete the picture, the next
section will have a closer look at the major art market participants and their roles and
stakes in the trade.
2.1.3 A New Phenomenon: NFTs and the Tokenisation of Art
NFTs were the newest, if not biggest craze of 2021.60 Even though digital or
computer art is not a new phenomenon but has been around since the 1960s, the
sale of Beeple’s work Everydays—The first 5000 Days (2021) has brought much
attention to digital artworks and NFTs.61 With the opening bid starting at just $100
on February 25, 2021, the purely digital work with a unique NFT eventually sold for
$69.3 million, making Beeple the third most valuable living artist in terms of auction
prices after David Hockney and Jeff Koons.62 While it is not uncommon to see eight-
figure art sales, this sale received a lot of attention because the piece was sold as an
NFT, which means that a digital file is represented by a token on a blockchain which
makes the work unique and hence salable. Without this feature, the digital image
could be downloaded, saved and shared by everyone, without any ownership
rights.63 Beeple’s collage comprises 5.000 artworks which the artist has been posting
online daily since 2007 and the collaged JPG was made or “minted” in February
2021 as a NFT.64
The sale marked the first time that an auction house would accept cryptocurrency
(in this case Ethereum) as payment.65 Following this trend, Sotheby’s accepted
payments in Bitcoin and Ethereum for the first time in its auction of Banksy’s
Love is in the Air in May 2021 and the artist’s highly publicised Love is in the Bin
59
Demarsin (2010), p. 257.
60
Shaw (29 March 2022a).
61
Already in 1985, Andy Warhol was gifted an Amiga 1000 computer and he used the Propaint
programme to create several digital drawings. Five of these drawings were sold in the Christie’s sale
Andy Warhol: Machine Made in May 2021 as NFTs. However, those involved with recovering the
images from Warhol’s computer in a three-year long restoration project, argue that the NFTs do not
represent the original work as they were derived from images reproduced at a higher resolution and
reformatted using modern technology, thereby altering their characteristics. While Warhol’s orig-
inal artifacts were 320 pixels by 200 non-square pixels, the NFTs are 4500 by 6000 pixels. This is a
very specific, yet striking issue regarding the authenticity of NFTs which are derived from what can
be called ‘antique’ digital art. See Villa (May 21, 2021b).
62
Kinsella (11 March 2021b).
63
Kaczynski and Duke Kominers (November 10, 2021).
64
Reyburn (11 March 2021a).
65
Christie’s, Beeple’s opus, available at https://www.christies.com/features/Monumental-collage-
by-Beeple-is-first-purely-digital-artwork-NFT-to-come-to-auction-11510-7.aspx [last visited
March 30 2022].
was paid for in cryptocurrency in the October 2021 auction as well.66 While the
Beeple sale already baffled many market participants, there was also criticism of
Beeple’s headline-snatching token by the crypto community.67 The fact that the NFT
was sold by Christie’s, one of the oldest and most esteemed auction houses in the
world, was seen as a validation by the traditional art world, while blockchain’s aim is
to actually eliminate gatekeepers of all types.68 Some consider the power of gate-
keepers as an “old art world’s problem”, namely that only few people and institu-
tions decide who may participate in this hierarchical system.69 This becomes
especially blatant in the crypto economy which thrives on a at times utopian rhetoric
about freedom and democratization. Because of this ideological clash, Christie’s
involvement in the auction was criticised as a “betrayal of crypto’s core values”.70 In
any case, this sale illustrates the awkwardness of merging the radical newness of
NFTs with century-old art market structures by using the same institution and
platform on which physical artworks and collectibles are sold.71 In March 2022,
1 year later after the sale, Blake Gopnik wondered if NFTs have changed art and
concludes: “hardly at all”.72 And that is because “NFT art” simply does not exist.73
In Gopnik’s view, an NFT is nothing more than a certificate of ownership and
authenticity that can be attached to any kind of physical object.74 In fact, he states
that sales, rather than aesthetics, were the reason NFTs were created.75
Interestingly, also Beeple himself has changed the digital for the physical in an
exhibition at Jack Hanley in New York, where he is showing paintings, drawings
and prints.76 When an artwork comes up for sale at auction, it is usually unques-
tionable that potential bidders or even interested parties would have a look at it
during the auction preview. But the answer to this question might be slightly
different when the sale of Beeple’s Everydays is concerned: while the buyer
Anand Venkateswaran (also known as Twobadour) stated that he did not need a
preview since he was sure that his purchase is destined to be a “billion-dollar piece”
in the future, previewing the piece would also have meant going through 5.000
66
Thakkar (17 June 2021) and Reyburn (11 March 2021a). See Sotheby’s, catalogue entry for the
lot, available at https://www.sothebys.com/en/buy/auction/2021/contemporary-art-evening-auc
tion-2/love-is-in-the-bin-2[last visited March 30 2022].
67
Schneider (18 March 2021a).
68
Ibid.
69
Schneider (March 11, 2021b).
70
Ibid.
71
Ibid.
72
Gopnik (March 3, 2022).
73
Ibid.
74
Ibid.
75
Ibid.
76
Small (March 4, 2022) and Kazakina (March 3, 2022). Each work is sold with a blockchain-based
collectible for authentication purposes. To produce his physical output, Beeple has a staff of 16 full-
time employees.
individual images.77 This is exactly what journalist Ben Davis did: he spent a day
zooming in the images on the artist’s website and grouped the digital sketches into
basically four different categories, concluding that “none is likely to age well”.78 The
most recent, well-known and successful category consists of works showing digital
and political satire commenting on tech dystopia and political and social media
outrages in the Trump years and only such works were shown individually during
the Christie’s preview. However, this is just the most recent tranche. Most images
predate this period and are either rendered in a sci-fi style (2015–2018), as a daily
exercise to try out tools (2011 to 2014) or as uploaded cartoons from the time before
Beeple even became a pixel-based artist (2007–2011). Overall, the quality of these
individual images, either artistic or social, is highly dubious—with the only advan-
tage being that everybody could download the collage, zoom in and form an own
opinion. If it is indeed the content of the opus that will determine the piece’s
reputation in the long term, it is likely that the work will only be remembered for
its exceptionally high sale price and for introducing modern technology as a further
category of art sales. The Beeple sale is reminiscent of the development in the art
market that the financial fetish value of an artwork or product seems to have
surpassed its cultural or historical value, at least as far as these new tech collectors
are concerned.79
Moreover, 2021 also saw the spreading of fractional-ownership projects involv-
ing NFT technology, with many start-ups offering fractional investment in both
physical and digital artworks.80 According to Adam and Tully, the idea of fractional
investment in art has been around for over a decade.81 Masterworks, for instance, has
securitised more than 80 artworks since 2019 and spent about $400 million on art in
2021, a number that should be increased to $1billion in 2022.82 The company buys
blue chip artworks, files an offering circular for individual artworks with the United
States Securities and Exchange Commission (SEC) and allows its 250,000 users to
buy shares, before selling the respective artwork after a period of 3 to 7 year.83
Recently, Loïc Gouzer, former head of contemporary art at Christie’s, co-founded
Particle, which allows potentially thousands of investors to share ownership of
77
Davis (March 17, 2021).
78
Ibid.
79
Koldehoff and Timm (2020), p. 285: “Der gezahlte Megapreis wird selbst zu einer Trophäe der
maßlosen Verausgabung, zu einem Zeichen der unbegrenzten finanziellen Möglichkeiten seines
Besitzers”.
For an extensive study on tech collectors see Gold et al. (2021).
80
McAndrew (2022), p. 33. According to the Deloitte | ArtTactic Report 2021, 64 percent of
younger collectors expressed a strong interest in NFTs and 43 percent in fractional investment
linked to artworks. Strikingly, this number was even at 86 percent during the COVID-19 pandemic.
See p. 24.
81
Adam (30 October 2019) and Tully (December 10, 2021 and August 29, 2012).
82
Tully (December 10, 2021).
83
Ibid.
fractionalised artworks.84 The company’s first acquisition is Banksy’s Love Is in the

Air (2005), which was acquired at auction for $12.9 million and subsequently split
into 10,000 NFTs valued at $1500 each. After the initial offering, the ‘Particles’
entered the secondary market across the existing NFT platforms.85 The physical
artwork is owned by the Particle Foundation, a non-profit division of the company,
which even tours the work so that collectors can see the pieces they can claim to
own.86 The foundation will be funded by royalties received in the resale of Particles
since the smart contract attached to the Particles stipulates that a percentage of the
resale value is returned to the creator.87 Another recent example is Sygnum, the
world’s first regulated digital asset bank headquartered in Switzerland and Singa-
pore, which sold 4000 tokens of Picasso’s Fillette au beret (1964) for 1000 Swiss
francs each.88 These tokens, known as Art Security Tokens (ASTs) are seen as the
symbol of a new genre of investments: based on Switzerland’s Distributed Ledger
Technology Act (DLT), ASTs create legal certainty without any need for a third-
party that verifies the link between the token and the underlying physical asset.
Instead, the digital tokens are automatically recognised by courts and consequently
represent direct ownership in the painting.89 These tokens are traded on the platform
SygnEx, with the most recent trade on April 1, 2022 changing hands for 1100
francs.90 While Sygnum is a regulated bank with a Swiss banking license, fractional
art businesses are generally not regulated by any financial regulatory authority.91 As
regards Masterworks, the company itself is not licensed, registered, or supervised as
a broker dealer or investment adviser by the SEC. Because of the abovementioned
developments, regulators in the US and UK have been pushing for greater controls of
cryptocurrencies and NFTs, stressing the fine line between the sale of fractionalized
NFTs (not subject to controls) and financial securities (regulated by governments).92
84
Escalante-de Mattei (December 1, 2021).
85
Ibid. The tokens can be traded on the platform marketplace.kalao.io which lists the prices in the
currency AVAX, the native cryptocurrency of the blockchain Avalanche. See https://marketplace.
kalao.io/collection/0xf675a87397a6239eaf95ad948670a5b19d076c59 [last visited May 5 2022].
86
Ibid.
87
It is considered an advantage of smart contracts that they can be programmed to automatically
deduct royalties from every resale, thereby benefitting artists’ economic position.
88
Rivers (April 27, 2022).
89
Ibid.
90
For the trade history see https://www.sygnum.com/sygnex/trade-history/?asset=PIC1-DCHF&
page=1 [last visited March 30 2022]. The assumption that the resale of these shares is rather illiquid
seems to be confirmed by the trade history of Picasso’s Fillette au beret cited above: Between
October 2021 and May 22, only 13 transactions were recorded.
91
Tully (December 10, 2021).
92
Pryor (28 December 2021).
2.1.3.1 Art-Related NFTs as a New Asset Class
Apart from the question if the art market considers art-related NFTs to be art within
the traditional meaning of its business, and whatever distribution mechanism
(Token, NFT or AST) is employed, it is a fact that these vehicles represent a
completely new asset class.93 In the past, there was no possibility of separating the
“owner” of a digital artwork from someone who had just saved a copy on their
computer and due to this absence of clearly defined property rights, there was no
market for digital art. This was changed by the advent of NFTs, an encrypted unit of
data stored on a digital ledger, typically a blockchain.94 The token or unit of data is
non-fungible since only the owner can access or transfer that unit of data. Therefore,
NFTs are used to create digital ownership, something like a digital deed for every-
thing ranging from art and real estate to any kind of collectible such as baseball cards
or sneakers.95 A non-fungible token represents a unique item in contrast to fungible
tokens, which are mutually interchangeable such as cryptocurrencies.96 For instance,
bitcoin tokens are interchangeable and function as cash in a way comparable to
dollar bills.97
In general, tokens are classified depending on their economic function: payment
tokens such as Bitcoin or Ethereum which are used to pay for goods or services,
investment tokens with attest certain rights to their holder and consumer tokens that
can be spent within a crypto-platform only.98 As regards the sale of a NFT, there are
three steps involved: first, the artist “mints” a NFT for the artwork on the blockchain,
essentially registering the piece and defining its status as either unique or a limited
edition asset.99 Strictly speaking, a token is a sequence of alphanumeric characters
that identify the artwork on the blockchain, comparable to a tracking code or an
inventory number in a gallery’s database that locates the actual asset.100 In the
majority of cases, the token is merely a link to the artwork, which is hosted on
another server. In a second step, the NFT is made available for sale on an online
marketplace platform, governed by a so-called smart contract which includes the
token’s terms and conditions and terms of sale.101 In contrast to traditional market-
places, these are hard-coded into the smart contract, which means that payment to the
artist and transfer of ownership to the buyer happen automatically and at the same
93
Kaczynski and Duke Kominers (November 10, 2021). At this point it is worth mentioning that the
online encyclopaedia Wikipedia took the decision not to classify NFTs as art. See further
ArtnetNews (January 13, 2022).
94
Frye (2021).
95
Kaczynski and Duke Kominers (November 10, 2021).
96
Yasar (13 May 2021).
97
Romeo (9 April 2021).
98
Rusanova and Polyakova (2020).
99
Schneider (March 11, 2021b).
100
Ibid.
101
Ibid. The standard Ethereum smart contract is known as ERC-721.
time.102 Another advantage is that a smart contract can include a built-in resale
royalty, so that this fee is automatically paid anytime a token is resold on a platform.
This, however, can be bypassed by selling an NFT through an auction house or by
simply omitting this redistribution component in the smart contract. Each of these
steps is usually instantly documented and time-stamped on the blockchain, making
the process transparent and trustworthy for everybody with access privileges and
sufficient technological understanding.103 Yet, this is exactly what was criticised
regarding the Beeple sale: even 36 hours after the sale, two transactions verifying
and legitimising the sale were still unaccounted for: namely the token being
connected to the MakersPlace platform and the transfer of ownership.104 This is
due to the fact that the auction and payment were done off-chain, causing some steps
in the NFT sale to be executed manually. The absence of celebrated smart-contract
features, namely on-chain transparency, and the promise of artist resale-rights in
perpetuity, would have been avoided if the sale had taken place on-chain.105 From a
hard-line crypto perspective, the sale might therefore not be considered as the first
NFT sold by an auction house, but rather as a PR event. Whether or not Everydays
qualifies as a proper NFT by the standards of blockchain proponents, it is now
considered an illustrative example of too many buyers with excess crypto wealth and
“conspicuous consumption in what has become an all-consuming market frenzy”.106
The discussion furthermore vividly exposes the philosophical divisions that exist
between the art and the crypto community, and it will be interesting to see how these
extremes will coexist in the future.
Commonly and quite logical, NFTs in the art world are associated with an image,
but this is not necessarily required: when acquiring an NFT, exclusive access to the
data which constitutes the NFT is given; any image, title or other detail is irrele-
vant.107 Since NFTs are meant to be unique in the sense that they are one-of-a-kind,
they qualify as a limited edition of a digital file that could otherwise be
reproduced.108 A point of criticism is that, even though NFTs claim to facilitate
ownership of unique digital artworks, there is nothing to own in the first place: every
copy of a digital file is identical, there is no concept such as a “unique” digital file.109
This means that the purpose of NFTs to make digital artworks unique by connecting
them to a digital file is impossible: NFTs are said to be “gangbusters at authenticat-
ing themselves, but utterly incapable of authenticating anything else.”110
102
Ibid.
103
Ibid.
104
Ibid. The only part visible on the blockchain was the minting of the token as a link to a JPG of the
artwork.
105
Ibid.
106
Ibid.
107
Frye (2021), p. 4.
108
Romeo (2021).
109
Frye (2021), p. 4.
110
Ibid. p. 6.
Traditionally, the art market has been thriving on the concept of scarcity. Most
artworks are unique and even if they are created in a reproducible medium, they are
reproduced in a limited edition to control output and create artificial scarcity.111 In
addition, artworks are commonly accompanied by a certificate of authenticity, either
by the artist himself or by the respective expert. On the other hand, when buying a
digital artwork that claims to be unique, the purchaser merely acquires the right to
claim ownership to an idea.112 It is argued that the rise of Bitcoin and other
cryptocurrencies has triggered the advent of related products, including NFTs.113
For the time being, this leaves room for speculation if this development will be
sustainable or if the tech-fuelled activism will eventually find other areas of interest.
Plenty of digital marketplaces have emerged which enable speculators to create, sell,
buy and trade NFTs. The first marketplace for digital art was launched in 2017 on the
Ethereum blockchain: CryptoPunks showed 10,000 different cartoon characters
which could be claimed freely.114 All were claimed quickly, and a secondary
marketplace emerged, where collectors could trade the characters for increasing
prices. In March 2021, CryptoPunk 7804 sold for the equivalent for about $7.6
million in Ethereum, five times the previous record set for a CryptoPunk just the
month before.115 About half a year later, it was reported that another CryptoPunk
9998 might have sold for as much as $500 million in crypto currency.116 In
traditional finance, such a transaction is known as a wash trade: the seller and
buyer is one and the same and manipulates an item’s market value.117 In addition,
the transaction was funded by a “flash loan”, a type of unsecured lending that has
become prevalent in the world of decentralised finance. Ethereum-based exchanges,
governed by smart contracts, offer such loans for the duration of a single transaction,
meaning that the fund is paid back at the end of the transaction. If the loan is not paid
back, the transaction will be reversed, and the funds will be returned to the lender.
Participants who are able to decode blockchain information, traced the Ethereum
addresses involved in the sale of CryptoPunk 9998 and discovered that the buying
address had flash borrowed the funds, which were immediately after the sale sent
back to the buyer who returned the NFT and put it up for sale again, this time for
double the amount: $1 billion or 250,000 Ether.118 Even though the owner did not
make any money with the sale, it shows how prone to manipulation these
transactions are.
Another example which marked the NFT mainstream moment was the emergence
of CryptoKitties in 2017: breedable virtual cats were traded for more than six fig. US
111
Ibid. p. 4.
112
Ibid. p. 7.
113
Ibid.
114
Reyburn (11 March 2021a).
115
Ibid.
116
Castor (1 November 2021)”.
117
Ibid.
118
Ibid.
Dollar sums and the ZKM Centre for Art and Media Karlsruhe showed the cats as the
primary example of blockchain use to produce artistic collectibles.119 The
CryptoKitties popularised NFTS originating on the Ethereum blockchain as they
were the first collectibles that allowed collectors to spend ETH on breeding unique
digital cats.120
2.1.3.2 NFTs and the Art Market: Blockchain Technology as a Means

of Authentication?
One of the most sensational NFT sales to date is the representation of the Banksy
print Morons after the physical print was burned as part of a dramatic performance
art presentation on Twitter. “Burnt Banksy”, an anonymous group that could be
described as new performance artists, offered the blockchain-certified Morons NFT
on the platform Open Sea, where it was sold for about $382,000.121 While the event
was authenticated by Banksy’s agency Pest Control, the NFT sold for more than
three times the price the physical print would have made at auction.122 Usually, art
transactions are an entirely paper process (if at all, since it is not uncommon to
commit to deals only verbally). In addition, also the process of provenance research
is a manual exercise, with different procedures and lacks in historical records that
make errors and omissions inevitable. Only few artworks offer authenticity that is
backed by an unbroken chain of title.
On the primary market, artworks that are bought from a gallery or an artist
himself, are less concerned with issues of authenticity and forgery. However, this
is an important issue on the secondary market where artists may no longer be around
to authenticate artworks and experts and estates function as gatekeepers to safeguard
authenticity. Consequently, art market participants place high hopes in blockchain
and stress its many benefits in providing a permanent digital record of relevant
information about an artwork. This includes not only changes in ownership, but also
public exhibitions, sales at auction, and other transactions while at the same time
ensuring privacy and anonymity between buyers, sellers and the public. In theory, it
is therefore suggested that these developments help to diminish the likelihood of
forgeries and democratise access to fine art investment. In other words, the amount
of confidence in the art market in general could be amplified by these decentralised
provenance networks.123 An illustrative example was the sale of the Barney
119
Ibid. And Reichert (2021).
120
Benson (10 November 2021).
121
Castor (2021). The details of the transaction can be accessed here https://etherscan.io/tx/0x12
eac8d1a49a51ccdce111a58566d0c27dff77f3ac6521097185ef9585cc1fc2 and the smart contract
underlying the flash loan here https://etherscan.io/address/0x9b5a5c5800c91af9c965b3bf06ad2
9caa6d00f9b [last visited March 30 2022].
122
Wintermeyer (2021).
123
A. Ebsworth collection by Christie’s in 2018: it marked the first time that an auction
house registered a sale on Artory, a blockchain powered art registry.124 The sale of
the more than 85 lots in the auction was recorded via blockchain so that each buyer
received a registration card to access a secure encrypted record of information about
their purchased artwork on the Artory registry. On the other hand, a blockchain title
registry is only feasible for newly created artworks. Collecting and digitising
thousands of years’ worth of analogue data on existing artworks seems to be
impossible.125 Second, another challenge is related to the question of how the
blockchain can be kept physically connected to the artwork itself, as to avoid that
a verified digital chain of ownership is attached to an artwork which is forged or
misrepresented. Third, the practicability of blockchain registries will depend on the
number of people actually using it: if the majority of traditional collectors refuse to
pay a premium for pieces that are tracked in a title registry and if this database fails to
attract a significant number of new buyers to enter the market, the practicability of
the system will be limited.126
It is clear that by accepting cryptocurrency as a method of payment, the traditional
art market will be confronted by potential buyers with cryptocurrency holdings—a
group of new collectors, investors or speculators that has not been present before. In
this respect, it is no surprise that the buyers who acquired Beeple’s Everydays are
Crypto investors Vignesh Sundaresan and Anand Venkateswaran, who founded the
world’s largest fund for NFTs.127 Already before, Vignesh Sundaresan had bought
other works by Beeple which he divided into tokens and sold to investors.128
Apparently, Sundaresan had purchased 20 artworks by Beeple for $2.2 million in
December 2020. From these artworks, he created 10 million tokens, called B.20 of
which he made 25% available to the public and 2% were allocated to the artist
himself.129 As the bids for Everydays kept rising, so did the value of these tokens. It
is not uncommon and not against the law to buy, resell and thereby promote the work
of an (digital) artist. However, the financial interest of Sundaresan shows that “the
recent frenzy around digital art may be less a sign of an artistic revolution than a gold
rush into highly speculative blockchain technology.”130
124
Christie’s Press Release (11 October 2018).
125
Ibid.
126
Ibid.
127
Reyburn (12 March 2021b) and Kay (30 March 2021a).
128
De Vynck and MacMillan (18 March 2021).
129
Ibid.
130
Ibid.
2.1.3.3 Tokenisation of Art: Blockchain as a Means of Democratising

Art Investment?
Similarly, blockchain also plays an important role when it comes to the tokenisation
of art, the process of selling fractions of a respective artwork.131 In 2018, blockchain
platform and art investment startup Maecenas, together with Dadiani Syndicate, a
British gallery, sold a 31.5% ownership in Andy Warhol’s work 14 Small Electric
Chairs, to be paid in Bitcoin or Ethereum.132 In this case, the blockchain registry
also records the rights to fractional interests attached to the tokens. This is said to
make investment into art accessible to a much wider audience with the sale and
subsequent Wall Street-style trading being tracked on the blockchain.133 Maecenas
identified the traditional art market as “opaque with little to no price transparency, an
unregulated and inefficient market with no registrars and no standard investor pro-
tections” and stresses that an “open and fair blockchain marketplace [. . .] creates
transparency and liquidity – which allows trading volumes to achieve their full
potential”.134
To make the concept of a blockchain clearer, it can be compared to a
decentralised digital record-keeping device, a ledger—however, not all data is
automatically publicly viewable by default.135 In addition, the idea that a blockchain
registry can be read like an Excel spreadsheet is considered misleading because a
blockchain is not an easily readable table of transactions and accuracy can only be
checked at the level of code.136 This is illustrated by the transaction details
concerning the CryptoPunk above: to a layperson, the code listed on Etherscan
does not reveal much information. Traditionally, a ledger would be issued and
monitored by a central authority.137 In contrast to this, Blockchain focuses on a
decentralised and transparent approach as all transactions are announced to a net-
work of computers.138 While this does not automatically mean that a blockchain
system makes the data in it accurate or the people using it trustworthy, it guarantees
that the information contained in it cannot be tampered with.139 How is trust then
created?
It is argued that instead of auditing the software, people will rely on aspects of the
“old ways”, that is placing trust on a familiar counterparty or the reputation, integrity
131
Rusanova and Polyakova (7 December 2020).
132
The transaction value was USD 5.6 million.
133
Schneider (25 June 2018b).
134
Maecenas, Fine Art Investment, available at https://www.maecenas.co/fine-art-investment/ [last
visited March 30 2022].
135
Ibid.
136
Ibid.
137
Teng (2021).
138
Ibid.
139
Stinchcombe (April 5, 2018).
and credibility of the seller and institutions involved.140 But if these “old way”
aspects are absent, the user has to trust the software rather than a person or
institution.141 Applying these aspects to the sale of Warhol’s 14 Small Electric
Chairs, it presupposes that participants trust the authenticity of the artwork,
the legitimacy of ownership, the absence of liens or other ownership stakes and
that the software and certificate verifying the fractional share are enforceable off the
blockchain, in real life.142 According to Maecenas, artworks are carefully “curated
[by experts] for significance, quality and investment value, insured and held in
secure, purpose-built facilities to protect them from damage and theft”, while history
and provenance information is certified in a way that “can’t be forged or doc-
tored”.143 While pointing out the inefficiencies of the traditional art world, Maecenas
still seems to rely on established artworld institutions as well as art experts, who,
however, remain unidentified. Furthermore, it appears that already the very fact of
Maecenas being at the centre of these activities is at odds with their mission of
promoting decentralisation.
2.1.3.4 Outlook: Many Open Questions
For the time being, there are many open questions and regulatory gaps regarding
NFTs and the tokenisation of physical assets: among others, these concern the status
of the physical object after tokenisation, the taxation of the sale of fractional interests
as well as the payment of resale royalties for sales of tokens. As regards NFTs, many
participants might still be unaware of prevailing setups and corresponding questions.
Although NFTs are not yet specifically regulated, it is argued that issuers need to
demonstrate the non-fungibility of their NFTs, otherwise it may be considered a
security token or cryptocurrency, triggering national and supra-national legal obli-
gations and financial regulation.144
Because of the pseudonymous nature of NFT transactions, fraud, anti-money
laundering and other regulatory obligations such as “know your client” (KYC) and
associated record-keeping and monitoring duties arise as well.145 Due to the inher-
ently global nature of these digital assets, multi-jurisdictional consideration must be
given to the transactions. Unlike the traditional art market, there are no geographical
boundaries, transfer of ownership is immediate, and criminals could even self-
launder money by passing an NFT on to themselves on different digital accounts
140
Ibid.
141
Ibid.
142
Ibid.
143
See Maecenas website, available at https://www.maecenas.co/ [last visited March 30 2022].
144
Osborne Clarke (14 October 2021) What are the legal issues around NFTs? Available at https://
www.osborneclarke.com/insights/what-are-legal-issues-around-nfts.
145
Ibid. and McAndrew (2022), p. 33.
to create a record of sales on the blockchain, before selling it to a third party.146 It is

crucial that the rights which are attached to a NFT are clearly defined as these can
range from certifying ownership, a license to use intellectual property rights or even
contractual rights. The same holds true for the purchase of NFTs: if an NFT
incorporates smart contract functionality, purchaser due diligence is needed to
establish what rights and obligations are being acquired. These can take the form
of traditional legal terms which are accepted by the purchaser at the time of sale.
Even though they must be drafted in accordance with existing regulations and must
be enforceable, they are likely to pose practical challenges such as identifying
potentially anonymous perpetrators, solving disputes, and enforcing judgments
regarding transactions taking place in an international and decentralised environ-
ment.147 In April 2022, a UK court established that NFTs are recognised as property
which means that victims of NFT theft can now have their assets frozen through
court injunctions.148 In other words, victims can obtain court injunctions against
individuals whose crypto wallet is identified to be carrying their stolen NFT. The
judgment is important as hackers have repeatedly exploited loopholes and poor
security standards to seize high value NFTs.149 Until now, victims were left without
recourse in an unregulated and decentralised NFT market. Strikingly, this seemingly
straightforward application of the law has drawn criticism in the NFT world as
crypto leaders adhere to the ethos of decentralization and the “code is law” principle,
meaning that ownership belongs to whoever can prove that they hold an asset and
that neither governments nor NFT platforms should interfere with this principle.150
In fact, because of the decentralised nature of blockchains, the ruling might be
very difficult to enforce. Another potential dispute arises from the ownership of
intellectual property rights, highlighted by the attempted sale of the Basquiat NFT
Free Comb with a Pagoda, offered on OpenSea in April 2021 with “all related IP and
copyrights”, and then cancelled after the artist’s estate stipulated that these rights
were not up for sale.151 In this regard, the level of originality involved in the minting
of an NFT and the creativity involved in creating a physical artwork must also be
considered. In the same spirit, British curator Ben Moore was accused of creating
and selling NFTs of works by artists such as Anish Kapoor, Damien Hirst and David
Bailey without their consent.152 Working together with them for the charity project
Art Wars in 2013, Moore had applied their signature styles to Star Wars
Stormtrooper helmets that had been custom-painted, and later sold NFTs derived
from photographs of these originals on OpenSea.153 With about a dozen artists
146
Cassady (February 8, 2022).
147
Osborne Clarke (14 October 2021).
148
Escalante-de Mattei (April 29, 2022).
149
Chow (March 15, 2022).
150
Ibid.
151
Pryor (28 December 2021).
152
Escalante-de Mattei (2021b).
153
Kinsella (November 23, 2021a).
considering legal action, the case brings up the interesting question who owns the
right to images of artworks when it comes to minting NFTs. After receiving a
copyright infringement notice, OpenSea stopped the trading and took the Art Wars
NFT page down.154 The success of NFTs will eventually be dependent on several
factors: for instance, existing platforms have been massively criticised for their
environmental impact. The Ethereum blockchain is said to match the annual energy
burn of Ecuador.155 In addition, it is unclear if smart contracts might be enforceable
in an offline court of law. And even if they could, it is unclear how unalterable, but
erroneous blockchain records could be corrected. While the art market has always
been considered special (or even odd), it at least involved physical goods that
represented a cultural value and could hang on a wall. Stripping away this presence
and going fully digital means that transactions solely relate to tokens representing a
certain value or right and not to a physical artwork. Therefore, NFTs are said to
“rudely pull aside the curtain separating art and commerce, by focusing on com-
merce and ignoring all art.”156
It appears that it is too early to judge if NFTs will become a “vehicle for
generational progress in the art industry” or if it is a bubble that will eventually
burst.157 As it has always been, the price of any good is determined by what others
are willing to pay for it. Those of a bullish disposition argue that the future is digital
and that NFTs will inevitably come to play a bigger role. On the other hand, market
observers are not convinced and fear that intangible assets are not likely to remain as
valuable as physical works.158 While it can be argued that NFTs might kind of look
like conceptual artworks, even digital artist Mike Winkelmann—better known as
Beeple—believes that NFT prices could be in a precarious position: “there’s going to
be a moment where we realize we got a little crazy and assigned insane value to
crap”.159 Beeple reinvested the money made from his first sale into hiring engineers
to work on technology that could bring digital art into the physical world (vice versa
this time) and make it more accessible. And indeed, the result Human One (2021), a
generative work of art, which was offered in Christie’s twenty-first Century Evening
Sale on 9 November 2021 merges the realms of both digital and offline worlds.160
The work was sold for $25 million to Ryan Zurrer who revealed himself as the
winning bidder by posting a screenshot of his personal Christie’s Live account on
154
Ibid.
155
156
Frye (2021), p. 8.
157
Wintermeyer (2021).
158
Ibid.
159
Kay (22 March 2021b).
160
Davis N (Head of Digital Art at Christie’s) Beeple gets real, Interview with the artist. Available
at https://www.christies.com/features/Beeple-gets-real-with-human-one-11940-7.aspx last
accessed on 23 February 2022 [last visited March 30 2022].
Twitter.161 In essence a kinetic video sculpture, the box-like structure covered in

LED screens displays 24 hours’ worth of an endless video as well as a corresponding
dynamic NFT which is connected to a deed of ownership issued on the Ethereum
blockchain.162 The 3D life-size moving sculpture shows a person dressed in a
spacesuit walking through dystopian landscapes with a variety of extra-terrestrial
climates.163 Interestingly, the smart contract for the dynamic NFT is coded in a way
that allows Beeple remote control over updating the footage on the screens even after
the work has been sold. Consequently, the artist retains full control to alter the digital
content of the artwork and even to delete it, leaving merely its physical components.
Schmedders and Reinmoeller compare the market for NFTs with the Dutch tulip
mania from 1634 to 1637 and argue that the market will eventually crash because of
financial exuberance, unpremeditated buying behavior and spurious hype.164 While
there are many concerns associated with NFTs, such as the massive energy con-
sumption, the authors state that the major problem is indeed something else: namely
the fact that there is a sheer unlimited offer. NFTs enable the claim of ownership over
a digital asset; however, they do not prevent others from using digital copies of this
asset. Most importantly, there is no visual difference at all between an original
JPG-file that sells for $69.3 million and a copy that can be freely downloaded and
saved.
Therefore, the amount of NFT copies is unlimited, which might negatively
influence demand and prices. In addition, the blockchain does not register the digital
asset itself but merely a link to it. This provides the owner with copyright, but the
efforts and costs associated with determining a violation thereof, make it almost
impossible to investigate violations. Another risk is that NFTs are based on new
technologies with varying standards for the creation, protection, distribution, and
certification of NFTs and the resulting uncertainty how the certification of ownership
will be permanently safeguarded endangers the value of such digital assets and even
the concept of their ownership. If new technologies are developed that replace the
current standards of blockchain and crypto currencies, the current values of NFTs are
at stake. In addition, there are also very practical problems evolving, for instance the
fact that NFTs can very easily get lost. The ZKM Museum (Karlsruher Zentrum für
Kunst und Medien) lost access to two CryptoPunks valued at 400.000 Euro by copy
and pasting a wrong wallet address in a transaction.165 The NFTs were supposed to
be transferred to a wallet but ended up being transferred to a smart contract address
for which there is no key. This means that while the ZKM is still registered as the last
161
R. Zurrer, Tweet from November 10, 2021, available at https://twitter.com/kukulabanze/
status/1458236032818819075 last accessed on 23 February 2022 [last visited March 30 2022].
According to his Twitter profile @kukulabanze, Zurrer is the founder of Dialectic and Vine
Ventures, exploring emerging industries, geographies & alternative assets in the new world order.
162
Escalante-de Mattei (28 October 2021a) and Benson (2021).
163
Sharma (November 10, 2021).
164
Schmedders and Reinmoeller (28 January 2022).
165
Völzke (February 3, 2022) and Batycka (21 January 2022).
2.2 Major Players in the Art Market 45
owner of the NFTs and can also exhibit them, they cannot dispose of them as they are
locked in an inaccessible vault. This follows the concept that ownership of any
cryptoasset is vested in the person who has the private key corresponding to the
address with which the token is associated. If such a key is lost, it cannot be reset.166
Seen another way, the museum states that it was not supposed to sell the NFTs
anyway and now has them stored forever, verifiably inaccessible.167 A final issue is
that art usually gives a certain prestige to its owners: but as the possession of a NFT
does not hinder others to show the possession of the same assets, these tokens cannot
serve as indications of a person’s buying power. With the precarious global situation
in 2022 and the highest level of inflation since decades, it is argued that this is not a
good time anymore for new asset classes and certainly not for a highly volatile NFT
market based on unsecured digital currencies becoming mainstream. However, the
art market will be likely to just wait for guidance and clarity on ways of doing further
business with NFTs. Continuing with its traditional business structure, which has
undergone some adjustment during the COVID-19 pandemic, the art market and its
participants can wait and see if and how NFTs and fractionalised investments will
influence its framework.
2.2 Major Players in the Art Market
The major players involved in the sales and the general operation of the art market
are auction houses, commercial galleries, museums, experts, collectors and recently
also art advisors and wealth managers. It is important to take the major behavioural
differences between these actors into account, for instance between private collec-
tors, investors and professional dealers and accordingly, each group earns different
types of returns from acting on the art market, of which financial return is only
one.168 In general, there are an estimated 310,450 businesses operating in the global
arts and antiques market, including 294,315 in the gallery sector and 14,135 auction
houses.169
Roughly one-half of the market is dominated by auction houses and the other half
by a myriad of art dealers. These in turn subscribe to different ethical standards,
in-house rules, and guidelines. However, this unilateral approach means that if one
house or dealer refuses to engage in a transaction for whatever reason, another
competitor, who feels committed to different business standards, can step in.170
Given the complexity and quantity of the different market participants, it is neces-
sary to limit the groups being discussed. Because of the chosen focus and since the
166
Ibid.
167
Ibid.
168
169
McAndrew (2018), p. 17.
170
overall market is shared between the two, auction houses and dealers will be at the
centre of the discussion, while the role of museums is only briefly included in the
discussion.171 But before beginning this discussion, a brief overview is given of
developments in collecting and the emerging position of art advisors.
2.2.1 Collectors
It is argued that the classical connoisseur, who once dominated the art world, has
been supplemented with a variety of people—speculators, fashion seekers and
aficionados for instance—who see collecting art as part of their social and financial
agenda.172 This development is due to changes in the global economy at large, with
more money from all over the world pouring into the art market and newly rich
players from emerging market economies becoming important collectors and par-
ticipants in a truly global market.
As a result, audiences in the salerooms and clients at galleries and art fairs have
never been that international before: influential collectors have well passed the
conventional Euro-American axis, causing auction houses and galleries to extend
their sales locations and gallery spaces well beyond their traditional marketplaces;
with Sotheby’s starting sales in Hong Kong as early as 1973.173 Back in 2008,
buyers who spent $500,000 or more at auction came from 58 countries, a number
which is very likely to have accelerated over the past years, especially with online
bidding becoming more popular and making international bidding even easier to
conduct.174 And indeed, it is suggested that the “serious cash” comes in via the
Internet or phones, indicating that bidders are international clients who want to
remain anonymous.175 In line with this development, high-end works of art are
increasingly acquired by collectors from the Gulf region, the former Soviet republics
and China.176 In 2012, Qatar’s ruling family Al-Thani acquired Paul Cézanne’s The
Card Players for more than $250 million via a private treaty sale, thereby buying
their ticket of admission to an exclusive club, since the four other paintings in the
series are in the collections of the Metropolitan Museum of Art, the Musée d’Orsay,
171
Towse (2011), p. 37.
172
173
Ibid. pp. 8 and 10.
174
In 2016, almost all auction houses offered online bidding, making their auctions available to their
clients worldwide. Additionally, also platforms such as Invaluable, Liveauctioneers or Lottissimo
offer a variety of live auctions, also from smaller, regional auction houses.
175
The Economist (4 April 2015).
176
Artprice, The Art Market in 2012, p. 5. However, one should take the globalisation of the art
market with a grain of salt, and it is important to keep in mind that Western collectors mainly
purchase Western art and that especially Chinese collectors are more inclined to acquire traditional
Chinese artworks which correspond to their cultural parameters.
the Courtauld and the Barnes Foundation.177 In addition, also commercial galleries
have acknowledged this development and reacted by spreading their branches into
new territories, thereby leveraging their brand identity to new places and accessing a
broader and growing client base. The prime example is the contemporary art gallery
Gagosian, with its multiple branches in New York, London, Hong Kong, Paris,
Geneva, Rome, Beverly Hills and Athens.178 Moreover, the upsurge of international
art fairs is seen as yet another illustration of the art world’s globalisation.179
The most important fairs such as Art Basel, Art Basel Miami Beach, Art Basel
Hong Kong, New York’s Armory Show, Frieze Art Fair and Masterpieces in
London, TEFAF Maastricht and New York, Art Cologne, SH Shanghai, and Art
Dubai have by now well expanded beyond their Western bases into Asian and Arab
markets.180 According to art critic Robert Hughes, dealers and collectors who buy
from motives of “informed love rather than herd instinct, who really can and really
do think and look, are rare” and the majority of collectors follow what others,
preferably branded dealers, are selling.181 This led Hughes to characterise the
modern market in contemporary art as one of “uniformity of taste and [with] an
insecure obsession with mutually recognizable signs of status”.182 The concept of
branding is therefore not confined to dealers or auction houses, but also collectors
can be capable of acquiring such status. Accordingly, Charles Saatchi came to be
regarded as the modern branded collector of contemporary art since prices of artists
and their work displayed at Saatchi Gallery or otherwise collected by Saatchi
generally escalate when other collectors rely on his choices and follow suit.183
2.2.2 Art Advisors and Wealth Managers
In recent years, the global wealth management industry has started to increasingly
view art as an asset class. As a consequence of the convergence of the art and finance
worlds, institutions such as BNP Paribas, Citi Private Bank and Deutsche Bank and a
number of private advisors started to include strategic art advisory services in their
portfolios.184 This, in turn, caused a new profession to emerge: art advisors and
consultants who pick out paintings for their clients based not only on aesthetic and
curatorial considerations, but also on potential return rates.185 Clients in this new
177
Peers (February 2, 2012).
178
Hollein (1999), p. 108; King (2006), p. 75; and Adam (2014), p. 14.
179
Horowitz (2011), p. 15.
180
See McAndrew (2018), pp. 185ff.
181
Hughes (1992), p. 402.
182
Ibid. p. 403.
183
Thompson (2012), p. 93.
184
Deloitte | Art Tactic (2016), pp. 9 and p. 11.
185
The Economist (4 April 2015) and Adam (2014), pp. 81f.
profession range from private banks, hedge funds, galleries and individual collectors
to the public sector, and museums, art secured lenders, art funds and other art-related
businesses are all advised on strategy and operations, gift and estate planning, tax,
including import and export strategies as well as fraud and investigations.186 Since
collectors and those investing in art are looking for services that are linked to their
collection or their investment’s management and preservation, wealth managers take
advantage of these complex demands that require connections between already
existing services and non-traditional assets such as art.187 New initiatives, including
Professional Advisors to the International Art Market (PAIAM),188 the Art Law &
Finance Association in Luxembourg and Art Advisory Services, Inc., continue to
build closer relationships between art professionals and the wealth management
community in order to further develop the art and finance market.189
2.2.3 Auction Houses: Guarantees and Third-Party

Arrangements
Traditionally, auction houses deal in the secondary art market and are concerned
with the re-sale and marketing of artworks that have already been traded on the
market.190 Simply put, auction houses have existed since the eighteenth century for
the quick disposal of a wide variety of cultural goods. However, in today’s art
market, they also provide an outlet for market valuation that makes speculation
possible.191 The rise of the auction house business—which is estimated at making up
for about 50% of the global art trade—has been much remarked upon, but the
continuing series of record-breaking sales keeps auction houses in the headlines
and reassures their clients. Ever since a market evolved around art, the system of
auctions has significantly determined the distribution as well as the external percep-
tion of this market.192 In addition, the auction world has recently witnessed a
dynamic development due to technological advancements, which facilitated the
participation of international clients both in live and in online sale.193 For centuries,
186
Deloitte | Art Tactic (2016), p. 12.
187
Ibid.
188
For more information see http://www.paiam.org/.
189
190
An exception to the practice that auction houses usually deal in the secondary market was the
Damien Hirst sale Beautiful Inside My Head Forever in September 2008. 244 new works, which
had never been on the market before, were directly consigned to and sold at Sotheby’s London,
bypassing all gallery involvement.
191
Zarobell (2017), p. 16. For an extensive discussion of the use of specific auction house terms see
Proffitt (2004).
192
Boll (2014) in Hausmann (ed) (2014), p. 177.
193
Ibid.
auctions have been a “theatrical” way to sell art, but it is argued that with the recent
proliferation of high-value guarantees at Sotheby’s and Christie’s flagship sales, they
have evolved into a spectacle that even experienced audience members can struggle
to understand.194
Initially, auctions were only an intermediary trade and served as the most
important source of supply for art dealers. But, a change of strategy occurred in
the 1980s: realising that in a market of limited supply, higher turnover could only be
achieved by a higher demand and by a corresponding increase in prices, auction
houses started to attract end-consumers who, unlike art dealers, are not affected by
the necessity to purchase a work at a fair market value in order to ensure a profitable
resale.195 As a consequence, auction houses changed from wholesale to retail, thus
entering into cutthroat competition with art dealers and commercial galleries.196
Since auction houses assume such a prominent function in the art trade, it is
important to have a closer look at some of their defining characteristics. Of primary
concern is the legal role which the respective auction house assumes in a sale and if
the goods sold are owned by the respective auction house or consignors. For
instance, German auction houses can act as agents on behalf of the consignors
(Stellvertreter according to §§164ff. BGB) or as commission agents (Kommissionär
or mittelbare Stellvertretung, §383 HGB). In most cases, an auction house will act as
Kommissionär.197
In the latter case, the contractual relationship is principally between the auction
house and the consignor, and the buyer would need to enforce any claims directly
against the auction house. In the United States, the law of agency defines the
relationship between an auctioneer and the consignor and stipulates that, as the
agent to the consignor, the auctioneer has a fiduciary duty to act in the utmost good
faith and in the interest of the consignor.198 In New York City, for instance, the hub
for auction business, an auctioneer is required to obtain a licence in order to sell
merchandise at public auction.199 Other than that, there are no formal requirements
194
Reyburn (September 25, 2015).
195
Boll (2014) in Hausmann (ed) (2014), p. 178. The number of bidders who actively take part in
auctions has increased 20-fold in the last 30 years.
196
Ibid.
197
Braunfels (1994), pp. 57ff and Demarsin (2008a) Proefschrift, pp. 609 and 614. See also
Demarsin (2008b) Expertise, veiling en certificaten in de kunsthandel, pp. 118 and 123. Similarly,
also the French and the Belgian system follow the approach that the auctioneer acts as commis-
sionaire on behalf of the consignor.
198
Adler (2003), p. 435 and Demarsin (2008a) Proefschrift, p. 607. See also Demarsin (2008b)
Expertise, veiling en certificaten in de kunsthandel, p. 115. In this case, the relationship is
characterised as a disclosed agency, since it is known that the auction house represents its
consignors. Among others, the auctioneer’s ultimate duty is to obtain the best price for the
consignor. See Pitchfork Ranch Co. v. Bar TL, 615 P.2d 541 (Wy).
199
N.Y. New York City Administrative Code §20-278.
imposed.200 On the other hand, the French auctioneering system had historically
been strictly controlled by the state, with the auctioneer traditionally being a State
official, a “commissaire priseur”.201 However, in 2000, a new law abolished the
monopoly of the State agents as this qualification was no longer made a condition for
conducting a public auction: Loi no 2000-642 of 10 July 2000 eventually brought the
French system in line with the European free movement of goods and services.202
Previously, the French profession was subject to fixed entry barriers and compe-
tence requirements as it was understood that an auctioneer was an arbitrator between
the buyer and the seller, who, in a regulated manner, was supposed to bring all the
relevant information and appraisals to the market before a sale took place.203 In
contrast, Anglo-US legislation and authorities historically viewed the auction busi-
ness merely as a profitable part of the wider economy and imposed no particular
entry barriers.204 Similarly, also the United States subjects auctioneers to certifica-
tion, or just registration, with entry barriers being only social or formed within the
profession. While this lower regulation has allowed auctioneers to develop more
competitive strategies and to increase their international market share, it has also
contributed to the presence of speculation and bias.205 Most importantly, some
practices only recently allowed in France are precisely the ones that favour specu-
lation and add to the opaqueness of the art market.206 These include chandelier
200
Nevertheless, criminal records are regularly checked, and a positive finding may lead to the
withdrawal of the license. Demarsin (2008a), p. 598. See also Demarsin (2008b) Expertise, veiling
en certificaten in de kunsthandel, p. 104.
201
Herzog and Weser (1967), p. 109.
Therefore, French auctioneers were members of a regulated organisation and under supervision
of the French courts. The monopoly was established in 1556 by a royal edict by King Henry II and
eventually stayed in place for more than 400 years. See Elisabetta Lazzaro and Nathalie Moureau,
Auctioneers v. Commisairs-priseurs: the carnival mirror of profession regulation in the international
art market, European Journal of Comparative Economics, 10, 2, 159–176, (2013), p. 159; Demarsin
(2008a) Proefschrift, p. 591; Demarsin (2008b) Expertise, veiling en certificaten in de kunsthandel,
p. 95; and Mauger-Vielpeau (2008), pp. 81–86.
202
Flynn (2016). See also Riefa (2016), p. 57; Demarsin (2008a) Proefschrift, p. 593; and Demarsin
(2008b) Expertise, veiling en certificaten in de kunsthandel, p. 98.
203
Lazzaro and Moureau (2013), p. 160. Entry barriers were socio-economic, educational, and
geographical. Interestingly, licence conditions included not only French nationality and a minimum
age of 25, but also a certain level of morality (being married for a long time and being a good father).
However, the most restrictive condition was the purchase of the office for a high price and as a
result, it was often passed on through generations of the same family. Yet, in 2009, a scandal that
came to be known as “cols rouges” came to light and revealed that even strict regulation could not
prevent fraudulent activity: auction porters at Druout had stolen a great amount of valuable furniture
and subsequently sold it at Druout again, with several auctioneers and experts being aware of this.
204
Ibid.; Demarsin (2008a) Proefschrift, p. 590; and Demarsin (2008b) Expertise, veiling en
certificaten in de kunsthandel, p. 95.
205
Klemperer (2002).
206
Demarsin (2008a) Proefschrift, p. 597 and Demarsin (2008b) Expertise, veiling en certificaten in
de kunsthandel, p. 104.
bidding,207 (third-party) guarantees208 and private treaty sales. Chandelier bids are
non-existent bids which the auctioneer makes on behalf of the consignor and calls
out to create the impression of greater demand and to exceed the undisclosed
reserve.209
In other words, the auctioneer picks bids “off the chandelier” and for the
audience, it is difficult if not impossible to judge whether the bids are real or just
“chandelier” bids. If an artwork is guaranteed, either by an external third party or by
the auction house itself, it means that the guaranteed price will be paid out to the
consignor, irrespective of how much the object sells for. If the work sells for less
than the guaranteed price, the auction house must fund the difference between the
auction sales price and the amount of the auction guarantee. Usually, such guaran-
tees are granted to secure consignments of specific objects. This means that, in a
competitive environment, guarantees are used to secure the most sought after and
coveted consignments. Looking at the developments in the past years, in November
2013, 22 out of Christie’s 69 lots offered for sale at the Post-War and Contemporary
Art Sale were secured by guarantees given either by Christie’s or by third parties and
more recently, 69% of the lots in its May 2015 Looking Forward to the Past sale
were also guaranteed to sell, either by Christie’s, by third parties or by a combination
of both.210 Out of the 85 lots offered for sale, 50 were marked in the catalogue as
guaranteed and of these, 36 had in-house guarantees, meaning that Christie’s
promised the vendor an undisclosed amount for his work, irrespective of whether
the lot sold or not, while the remaining 14 lots were backed by an external party
(third-party guarantee).211 However, there was also a third category of guarantee
being used: Christie’s disclosed that five of these guaranteed works were not subject
to a third-party financing arrangement, even though Christie’s did offset part of the
risk it had taken.212 While this statement seems to be contradictory at first, it can be
explained by the fact that Christie’s distinguishes third-party guarantors from third-
party partners. The latter are parties who take a stake in a Christie’s in-house
guarantee, but their involvement is only revealed if they also intend to bid—
otherwise, the arrangement remains undisclosed, even though the third party
207
For more information see Grant (September 4, 2007) and Day (2014), pp. 137f.
208
Adler (2003), p. 443.
209
Grant (September 4, 2007).
210
Adam (15 November 2013) and Pogrebin and Reyburn (2015).
The same development is confirmed by Sotheby’s, which in contrast to Christie’s is not privately
owned, and publishes Annual Reports. In its Annual Report for 2015 it is affirmed that because of
the expansion of the global art market and increased competition with Christie’s, auction commis-
sion margins declined and that the “competitive environment for high-value consignments” had
caused an “increase in the use of auction commission sharing arrangements and an increase in the
use of auction guarantees, sometimes without the protection of irrevocable bids”. See the Annual
Report 2015, p. 20.
211
This means that Christie’s arranges for a financing fee with a third party for taking the risk as
well as a percentage of any sum realised above the guaranteed amount. See Burns (7 July 2015).
212
Ibid.
would end up co-owning the work if it fails to sell.213 According to Christie’s, the
New York City Legal Code requires the auction house to notify the public if it has
guaranteed a lot, but as far as third parties are concerned, the Code only imposes
notification obligations where these parties are actually bidding.214 But the
November 2015 auction sales season suggests that Christie’s has started to take a
more careful approach to financial guarantees with the number of guaranteed lots
decreasing from 51.4% of the total number of lots in May 2015 to 26% in November
2015. Nevertheless, guarantees are likely to continue to play an important role in
attracting the best consignments.215
In spring 2018, the Contemporary Art sales total in London achieved the highest
result recorded so far—a combined total of £243.7 million, excluding buyer’s
premium, and a key factor was again the increased number of guarantees which
the auction houses were willing to offer.216 At Sotheby’s, more than half of the lots
were guaranteed, with a guaranteed low estimate total of £67.2 million or 84.3% of
the whole sale combined.217 Only eight of the 25 guaranteed lots sold at or below the
low estimate, indicating that they sold to their guarantor and overall, the number of
guarantees also contributed to the high sell-through rate, with only one lot remaining
unsold.218 The existence of such guarantees is said to date back to the early twentieth
century, but the volume and extent of their use has fallen in and out of favour over
the past decades, corresponding to the swings of the market.219 After the oil crisis in
the 1970s, guarantees disappeared from auctions until the 1980s, when the Japanese
entering the art market led to a renewed use of guarantees.220 It is therefore argued
that guarantees are frequently used during bubbles,221 as was the case in the 1980s
and likewise, also in 2007, when Sotheby’s issued double the number of guarantees
than in the previous year, namely $902 million.222 According to Noah Horowitz,
213
Ibid. In these cases, the external investors are not mentioned in the sale catalogue. Instead, the
lots are described as works in which only the auction house “has a direct financial interest”.
214
Ibid.
215
Deloitte | Art Tactic (2016).
216
However, the presence of many guarantees is not a guarantee for success. In Sotheby’s
Impressionist and Modern Art evening sale in June 2018, 14 of 36 lots were guaranteed (amounting
to 75 percent of the entire pre-sale estimate) and the sale brought only £87.5 million, the lowest total
for an evening sale in this category since 2012. Three of the works that had been guaranteed by
Sotheby’s failed to sell and left the auction house with some additional stock. See Gleadell (June
19, 2018).
217
Gleadell (June 26, 2018).
218
Ibid.
219
Adam and Burns (2 March 2001) and Horowitz (2011), p. 1.
220
Ibid.
221
A speculative bubble is “an unsustainable increase in prices brought on by investors’ buying
behaviour rather than by genuine, fundamental information about value. Bubbles are thus social in
nature and driven by the irrationality of investors who push prices beyond a sustainable level.”
Definition in Shiller (2000), p. 5.
222
Sotheby’s, Annual Report 2008, p. 25. In 2008, after the burst of the bubble, this number
decreased to $626 million, while it had previously risen from $131 million in 2005.
who published on the deflation of the contemporary art bubble in 2008, “these
numbers underscore how the art market had been artificially propped up during
the bubble by the generous financial arrangements orchestrated between the auc-
tioneers and their marquee clients”.223
According to Robert Shiller, Professor of Economics at Yale University, the most
important aspect in understanding those bubbles is the “social contagion of boom
thinking, the new era stories that appear to justify the belief that the boom will
continue”.224 This evaluation is very reminiscent of the voices that came up after the
November 2013 Contemporary Art Sales, proclaiming such a new era of the art
market and lasted until 2014 and 2015, which with their record turnovers and auction
results confirmed their accuracy.225 It cannot be said, however, that the art market
once again turned into an inflated speculated bubble; the decrease in turnover and
number of transactions started rather slowly at the end of 2016 and adjusted the
market to more reasonable and realistic figures.226 As regards the structure of
guarantees, not only auction houses are involved in this practice, but third-party
guarantors are also entering the scene in order to make a profit on the works they
guarantee, thereby limiting auction houses’ risk exposure.227 More precisely, auc-
tion houses are offsetting risks and reducing their financial exposure under auction
guarantees through contractual risk-sharing with counterparties who agree to bid a
predetermined price on the guaranteed work (irrevocable bids).228 Sotheby’s, for
instance, provides that it “may reduce its financial exposure under auction
guaranteed through contractual risk and reward sharing arrangements”. Such auction
guarantee risk and reward sharing arrangements include irrevocable bids and partner
sharing arrangements. An irrevocable bid is an arrangement under which a counter-
party commits to bid a predetermined price on the guaranteed property. If the
irrevocable bid is the winning bid, the counterparty purchases the property at the
predetermined price. If the irrevocable bid is not the winning bid, the counterparty is
generally entitled to receive a share of the auction commission earned on the sale
and/or a share of any overage. In a partner sharing arrangement, a counterparty
commits to fund: (i) a share of the difference between the sale price at auction and the
amount of the auction guarantee if the property sells for less than the minimum
223
Horowitz (2011), p. 194.
224
Shiller (2008), p. 41.
225
Goldberg (November 19, 2015) and Friedman (June 23, 2015). According to Friedman, today’s
art market continues to achieve new highs without a sound footing that would support $100 million
plus price tags and hence, is prone to result in an artificial and unsustainable bubble.
226
Deloitte | ArtTactic (2016), p. 10 and Kinsella (March 9, 2016a).
227
Sotheby’s, Annual Report 2015, pp. 11 and 45. Also auction houses acknowledge that “the art
market is not a highly liquid trading market, and that the valuation of art is inherently subjective.
[Therefore,] Sotheby’s is at risk with respect to management’s ability to estimate the likely selling
prices of works of art offered with auction guarantees.” And indeed, the net loss from Sotheby’s
auction guarantees increased by $13.3 million in 2014 principally due to losses incurred on certain
guaranteed property offered at auction during 2014.
228
Ibid. p. 4.
guaranteed price, or (ii) a share of the minimum guaranteed price if the property does
not sell while taking ownership of a proportionate share of the unsold property.229 In
exchange for accepting a share of the financial exposure under the auction guarantee,
the counterparty in a partner sharing arrangement is generally entitled to receive a
share of the auction commission earned if the property sells and/or a share of any
profit. The names of these third-party guarantors remain confidential and their
existence as well as the fees which they charge is a well-guarded secret.230 If such
an irrevocable bid is the winning bid, then the counterparty acquires the work at the
predetermined price plus the applicable buyer’s premium, i.e. plus the same addi-
tional amount that every other successful bidder would pay as well.231
On the other hand, if the irrevocable bid is overbid, the counterparty is entitled to
receive a share of the additional amount that was bid and of the auction commission
earned on the respective sale.232 Taking Sotheby’s as example, the financial risk
assumed under auction guarantees was until 2009 borne solely by the auction house
itself.233 However, since 2009, Sotheby’s would only enter into auction guarantees
when it was ensured that the financial risk exposure was limited through irrevocable
bid arrangements.234 This practice has since then changed again, with Sotheby’s
most recent Annual Report 2015 stating that the auction house “may also enter into
auction guarantees without securing such arrangements”.235 While such routines
incite questions about the manipulability of the art market, they also disclose the
fierce competition for high-value consignments that auction houses face in today’s
market.236 Critics claim that the current system of guarantees is vulnerable to
manipulation because third parties, who have an interest in keeping a particular
artist’s market up, are able to both back and bid up prices.237 After all, a guarantor
still earns a share of the commission if he guarantees a price which is below what he
knows another bidder will be prepared to pay. While this blurs the validity of prices
229
Ibid.
230
Ibid. According to Sotheby’s, the counterparties to these auction guarantee risk and reward
sharing arrangements are generally major international art dealers or major art collectors.
231
Ibid.
232
Ibid. If a third party guarantees for instance $10 million and the work fetches $12 million, the
third party receives a share of up to 30–50% of the additional $2 million.
233
Sotheby’s, Annual Report 2012, p. 85.
234
Ibid. This change in strategy was, however, not absolute as Sotheby’s expressly stated that
“management may not always be able to secure irrevocable bids on terms that are acceptable to
Sotheby’s and in some limited instances may not choose to seek an irrevocable bid.” [Emphasis
added]
235
Sotheby’s, Annual Report 2015, p. 4. It is expressly acknowledged that “Sotheby’s could be
exposed to auction guarantee losses and/ or deterioration in auction commission margins if the
underlying property fails to sell at the minimum guaranteed price. Furthermore, in such situations,
Sotheby’s liquidity could be reduced.”
236
As Sotheby’s confirms in its Annual Report 2015, p. 5: “Competition in the global art market is
intense and a fundamental challenge facing any auctioneer or art dealer is to obtain high quality and
valuable property for sale as either agent or as principal.”
237
Adam and Burns (2001).
achieved, it might also lead to the suspicion that the auction house devotes more
effort to the marketing of a lot on which it bears a financial risk, at the expense of
other consignors whose works are not guaranteed.238 If this were indeed the case, the
auction house would breach its fiduciary duty to the seller by favouring a guaranteed
work over one which is not guaranteed. This problem is of a structural nature and is
inevitable to arise as soon as auction houses give a guarantee.239 However, other
opinions about guarantees differ widely as some argue that guarantees are just a
creative way of doing business, while others claim that such practices would be at the
limit of legality in more regulated sectors.240
Another situation that evokes the same suspicion is when an auction house
already owns an artwork which it subsequently auctions, either because it was
guaranteed and failed to sell, because it was consigned as a means of payment or
because a successful bidder failed to pay for it. It is not an unusual scenario that
auction houses eventually end up owning previously guaranteed works: taking the
example of Sotheby’s, the auction house had outstanding guarantees of about $59.7
million on 24 February 2016 and offered the works related to these guarantees in the
second and third quarters of 2016.241 Similarly, by offering these financial services,
auction houses have an even stronger interest in the result of their sales and hence, it
becomes more difficult to maintain the neutrality necessary to serve both buyers’ and
sellers’ interests. As early as in 1991, the New York State Committee questioned
these practices and held hearings on how to make established business practices
more transparent. Proposed legislation included the requirement to have auction
houses disclose their reserve prices as well as the prohibition of chandelier bidding
and the granting of guarantees and loans to prospective purchasers. But the bills were
never enacted, leaving the art market and especially auction house practices as
unregulated as ever.242 In the same spirit, John Flanagan, Republican state senator
from New York, proposed a law in June 2007 which was specifically aimed at
eradicating chandelier bidding at auctions and to force auction houses to disclose
reserves and guarantees.243 The legislation envisaged an amendment to the state’s
General Business Law in order to “prohibit acceptance of sham or chandelier bids by
auctioneers without disclosure to actual bidders”.244 However, no vote was sched-
uled on the bill and as a result, the suggested amendment shared the destiny of its
predecessors. Under a New York City Department of Consumer Affairs law, the
238
Thompson (2012), p. 153.
239
240
Ibid.
241
242
Thompson (2012), p. 158.
243
Grant (2007).
244
Ibid. The bill states that “whenever an auctioneer or auction house accepts a bid that is made for
the account of the auctioneer or auction house, the auctioneer or auction house shall announce
acceptance of such bid with the term ‘auction house bid’”.
auctioneer is allowed to bid up the price at auction to the reserve price245 on behalf of
the seller provided that this is disclosed to other bidders both in the auction catalogue
and in the salesroom.246 The bills were criticised because it was feared that auction
houses would be forced to disclose the reserve price, and once it is known at what
point the consignor would be willing to sell his property, bidders would be reluctant
to raise bids beyond this amount.247 At last the issue of chandelier bidding is as much
a debate as is the practice of granting guarantees and these are only two issues that
illustrate why regulation of the art market in general and auction houses in particular
is often advocated.
2.2.4 Galleries
Besides auction houses, commercial galleries play a major role in the operation of
the art market. Contemporary galleries not only establish relationships with artists
and thereby function as the main supplier and distributor of art but are also consid-
ered to be tastemakers who determine which artist and style is popular and, ulti-
mately, how prices are set. This is due to the fact that there is no standard formula for
determining the value of artworks, especially not in the contemporary art market.248
It is therefore exceptionally difficult to determine which artists will have lasting
significance, both on a cultural as well as on an economic level, and this is what
gives prominent dealers such as Larry Gagosian great power to influence and even
set the markets for the artists they represent.249
This has led scholars to argue that the market for contemporary art is actually
controlled at this commercial player level: dealers are responsible for selecting the
artist and the work which they display, and while doing so decide which art enters
the market.250 After that, museums and critics validate the commercial sector’s
judgements and over time, cutting-edge contemporary art will transform into modern
and Old Master works of the future.251 Regardless of whether one accepts the
primacy of dealers as tastemakers or not, what remains essential and hard to deny
245
The reserve price is the minimum amount for which the consignor is willing to sell. If bidding
fails to reach this amount, then the work is ‘bought in’. For more information see Sotheby’s, Buy
& Sell: Auctions.
246
Sotheby’s Terms of Sale, for instance provide that “the auctioneer may open the bidding on any
lot by placing a bid on behalf of the seller. The auctioneer may further bid on behalf of the seller, up
to the amount of the reserve, by placing consecutive or responsive bids for a lot”.
247
248
Crow (April 1, 2011).
249
Ibid. According to Dallas-based collector Howard Rachofsky, “Sometimes we don’t know if the
stuff we’re buying is historically significant, but because the prices are so high, we need to believe
they’re important”.
250
Robertson (2005), p. 22.
251
Thompson (2012), p. 196.
is the fact that if a collector acquires an artwork from a gallery, he not only purchases
the work itself, but at the same time also buys into the dealer’s reputation, his taste
and his understanding of the market as well as into the artist. Another peculiarity of
the twenty-first century art market is that the concept of branding has gained
unprecedented importance. For the contemporary art market, it is claimed that
branding can even substitute for critical judgement, as it is the dealer’s valuation
and assessment of an artwork that conveys branding and thereby adds value to an
artwork.252 The development that dealers are capable of exerting influence on taste
and that their branding can even influence art’s value dates back to Georgian
times.253 Before that, dealers were seen as serving the already existing taste of
their patrons, instead of shaping it.254 Branding can come in various forms; it can
derive from an artwork’s inclusion in a major evening auction at Christie’s or
Sotheby’s or from it being acquired from a prestigious gallery, such as Gagosian
or White Cube. In contrast, the number of dealers who are capable of value creation
is limited and hence, leads to accusations of price manipulation as there is a fine line
between managing and manipulating an artist’s market.255 Velthuis argues that
dealers are de facto controlling the primary art market, not only regarding the supply
of artworks but also in deciding who may eventually purchase a work from their
galleries:
in their attempt to limit the possibility of future resale and investment potential of an artwork,
dealers restrict rather than enhance the liquidity of artworks: they construct moral and even
semi-legal boundaries between the auction and the Avantgarde circuit to prevent arbitrage
from taking place. . .This behaviour of dealers may be irrational from a narrow economic
point of view, but it makes sense when one takes into account that their goal is to promote
artists, and safeguard the long-run stability of prices.256
Joseph Duveen is seen as the prototype for today’s branded dealer because he is said
to have understood his clients’ desire for social acceptance and succeeded in selling
this status together with the art.257 Leo Castelli was Duveen’s mid-twentieth century
heir and likewise, became the most influential dealer in contemporary art during his
lifetime.258 Their success was based on the implicit trust connected to their galleries,
the confidence which assured collectors never to question the artwork on display or
252
Adam (2014), p. 15. In this respect, Larry Gagosian is considered to have turned his galleries as
well as the artists he represents into “brands” that are recognised all over the world.
253
Hughes (1992), p. 387.
254
Ibid.
255
Gerlis (2014), pp. 138 and 140.
256
Velthuis (2003), pp. 79–80.
257
Thompson (2012), p. 32. For a list of 500 masterpieces sold by Duveen see Behrman (1952),
pp. 211ff; and Secrest (2004), pp. 405ff. Joseph Duveen understood how to market art and, in his
opinion, “when you pay high for the priceless, you acquire it cheaply.” However, it is argued that
the art market has never seen anything with the scope, size and influence of today’s mega-dealers.
See Adam (2014), p. 17.
258
Ibid. p. 34. For more information see Cohen-Solal (2010).
its price.259 In present times, Larry Gagosian is seen as their successor and his
gallery network is considered to confer similar trust and branding.260 In 2017,
Gagosian’s global art enterprise represented 77 artists and handled many more,
estimated to generate revenues of about $1 billion a year.261
However, the recent accusations and legal conflicts regarding his business prac-
tices have cast a light cloud over this outstanding position. As regards price setting
mechanisms, the same that can be said about dealers equally holds true for auction
houses: the signalling effect of prices is of utmost importance and once a lot is
hammered down or a certain price is paid to a dealer, the price—as far as it is
disclosed—becomes equated with value and is written into art history.262 Hence, the
price is seen as a verdict about the artist’s reputation as well as the dealer’s and
clients’ status. Due to the fact that many dealers refuse to endow the art in their
galleries and at fairs with prices, the New York City legislature, in 1998, planned to
enforce the 1971 Truth in Pricing Law that would require dealers to display prices
“within sight of consumers”.263 Most dealers refused to give effect to the regulation
as the display of prices is regarded as an interference with customers’ enjoyment of
art and as an equation of galleries with ordinary retail shops. Consequently, the
regulation was not complied with, and its enforcement was stopped.264 The impor-
tant position that both dealers and auction houses assume when it comes to the
determination of art’s value and price will be discussed in detail in the second part of
this chapter. Before that, however, the role of museums will be briefly examined, and
several case studies reviewed with the purpose of illustrating the practical implica-
tions of dealer and advisors’ business practices.
2.2.5 Museums
As mentioned above, museums also continue to play an important role in today’s art
world. While their role has already been extensively elaborated upon, it is important
to briefly recall that historically, there have been two models for art museums: those
funded by the state (the European model) and those nonprofits that are primarily
funded by private donors (the US model).265 While the purpose of the institutions is
the same, the main difference lies in their funding. However, there has been a major
shift in the sense that government-supported public museums increasingly rely on
259
Ibid.
260
Adam (2014), pp. 16 and 47 f.
261
Lipsky-Karasz (April 26, 2016).
262
Zarobell (2017), p. 4.
263
McGill (February 10, 1998). The “truth in pricing law” was part of a larger attempt to regulate
the art industry where price manipulations were endemic. However, the law was never enforced.
264
Ibid.
265
Zarobell (2017), p. 29 and Marcus et al. (2017), p. 28. See also Yermaeck (2017).
funds from visitors and donors. In times of austerity, government funding is reduced
and initiatives towards private funding are encouraged.266 This means that fre-
quently, private sponsors are needed that fund exhibitions and in turn, are promoted
as such.267 Reliant on tourism and growing visitor numbers, it is thus imperative that
museums diversify their revenue stream.268
Consequently, these market forces, and the need to attract visitors have also
changed museums’ structures. Museums attempt at becoming more engaging and
interactive and hence, treat visitors and the public as active consumers rather than as
passive recipients of information.269 As a result of this shift in museum management
culture, museums are no longer predominantly custodial institutions, but are becom-
ing increasingly focused on audience attraction through visitor interaction.270 With a
general upsurge in the number of museums worldwide, museums have to compete in
order to remain attractive for visitors. Privately-funded museums are opening in
capital cities like Beijing and Shanghai271 or Mexico City,272 while others such as
New York’s Solomon R. Guggenheim Museum are expanding into a global
brand.273 Continuing this development, the Louvre has opened branches at Lens in
the Pas-de-Calais department in northern France and in Abu Dhabi.274 Private
museums are described as the billionaires’ “must have” in the twenty-first century
and hence, the demand for high-impact works by branded artists has accelerated.275
In line with this, public museums, which once stood aloof from the market, are now
increasingly involved with this sector. This is reinforced by the fact that “superstar
curators” and advisors have moved from the public to the private sector and continue
to play a major role in the validation of artworks. This development is occurring at a
time when state funding is challenged in both Europe and the United States, while
new sources of wealth have been accumulated in emerging markets. The Louvre
266
However, it is obvious that trying to obtain alternative funding to realise alternative revenue
streams is not an easy process.
267
Marcus et al. (2017), p. 28.
268
Pownall (2016), p. 45.
269
Arora and Vermeylen (2013), p. 197. For an extensive discussion of this development see Evrad
and Krebs (2018), pp. 353–363.
270
Gilmore and Rentschler (2002), pp. 745–760.
271
These are for example the Shanghai Himalayas Art Museum and the Rockbund Art Museum in
Shanghai, and the Today Art Museum, the Red Brick Art Museum and The Ullens Centre for
Contemporary Art in Beijing.
272
Museum Jumex opened in 2013 and displays the collection of entrepreneur Eugenio López
Alonso, while the Museum Soumaya houses the 70,000-piece collection of Carlos Slim.
273
Apart from the Guggenheim Museum in New York, the Guggenheim Foundation also runs the
Guggenheim Museum in Bilbao and the Peggy Guggenheim Collection in Venice.
274
For the next 30 years, the museum on Saadiyat Island will be known as ‘Louvre Abu Dhabi’.
Permission was granted from the Louvre in exchange for payment of €400 million. Bopp
(November 11, 2007).
275
Adam (2014), p. 11. The most telling example is perhaps the purchase of Da Vinci’s Salvator
Mundi, which will go on view in the Louvre Abu Dhabi.
Abu Dhabi offers an emblematic example of this development. It is argued that

pretty much every art museum is seeking to expand its collection.276
However, compared with the spending power of other market participants,
museums’ acquisition budgets are rather limited so that their accession funds can
no longer be counted on to secure important works for their collections. On the other
hand, the sale of Leonardo’s Salvator Mundi, the “last” work in private hands,
underscores the consequences that museum acquisitions also have in the market-
place. It is suggested that the enormous number of masterworks that belong to the
museums of Europe and the Americas has compounded the demand for the few
masterworks that remain in private hands and hence, has indirectly fuelled the rise of
contemporary art as “the only remaining game in town”.277 As a result, museum
accession creates the paradox that it exacerbates scarcity in the market and also
challenges museum administrators, who own works worth tens of millions of
dollars, and who might be tempted to dispose of them in order to satisfy pressing
economic needs. Moreover, the $450 million paid for the Salvator Mundi firmly rests
on the assumption that the other 15 Leonardos in public collections will remain there
in perpetuity. Christie’s marketing strategy presented the work as the “last Leonardo
in private hands”, thereby validating the close interdependence between the market-
place and the museum, with the latter restricting the number of trophy works still in
public circulation.278
2.2.6 Practices of Dealers as Illustrated by Cases
As indicated before, another crucial peculiarity of the art market and of dealers is the
fact that transactions might involve extensive chains of intermediaries, or that
dealers represent both ends of a deal—circumstances that are not necessarily
known to the parties. Consequently, buyers often do not know the identity of the
actual seller; instead, they are represented by dealers and hence, every transaction
involves the risk that the undisclosed seller is withholding information that could
cause problems after the sale or that the dealer is in fact acting on behalf of both
parties.279 Obviously, when a dealer works both ends of a deal, he inevitable faces a
conflict of interest between representing the interests of the seller (achieving the
highest price) and the interests of a buyer (buying an artwork for a price that can be
represented as being realistic).
Recently, several lawsuits were filed against prominent figures in the art trade:
three cases against art dealer Larry Gagosian, one against freeport operator and art
dealer Yves Bouvier and two against art advisor Helge Achenbach. These disputes
276
Zarobell (2017), p. 40.
277
Gammon (2017).
278
See Christie’s, The last Da Vinci (November 12, 2017).
279
Sesser and Levine (2010).
serve as an illustration of how art market transactions can be characterised by secret

deals, secret commissions and, unfortunately, agreements that eventually settle on
undisclosed terms. In the end, they reveal some peculiar practices that are very
unlikely to occur in other markets.
2.2.6.1 Larry Gagosian v Jan Cowles: Lichtenstein’s Girl in Mirror
While private sales in the secondary market are an important part of the art business,
they are also said to be the most opaque.280 A telling example in this context is the
lawsuit filed against Larry Gagosian in January 2012 that revolved around Roy
Lichtenstein’s Girl in Mirror (1964, from an edition of ten) and which offers a rare
glimpse into such private transactions. Collector Jan Cowles claimed that her son,
who was in financial straits, consigned the respective painting to Gagosian in 2008
without her knowledge or consent.281 The painting ultimately sold to collector
Thompson Dean for $2 million in 2009, but according to the initial consignment
arrangement, Gagosian had promised Charles Cowles, $3 million for the work.282
Instead, Cowles received only $1 million, with Gagosian withholding a high com-
mission of $1 million.283 Cowles claimed that Gagosian lied about the work’s
condition,284 misrepresented the level of demand for the work and skewed the
balance of information in favour of the buyer and therefore, accused him of conver-
sion, fraud, breach of fiduciary duty and unjust enrichment.285 The painting was
valued at $4.5 million on a customs invoice in 2008 and other editions from the
series sold for $4 million at Sotheby’s in 2007 and $4.9 million at Christie’s in
2010.286 Moreover, Charles Cowles disclosed to Gagosian that he was in financial
trouble and asserted that he had his mother’s permission to dispose of the paint-
ing.287 In 2009, the New York Times published an e-mail by Deborah McLeod,
director of the Gagosian branch in Los Angeles, which reveals that the painting was
offered for considerably less to a potential buyer, indicating that this was the chance
of a bargain: “seller now in terrible straits and needs cash. Are you interested in
280
Halperin (2012).
281
Kutscher (14 February 2013).
282
Ackermann (5 February 2013).
283
Klasfeld (January 20, 2012).
284
Cohen (January 18, 2013). According to the court documents, Gagosian gallery informed
Mr. Cowles that the painting could only be sold for $1 million as it was damaged. While the
damage is disputed, it seems odd that Gagosian initially estimated its value at $3 million, even
though the damage must have been obvious when inspecting and taking the Lichtenstein in
commission.
285
Kennedy (March 26, 2012a).
286
Ibid. See further Kutscher (2013), Ackermann (2013) and Klasfeld (2012).
287
Ibid. and Cohen (January 18, 2013).
making a cruel and offensive offer? Come on, want to try?”288 This e-mail has come
to be considered illustrative of this dispute as it offers a rare insight into Gagosian’s
business practices.
In September 2012, Judge Charles E. Ramos of the New York State Supreme
Court denied Gagosian’s motion to dismiss the case because the gallery’s actions
“sufficiently state a cause of action for fraud and present the factual question whether
Gagosian properly discharged its duty of care to Cowles”.289 The questions which
underlie this case are centered on the issue of a dealer’s duty towards his clients.
Gagosian admitted his role as intermediary with dual interests, arguing that this is
common practice and nothing that he had ever considered as inappropriate. Also his
gallery had done so in the past, without disclosing this relationship to the parties
involved.290 On the other hand, Cowles and her lawyers insisted that this practice is
illegal as “the prohibition against undisclosed dual agency is based upon the
principle that when an agent acts for adverse interests, he must necessarily be
unfaithful to one or the other as the duties which he owes to his respective principles
are conflicting”.291 Yet, art dealers are considered to aim for the highest price for the
seller—their true client—as this will also earn them the highest commission.292
However, if the work is offered as a bargain to a potential purchaser, the conflict of
interest is more than clear because in the end, it is impossible for the dealer to do
justice to these inherently contradictory interests.293 According to Mrs. Cowles’s
lawyer, such representation of both parties without disclosure is “blatantly unlawful
under New York agency law”, while the Gagosian gallery asserted that its “practices
are fully consistent with both the law and the standards in the art world”.294
Unfortunately, the court did not get to publicly comment on these propositions as
the parties reached a settlement on confidential terms and it was only confirmed that
Thompson Dean got to keep the painting and is now acknowledged as its owner.295
2.2.6.2 Larry Gagosian v Ronald Perelman: Koon’s Popeye
Collector Ronald Perelman brought another lawsuit in September 2012, claiming

that Larry Gagosian tricked him into buying Jeff Koon’s sculpture Popeye for $4
288
Ibid. On this, Gagosian commented “it’s just kind of cruel. It’s strange language to use in
connection with an art transaction. I thought it was kind of a funny way to put it . . . Maybe she was
trying to appeal to his animal instincts”.
289
Ibid. and Klasfeld (2012).
290
Randy Kennedy (November 7, 2012b).
291
Ibid. See further Kutscher (2013), Ackermann (2013) and Klasfeld (2012).
292
Ibid.
293
Ibid. To quote Mr. Gagosian on this matter: “I just don’t think about it in terms of - in those terms
[in terms of any duty to the seller]. It’s a financial transaction, and the seller wants to get paid. My
objective is to pay the seller and to make a profit for the gallery”.
294
Ibid.
295
Kennedy (14 March 2013) and Ferro (13 March 2013).
million.296 As the court papers disclose, Perelman accused Gagosian of taking

advantage of his “position of trust” as his long-time friend and art advisor,
concealing material information and manipulating art prices. Their initial dispute
dates back to 2011 when Perelman expressed interest in Cy Twombly’s Leaving
Paphos Ringed with Waves which was at the time available for sale at Gagosian
gallery.297 Gagosian quoted a price of $8 million but when Perelman wanted to put
the sale through, he was informed that the work had already been sold to Jose
Mugrabi, another prominent art collector.298 A few months after the sale, Gagosian
informed Perelman that the painting was back on the market, this time for the
increased price of $11.5 million. Even after negotiating a discount of $1 million,
Perelman felt as though he was being defrauded and filed suit against Gagosian,
accusing him of breach of contract, breach of fiduciary duty, fraud, breach of the
covenant of good faith and fair dealing, unjust enrichment, and deceptive business
practices under section 349 of the General Business Law.299
According to the complaint, Gagosian conspired with the Mugrabi family to
manipulate the final sale price of the Twombly—resulting in a second commission
for Gagosian and a profit for the Mugrabi family. In addition to that, Perelman
accused Gagosian of undervaluing artworks, including Jeff Koon’s Popeye and other
paintings by Willem de Kooning that he exchanged as partial satisfaction of the
$10.5 million asking price of the Twombly.300 According to the lawyer representing
Gagosian, Perelman’s business entities, MacAndrews & Forbes Group LLC and
MAFG Art Fund, through which he acquired the artworks in question are “sophis-
ticated” professional art investment companies that had a “heightened duty to engage
in due diligence in selecting artworks to acquire”.301 On the other hand, the attorney
for Perelman countered these assertions by claiming that Perelman and his compa-
nies could not be considered to be of the same “level of expertise and skill” as
Gagosian who is “probably the world’s leading and most powerful art dealer” and
had been a point of reference and advice for Perelman for over 20 years.302
As a consequence of this dispute, Perelman embarked on a quest to uncover the
secret deals which Gagosian executed, and in the process subpoenaed numerous
high-profile collectors and institutions from the art world, including members of the
Mugrabi family, Larry Gagosian himself and representatives from auction houses
such as Sotheby’s and Philips.303 In June 2013, the presiding judge Barbara
296
Dolmetsch (December 4, 2014).
297
Curley and Kokhba (January 20, 2015).
298
Jovanovic (October 20, 2014a).
299
Ibid.
300
Ibid. See also Dolmetsch (2014).
301
Curley and Kokhba (January 20, 2015).
302
Ibid. According to the plaintiff’s statement, Gagosian not only has “unique knowledge of the art
markets” but “makes those markets”.
303
Jovanovic (August 18, 2014b). Perelman stated that the litigation’s goal is to expose the “dirty”
side of the otherwise prestigious world of art sales.
R. Kapnick told Perelman and Gagosian to “get themselves together at a cocktail

party in the Hamptons” [because] this is a crazy case to have going on here in
court”.304 However, the parties did not settle and in December 2014, the Appellate
Division, First Department decided the following305: as regards the question whether
Gagosian as the seller owed a fiduciary duty to Perelman, the court stated that “the
parties operated at arm’s length when they negotiated” (over the price of the $10.5
million painting).306 Thus, fiduciary obligations did not exist between them. More-
over, even if read liberally, the complaint did not establish that defendants “exercised
control and dominance over plaintiffs - limited liability companies who, by their own
description, frequently purchased, sold and exchanged works of art as
investments”.307
Hence, parties to such transactions should not automatically expect the existence
of a fiduciary duty that is owed to the buyer and should therefore not neglect due
diligence and investigative obligations.308 In dismissing the fraud claim, the court in
MAFG Art Fund, LLC v Gagosian recognised the absence of such investigations in
the value of the respective artworks and market data: “the complaint fails to state a
cause for fraud because plaintiffs did not allege justifiable reliance [. . .] These
sophisticated plaintiffs cannot demonstrate reasonable reliance because they
conducted no due diligence; for example, did not ask defendants, ‘Show us your
market data’“.309 This means that Perelman had the duty to conduct his own
independent research into the prices when he felt that the price for the Twombly
was not reasonable and when he was unsure about the fair market prices of the works
he was exchanging for the Twombly. In addition, this served as a warning for buyers
engaging in comparable transactions: a fiduciary duty should not automatically be
assumed and especially, this expectation should not lead to a lack of own due
diligence and individual research. Besides, the court also went on to state that
“statements about the value of art constitute ‘nonactionable opinion’ that provide
no basis for a fraud claim”.310 This also should increase buyers’ awareness: claims
based on misrepresentations relating to value should be approached with caution as
such claim proves meritless when such statements are interpreted as a mere opinion.
The last issue at stake concerned the principles of good faith and fair dealing:
Gagosian sold Jeff Koons’ Popeye sculpture, in unfinished condition, on to
304
Dolmetsch (June 6, 2013) and Gerlis (2014), p. 41.
305
MAFG Art Fund, LLC v Gagosian, No. 30321(U), NY Slip Op, (N.Y. Sup. Ct. Jan. 31, 2014),
available at http://law.justia.com/cases/new-york/appellate-division-first-department/2014/13685-
653189-12.html[last visited March 30 2022].
306
The argument that Mr. Gagosian owed Mr. Perelman a fiduciary duty is a tricky one as for a
friendship to create a fiduciary responsibility, Mr. Perelman would have to prove that he lacked
power and that he needed Gagosian to take care of his interests, thereby exposing himself to a
certain vulnerability.
307
MAFG Art Fund, LLC v Gagosian (2014).
308
Curley and Kokhba (2015).
309
310
Ibid.
Perelman. However, at the time of the sale, Gagosian was not even the sculpture’s
owner—it was only several weeks later that he concluded a sales agreement with
Sonnabend gallery, purchasing the work for $4 million.311 Ironically, Perelman also
tried to resell Popeye with a profit before he actually acquired ownership.312 The
contract between Gagosian and Sonnabend gallery further contained resale restric-
tions, stipulating that if the sculpture was sold via Gagosian gallery for more than $4
million, Koons would receive 70% of the profit. When Perelman sought to consign
the sculpture back to Gagosian a year later, Gagosian refused to mediate as the
obligation to pay Jeff Koons 70% of profits made above $4 million would have
eradicated the gallery’s profits. Since Gagosian gallery is one of the most important
dealers in Koons’s works, Perelman claimed that this refusal made it virtually
impossible for him to sell the sculpture, alleging that Gagosian “breached the
covenant of good faith and fair dealing implicit in their [. . .] sales agreement by
entering into a subsequent agreement that decreased their incentive to be involved in
resale of the sculpture, because without Gagosian’s involvement, plaintiffs would
not realize as high a price on the resale.”313 However, this line of reasoning was not
followed by the court which found that the essence of the agreement was the
purchase of a sculpture and not its future resale and since this issue was not included
in the agreement, it could not be interpreted as impliedly stating it.314
2.2.6.3 Larry Gagosian v Pelham Europe Ltd.: Pablo Picasso’s Bust of a

Woman (Marie Thérèse)
Yet another incident arose when both Larry Gagosian and the royal family of Qatar
claimed that they bought Picasso’s sculpture Bust of a Woman (Marie Thérèse) from
Maya Widmaier-Picasso.315 While this scenario seems highly unrealistic at first
glance, the parties indeed met in court to settle this dispute.316 While Gagosian
claimed that he had purchased the sculpture in May 2015 for $105.8 million, the
Qatar royal family insisted that they had bought the same work already in November
2014 for $42 million.317 To make matters worse, Gagosian had already sold the
sculpture on to collector Leon Black, who expected to receive the bust after its
inclusion in the MoMA exhibition Picasso Sculpture. The dispute was ultimately
settled on undisclosed terms in New York District Court in May 2016 and hence, it
311
Corbett (28 February 2013).
312
Corbett (14 September 2012).
313
314
Ibid.
315
Pogrebin (January 12, 2016a). Maya Widmaier-Picasso declined to comment on the allegation
that she sold the same artwork to two different buyers.
316
Gagosian Gallery Inc. v Pelham Europe Ltd. 16-cv-00214 (S.D.N.Y. Jan 12, 2016).
317
Pogrebin (January 12, 2016a).
remains unknown who was determined to be the rightful owner.318 Commentators

reported that this dispute once again highlighted the lack of transparency and
handshake nature of many art market transactions that cause dealers and collectors
alike to be unaware of previous agreements that were made regarding the very same
artwork.319 And indeed, it seems to be unlikely that such a case would be able to
come up in any other market.
2.2.6.4 Yves Bouvier v Dmitri Rybolovlev: Da Vinci’s Salvator Mundi

and Modigliani’s Nu Couché au Coussin Bleu
In January 2015, Yves Bouvier, who runs an international art shipping and storage
business and operates freeports in Geneva, Luxembourg and Singapore, was charged
with fraud (alleged manipulation of prices on the art market) as well as complicity in
money laundering.320 Bouvier is the owner of Fine Art Natural Le Coultre SA, a
shipping company that stores about 500,000 artworks in its various storage facili-
ties.321 Natural Le Coultre is a major tenant of the freeport in Geneva and the
majority owner of the freeports in both Luxembourg and Singapore which serve
not only as storage facilities but also as places of commerce: due to their extrater-
ritorial nature, freeports enable their clients to trade art secretly and without being
liable to any direct or indirect taxation. And indeed, in many cases dealers or
collectors do not even appear as parties to the transactions but instead, are
represented by offshore companies that operate from tax havens.322 This is exactly
what was involved in the dispute between Yves Bouvier and Dmitry Rybolovlev: the
defendants, Bouvier and his Hong Kong-incorporated company Mei Investment Pte
Ltd., which served as the vehicle for his art market transactions, were accused by
plaintiffs, two British Virgin Isles-incorporated companies which are owned by
family trusts set up by Rybolovlev under Cypriot law, of having breached fiduciary
duties of agency by fraudulently inflating the prices of the artworks that were the
subject of the transactions.323 Rybolovlev instigated the Monaco authorities to file
criminal proceedings against Bouvier by lodging a complaint with the Monaco
General Prosecutor on the grounds of: (a) “alleged fraud committed between 2003
and 2014” relating to the paintings purchased by Rybolovlev, and (b) “alleged
complicity in money laundering between 2006 and 2014 to transfer from the
318
Pogrebin (May 24, 2016b).
319
Pogrebin (January 12, 2016b).
320
Chrisafis (26 February 2014) and The Economist.com (7 March 2015). See also Koldehoff and
Timm (2020), pp. 276ff.
321
Sennewald and Timm (2013) and Adam (2017), p. 22.
322
Ibid. Freeports are an attractive place for secret transactions as offshore companies, without any
obligation to reveal the actual parties involved, can carry them out. See Adam (2017), p. 17f.
323
Accent Delight International Ltd. and another v Bouvier, Yves Charles Edgar and others [2016]
SGHC 40, Singapore High Court, Suit 236 of 2015, March 17, 2016 at 1, 10 and 13.
accounts of Mei Investment to another business partner the proceeds of fraudulent

acts committed to the detriment of the plaintiffs”.324
In essence, the dispute centered on the acquisition of 38 masterpieces between
2003 and 2014, by artists such as Leonardo da Vinci, Amedeo Modigliani, Pablo
Picasso and Mark Rothko for an estimated amount of two billion Swiss francs in
which Bouvier was responsible for locating and ultimately purchasing the pieces
Rybolovlev wished to acquire.325 However, in late 2014, Rybolovlev discovered
that Bouvier had secured the artworks at prices that were considerably less than those
which he had charged him. Specifically, these include the painting Le Christ comme
Salvator Mundi (Salvator Mundi) by Leonardo da Vinci which Rybolovlev acquired
in May 2013 for $127.5 million from Bouvier, who had previously bought it for a
sum between $75 million and $80 million.326 Ironically, Rybolovlev learned about
the original purchase price from an article in the New York Times and allowing for
the 2% commission Bouvier received, this still accounts for a markup of about $50
million.327 In addition, Rybolovlev also discovered by coincidence that Modigliani’s
Nu Couché au Coussin Bleu which he purchased from Rybolovlev in 2012 for $118
million had in fact been sold by the former owner for $93.5 million, meaning that
Bouvier retained a markup of $24 million. This was revealed by art advisor Sanford
Heller who represented the original seller, Steve Cohen, and hence, was fully
informed about the purchase price.328 As a consequence of this discovery,
Rybolovlev filed complaints against Bouvier in Monaco and Singapore. He claimed
that by selling the paintings at undisclosed markups, Bouvier “breached the fiduciary
324
Ibid. at 17 and 20.
325
Adam (2017), p. 22. More specifically, Rybolovlev’s claim alleges “(i) breach of fiduciary duties
as agent of the plaintiffs relating to the acquisition of the 38 artworks, (ii) fraudulent misrepresen-
tation and/or deceit by inflating the prices of the artworks and retaining the profits therefrom without
the knowledge, consent or authority of the plaintiff and (iii) breach of duty in retaining the Rothko
painting [No. 6 Violet, vert et rouge].
See Frank (April 4, 2015).
326
Bouvier, Yves Charles Edgar and another v Accent Delight International Ltd. and another [2015]
SGCA 45, Court of Appeal Singapore, August 21, 2015 at 21.
Regarding the sale of Salvator Mundi, a court confirmed in August 2017 that Sotheby’s, as an
additional intermediary in the transaction, had to release documents relating to the sale. Apart from
the accusation that Bouvier inflated the purchase price, it is also claimed that he failed to disclose the
involvement of Sotheby’s. See Kinsella (August 29, 2017).
Ironically, the very same painting was sold for $450.3 million at Christie’s New York in
November 2017, making it a record for a painting at auction and the most ever believed to have
been paid for an artwork. Rybolovlev’s trust was the seller and despite the ongoing litigation with
Yves Bouvier, it seems that Dmitry Rybolovlev can be content with his profit of more than $320
million. See Freeman (November 15, 2017).
327
Frank (2015).
328
Ibid. and Bouvier, Yves Charles Edgar and another v Accent Delight International Ltd. and
another [2015] SGCA 45, Court of Appeal Singapore, August 21, 2015 at 21.
Rybolovlev learned about this in a rather distinct setting: in St. Barths, he struck up a conver-
sation with Heller who casually mentioned a Modigliani painting that had recently been sold by one
of his clients, being ironically the very same painting Mr. Rybolovlev had subsequently bought.
duty which he owed them as their agent” and was “not entitled to profit from the
transactions beyond the 2% commission that he was paid [. . .]”.329 Moreover, this
“fraud [or] deceit is not limited to [these two paintings] but extends to all, or many
of, the other paintings which [Rybolovlev] purchased from [Bouvier].330 The excess
payments were estimated at around $1 billion and Bouvier argued that he was
perfectly entitled to receive them as he did not act as agent in these transactions.331
Instead, these transactions took place on a “willing buyer-willing seller basis”
with Rybolovlev and his companies as the purchasers and Bouvier’s MEI Invest as
the seller.332 MEI Invest did acquire the artworks, bearing all the “risks of
acquisition”—because if Rybolovlev were to decide not to purchase the artwork or
if he were to default on his payment obligations, Bouvier would have been solely and
wholly liable to the original seller.333 Therefore, he was entitled to sell the artworks
at any price which he deemed reasonable—and after all, the objects were transacted
at prices that were agreed by both parties. In fact, the capacity in which Bouvier
acted when arranging the acquisitions was at the heart of the dispute. Rybolovlev
claimed that Bouvier was acting as an agent who negotiated for and obtained the
target artworks on his behalf and hence, owed him fiduciary duties, while Bouvier
claimed that he acted as an independent seller who was transacting at arm’s length so
that he was entitled to sell the artworks to Rybolovlev at the highest prices he
thought the latter was prepared to pay.334 Unfortunately, only the first few trans-
actions were documented with written contracts, as of 2007, transactions were done
informally through emails and invoices served to document the transactions.335 As
revealed during the court proceedings, the transactions all followed a common
pattern: once Rybolovlev confirmed his interest in a particular artwork, Bouvier
was responsible for locating it and persuading the owner to sell it. The work was then
purchased through Bouvier’s company Mei Investment Pte Ltd., which would issue
a sales invoice to Rybolovlev or one of his companies.336 Rybolovlev paid Bouvier a
sum equivalent to 2% of the value of the respective artwork on each transaction he
arranged—according to Rybolovlev, this 2% was a commission and represented the
profit which Bouvier was entitled to earn for each transaction; however, Bouvier
insisted that it was only an administrative fee in order to cover additional expenses
such as shipment and storage.337 The distinction between agent and independent
seller is of great importance: if Bouvier acted as independent seller and offered the
artworks to Rybolovlev without prior arrangement, he was entitled to charge the
329
Ibid. at 22.
330
Ibid. at 23.
331
Ibid. at 23 and 24.
332
Ibid. at 24.
333
Ibid.
334
Ibid. at 10.
335
Ibid. at 15.
336
Ibid. at 14.
337
Ibid. at 15.
markup; however, if Bouvier was instructed to compile the collection of paintings on

a commission basis, the markup would be illegal as Bouvier was obliged to disclose
the purchase price, plus his added commission.338 According to the complaint,
Bouvier falsified sales documents to disguise the markup of the paintings; for each
sale, he provided two invoices to Rybolovlev, one stating the sales price for the
painting and a second one stating the sales commission (or administration fee,
according to Bouvier) of 2%.339 But in addition, it was claimed that Bouvier also
secretly deducted large amounts in addition to his commissions—at least $20 million
in the case of the Modigliani painting and as much as $50 million in the sale of Da
Vinci’s Salvator Mundi. As a result of the way in which the transactions were
structured, Rybolovlev acquired the artworks without knowing the sellers’ identity,
while he also remained anonymous. This led the court to acknowledge that:
It appears that buyers and sellers of art masterpieces prize secrecy and discretion, and as a
result, masterpieces usually change hands in discreet private sales, presumably so that the
wealth of the parties concerned will not be made public. But it also means that the ownership
of many of these paintings is opaque. Mr. Bouvier was able to locate the target artworks,
identify their owners and make the acquisitions concerned due to his extensive network of
contacts in the international art market.340
According to Rybolovlev, this “climate of secrecy and discretion” was the reason
why he never had any direct dealings with the artworks’ sellers and why the
acquisitions were routed through Bouvier’s company, hence protecting
Rybolovlev’s privacy as the ultimate purchaser.341 He decided to rely solely on
Bouvier’s expertise and knowledge and made all acquisitions through the latter’s
company as this was more convenient than sourcing for each piece separately
through multiple dealers.342 Due to the fact that Bouvier operates freeports which
are estimated to hold hundreds of billions of dollars in valuables, he gained vast
insight into the ownership and location of major works of art and hence, used this
knowledge to become a dealer.343 His extensive contacts and network are therefore
based on his well-established business conducted through the Natural Le Coultre
group of companies.344 Natural Le Coultre specialises in the storage, packing and
shipping of artworks and operates out of the Geneva freeport—a business model that
Bouvier successfully transplanted from Geneva to Singapore and Luxembourg.345
According to the complaint filed by Rybolovlev, “Mr. Bouvier enjoyed the absolute
338
Adam (2017), p. 22.
339
Fontevecchia (March 12, 2015).
340
SGCA 45, at 17.
341
Ibid.
342
Ibid.
343
Frank (2015).
344
SGCA 45, at 18.
345
Ibid.
trust of the buyers and had sole responsibility to carry out the usual verifications,
including concerning the price of each work”.346
Another claim made by Bouvier was that Rybolovlev is considered a sophisti-
cated collector who is “fully informed on the art market” and could have chosen not
to buy the respective artworks in question if he had deemed them to be overpriced.
Moreover, he denied the accusations, stating that this was a normal business dispute
which arose when Rybolovlev faced financial difficulties in September 2014 and
was unable to finance the $140 million purchase of Mark Rothko’s No 6 (Violet, vert
et rouge), the last acquisition Bouvier had arranged.347 Nonetheless, Rybolovlev
insisted that he was overcharged by $60 million for the Rothko painting because
Bouvier had represented the price to be $140 million, whereas in his statements to
the Monaco police, he had admitted that the actual price was €80 million.348 As
regards the current state of the dispute, Rybolovlev filed actions against Bouvier
in Paris, Monaco and Hong Kong and it was decided that the case would proceed in
Singapore, where Bouvier is a permanent resident.349 The Singapore High Court, in
its written decision of 22 March 2016, recommended that the case be transferred to
the Singapore International Commercial Court that was set up in January 2015 to
decide cross-border disputes in commercial cases.350 According to the judge, this
transfer would “level out” any perceived advantages to Bouvier as Rybolovlev’s
“proprietary and equitable claims are not recognised under Swiss law”, hence
causing prejudice to the plaintiff if the suit were to be dealt with in Switzerland.
However, Bouvier argued that Switzerland is the “most appropriate and convenient
jurisdiction to try this dispute” and requested the suit before the Singapore High
Court be suspended.351
Eventually, Singapore’s highest court sided with Bouvier’s arguments and
decided that Switzerland is the more appropriate forum.352 According to the judg-
ment, four transactions conducted between 2003 and 2006 were subject to written
agreements that specified Swiss law as the governing law and Switzerland as the
exclusive jurisdiction and therefore, Judge Sundaresh Menon did not find any reason
to support the claim that other law applied to the relationship during that period.353
Rybolovlev now has to decide whether he will initiate a new civil claim seeking
financial damages in Switzerland. Previously, the Singapore High Court had ordered
346
Ibid.
347
Ibid. at 20.
348
SGHC 40, at 3.
349
Kinsella (March 30, 2016b).
350
SGHC 40, at 116 and 118. However, if parties fail to agree on this transfer, defendants are given
another opportunity to present full arguments as to why this suit should not be transferred to
the SICC.
351
Ibid.
352
Noce (19 April 2017) and Sussman (April 19, 2017).
353
Ibid. The approximately 30 transactions that followed were executed based on oral agreements.
a global freeze on Bouvier’s assets in March 2015, a decision that was reversed
shortly afterwards by the Court of Appeal.354 The worldwide Mareva injunctions
had prevented Bouvier and his companies from disposing or dealing with any of
their assets worldwide up to the sum of $500 million. The Court of Appeal held that
the central question is “whether it has been sufficiently shown that there is a real risk
that the appellants will dissipate their assets to frustrate the enforcement of an
anticipated judgment of the court” and since the respondents have failed to establish
that risk, the appeals were allowed and the Minerva injunctions were set aside.355
After all, this dispute is recognised as an extraordinary contentious legal tussle,
furthermore complicated by the filing of proceedings in different countries, includ-
ing Singapore and France. In June 2018, it was reported that Rybolovlev scored a
partial win in this international dispute. The District Court of New York granted
permission to use several documents from Sotheby’s, which reveal its dealings with
Bouvier and the circumstances under which the latter obtained valuations for the
works in question.356 The documents relate to about 14 of the 38 artworks in total
and include Leonardo’s Salvator Mundi.357 The court agreed that the paperwork
could provide Rybolovlev with insight into whether Bouvier held himself out of
Sotheby’s as agent or representative and if he had fraudulent motives when
conducting these transactions.358 Sotheby’s appealed the decision, which would
force them to provide confidential business information and referred to the newly
implemented General Data Protection Regulation (GDPR) which introduced a
stricter data privacy regime. The case of Bouvier and Rybolovlev has strong
similarities with that of Helge Achenbach and the Albrecht family, which serves
as the last exemplary case study. Achenbach was the art advisor to the Albrecht
family and was found guilty on charges of fraud and for having defrauded his
business partner Berthold Albrecht of about €20 million through illegally inflated
invoices.
354
SGCA 45, at 29. See also Perlson (June 22, 2015).
355
Ibid. at 5 and 41. This case is of particular importance as the Court of Appeal effectively
tightened the requirements that must be met before a freezing order can be granted: an allegation of
dishonesty does not obviate the need to establish a real risk of dissipation of assets, which is key to
obtaining a Mareva injunction. For more information see Clifford Chance, Worldwide Mareva
injunctions in Singapore: Issues to consider following Bouvier v Accent Delight, Briefing Note,
September 2015.
356
Kinsella (June 21, 2018).
357
See Freeman (November 15, 2017).
358
Judge Furman in Application of Accent Delight Int’l, Ltd., No. 16-MC-125, 2018 WL 2849724,
at 4 (S.D.N.Y. June 11, 2018).
2.2.6.5 Helge Achenbach v Babette Albrecht: Unauthorised Markups

and Falsified Invoices
In March 2015, one of Germany’s most prominent art advisors, Helge Achenbach,
was found guilty of 18 counts of fraud, four of which in combination with breach of
trust, and was sentenced to 6 years in prison and to pay compensation of about €19
million.359 Babette Albrecht, widow of Berthold Albrecht, heir to the supermarket
chain Aldi and one of Germany’s wealthiest men, filed the complaint after an audit
revealed inconsistencies between invoices and the agreed commission.
The family accused Achenbach of adding unauthorised markups and falsifying
invoices, thereby defrauding them of about €19 million.360 Between 2009 and 2012,
the Albrecht family acquired 21 paintings and sculptures from Achenbach for their
collection, from artists such as Ernst Ludwig Kirchner, Gerhard Richter, Roy
Lichtenstein, Francis Picaba, Tony Cragg, Oskar Kokoschka, Pablo Picasso, Juan
Múnoz, Barry Flanagan, Albert Oehler and Takashi Murakami, for a total value of
€24 million.361 However, Achenbach charged the Albrecht family about €33.6
million for their acquisitions through illegal markups and falsified documents.362
Achenbach had worked as an art advisor since the 1970s and is deemed to be the
inventor of what has become known as the art advisory industry.363 He was
considered to be capable of identifying and securing the most important artworks
on the market, also with a view to future enhancements in value, a skill and expertise
many of Germany’s top collectors made use of.364 Between 2009 and 2011, he acted
as agent for the Albrecht family in the acquisition process for their art collection. 365
During this time, Helge Achenbach and Berthold Albrecht cultivated a friendship
and Albrecht instructed Achenbach, who was well known in the art world and had an
extensive network, to purchase artworks for his private collection on a commission
basis. Albrecht feared that art dealers and galleries would charge him higher prices
once they were aware that their potential customer is the heir to the well-known Aldi
359
For the judgement in the criminal proceedings see LG Essen, Case 56 KLs 10/14, judgment of
16 March 2015.
For the judgement in the civil action see LG Düsseldorf, Case 6 O 280/14, judgment of
20 January 2015. See further Koldehoff and Timm (2020), pp. 210ff.
360
Forbes (July 3, 2014) and Keuchel (March 16, 2015).
361
LG Düsseldorf, Case 6 O 280/14, judgement of 20 January 2015, at 8.
The case also concerned the sale of several highly valuable vintage cars that Achenbach sold to
Albrecht with unauthorised markups. The damages resulting from the overpriced cars was deter-
mined at about €14 million. For more information see LG Essen, Case 56 KLs 10/14, judgment of
16 March 2015.
at 23, 157–237 and LG Düsseldorf, Case 6 O 280/14, judgment of 20 January 2015, at 10ff.
362
LG Düsseldorf, Case 6 O 280/14, judgment of 20 January 2015, at 8.
363
Keuchel (2015); and LG Essen, Case 56 KLs 10/14, judgment of 16 March 2015, at 28.
364
Neuendorf (March 16, 2015a).
365
LG Essen, Case 56 KLs 10/14, judgment of 16 March 2015, at 22.
fortune.366 It was thus orally agreed in January 2009 that Achenbach would start
looking for valuable and rare artworks, while the Albrecht family would remain
anonymous in any transaction. Likewise, it was agreed that Achenbach should
negotiate the purchase prices as favourably as possible, sell the paintings on to
Albrecht and retain a commission of 5%.367 However, court documents confirmed
that Achenbach misquoted the original purchase prices in several cases, which led
the Albrecht family to suffer severe pecuniary damage.368 It was further explicitly
revealed during the trial that the parties never signed a consultancy agreement and
that Achenbach’s endeavours were solely based on oral agreements.369 It also came
forward that a great deal of Achenbach-Kunstberatungs-GmbH’s business trans-
actions were based on oral agreements only, with no written documentation and that
ordinary business operations could thus not be conducted without Achenbach’s
permanent involvement.370 As regards the arrangement with Albrecht, Achenbach
did on several occasions not abide by the agreement by quoting much higher
purchase prices, adding his commission and, as an aggravating fact, also prepared
falsified copies of the invoices in order to document the alleged correct purchase
price.371 Concerning the particular cases that were the subject of the court pro-
ceedings, the court quotes two instances (Fall 3 and 4)372 where the commission was
added to already overpriced purchase prices and another case (Fall 6) where
Achenbach and Albrecht visited an art fair and Achenbach negotiated a purchase
price of $5 million, an amount he later turned into €5 million on a falsified copy of
the invoice.373 In another case (Fall 7), Achenbach purchased a sculpture from a
gallery for $1.4 million, stated €1.8 million on the prepared copy, but forgot to
conceal a handwritten comment stating the original price of $1.4 million—a fact
which Albrecht either did not notice or decided to ignore.374 The 8th, 10th and 11th
cases (Fall 8, 10 and 11)375 concerned purchases from galleries at art fairs, where
Achenbach altered the purchase price and provided Albrecht with falsified invoice
copies. The 9th and 12th cases (Fall 9 and 12)376 are, however, more complex: the
9th case concerned the purchase of artworks from an artist’s estate that were
366
Ibid. at 36 and 38.
367
Ibid. at 39.
368
Ibid. at 22.
369
Ibid. at 40. This was confirmed by Achenbach’s lawyer Thomas Elsner: “Grundlage der
Geschäfte zwischen Berthold Albrecht und Helge Achenbach waren im wesentlichen mündliche
Vereinbarungen. In einigen wenigen Fällen wurden Schriftstücke auf Wunsch von Berthold so
angefertigt, dass die in die Verhandlungen nicht involvierte Ehefrau über den Umgang der mit
Helge vereinbarten Vergütung im Unklaren blieb.” See Onkelbach (July 2014).
370
Ibid. at 30.
371
Ibid. at 45 and 46.
372
Ibid. at 47.
373
Ibid. at 70.
374
Ibid. at 79.
375
Ibid. at 88, 108 and 117.
376
Ibid. at 98 and 127ff.
previously part of a museum exhibition and Achenbach claimed that he had to make
a lot of effort, including making a donation to the museum, to be able to buy the
paintings. The 12th case dealt with the incident of Achenbach commissioning a
sculpture from an artist, which he sold to Albrecht in January 2011 for about
€435,000; months before he acquired the sculpture from the artist for €220,000.
After vehemently denying the accusations, Achenbach confessed in December
2014 and admitted that he had indeed marked up prices to minimise his risk exposure
due to the buy-back clause in the agreement with Albrecht. He claimed that the
transactions were not on a commission basis but were instead sales agreements with
a take-back obligation for a time of 5 or 7 years, respectively. In cases of a return,
Achenbach had obligated himself to pay back the purchase price with interest of 4%.
These obligations together with the associated risk were, according to Achenbach,
the decisive reason for the markups.377 In addition, he asserted that even without
such a take-back obligation, markups of 50% on the purchase price are not uncom-
mon in art transactions. Moreover, Achenbach claimed that the oral agreement with
Albrecht merely constituted a general basis for their business, with different arrange-
ments being made for the individual transactions.378 According to Achenbach, the
5% commission was in fact a “handling fee”—a percentage that is far below
commissions that are customary in the art market—and for transactions that did
not fall under this 5% commission arrangement, he was free to add a margin which
he deemed reasonable (again, as customary in the art market, he did not disclose such
margins). This assertion could, however, not be proven by the court which referred
to a commission invoice that explicitly stated that the 5% commission was due for
the brokered artworks.379 This contradicted Achenbach’s assertion that the trans-
actions were in fact sales agreements and not brokerages because it is not clear why a
company would charge such a commission if it makes its profit from the difference
between wholesale price and resale price.380 Furthermore, the explanation that the
5% represented a “handling fee” is not plausible either because the handling,
i.e. transportation, insurance and installation, were in each case billed separately.381
Therefore, the court came to the conclusion that Achenbach was guilty of fraud
on 18 counts pursuant to §263 Abs. 1 StGB.382 As regards the calculation of the
financial loss suffered by the parties, this is the difference between the original
purchase price and the higher price which Albrecht paid to Achenbach. Importantly,
the financial loss suffered due to the inflated prices is to be calculated irrespective of
any possible enhancement in value of the artworks in question. This is especially
important because as Achenbach correctly predicted, the acquired artworks did in
fact increase in value: the collection Albrecht amassed for around €50 million, was
377
LG Düsseldorf, Case 6 O 280/14, judgment of 20 January 2015, at 17ff.
378
LG Essen, Case 56 KLs 10/14, judgment of 16 March 2015, at 384 and 407.
379
Ibid. at 412.
380
Ibid. at 416.
381
Ibid. at 417.
382
Ibid. at 505ff.
worth an estimated €80 million in 2015.383 Moreover, the court found the question
whether the transactions were made on a commission basis or whether they
represented sales agreements with the special obligation to take the object back
during a certain period of time was irrelevant for the award of damages under §280
Abs. 1 BGB, which entitles a creditor to compensation resulting from the debtor’s
breach of his contractual obligations, irrespective of the privity of contract being a
commission transaction or a sales agreement.384 At the same time, the court was not
convinced by Achenbach’s defence: as it became clear during the proceedings,
Achenbach was instructed to negotiate a favourable price with the seller and this
task could not be reconciled with the alleged agreement that he was free to add any
markups at his discretion. If this had been the case, Albrecht would have bought the
works at an arbitrary price, with the real market price being completely opaque. In
addition, the court could not find any explanation for why Achenbach should have
had the discretionary power to alter the original purchase invoices’ amounts from US
Dollars to Euros for the paintings London Tower Bridge II by Oskar Kokoschka,
Pablo Picasso’s La Famille du Jardinière, Barry Flanagan’s Thinker on Rock Bronze
and Takashi Murakami’s Yume Lion.385 As even the court expressly acknowledged,
the proceedings caused severe damage to Achenbach’s reputation as a renowned art
expert and advisor.386 Furthermore, the court found aggravating circumstances since
Achenbach defrauded a person with whom, as a friend, he had a special relationship
of trust.387 Even though Achenbach appealed the decision, the Bundesgerichtshof
upheld the prison sentence of 6 years in June 2016.388
2.2.6.6 Helge Achenbach v Christian Boehringer: More Hidden

Premiums
During the lawsuit brought by the defrauded Albrecht heirs, it surfaced that Helge
Achenbach had already previously engaged in dubious business practices. In fact, it
came to light that Achenbach had also defrauded Christian Boehringer, scion to the
Boehringer pharmaceutical dynasty. The case was settled out of court in 2012 with
Achenbach refunding Boehringer the sum of €1.1 million that he had been
overcharged.389 Thomas Kellein, Achenbach’s former associate, testified that
383
Neuendorf (January 14, 2015b).
384
385
Ibid. at 34ff.
386
LG Essen, Case 56 KLs 10/14, judgment of 16 March 2015, at 526. “Mit der Verurteilung ist ein
tiefer Fall vom weltweit anerkannten Kunstexperten zum Straftäter verbunden, was mit einem
erheblichen gesellschaftlichen Reputationsverlust einhergeht.”
387
Ibid. at 528.
388
Legal Tribune Online, BGH weist Revision ab: Urteil gegen Kunstberater Achenbach
rechtskräftig, June 8, 2016.
389
Neuendorf (January 14, 2015c) and FAZ (12 January 2015).
Achenbach had charged Boehringer “high price premiums” while he was the
managing director of the now-defunct consulting firm Berenberg Art Advice, a
subsidiary of the private Berenberg Bank.390
Between 2012 and May 2013, Kellein noticed that “something wasn’t right” and
that Achenbach charged premiums which he “couldn’t support anymore”.391 He
went on to inform the directors of the Berenberg Bank about his suspicions and soon
after, the bank dissolved its art consulting division. Achenbach subsequently admit-
ted that he had charged Boehringer an additional fee in addition to the agreed
purchase price and the 5% commission because the business targets of Berenberg
Art Advice were too optimistic.392 When Boehringer became suspicious, Achenbach
provided a list with the paintings that were sold with additional markups, apologised,
and paid the compensation of about €1 million.393
2.2.7 Interim Conclusion from Case Studies
In the opaque art market, collectors might have already been aware of the fear of
being either overcharged or underpaid by dealers, but the scandals and disputes
involving some of the most prominent art market players such as Larry Gagosian,
Yves Bouvier and Helge Achenbach are likely to have added yet another dimension
of scepticism to prevalent business practices. Strikingly, even though the cases
concern different people and situations, they still show a number of similarities
which can be reduced to the fact that dealers profit from the art market’s discretion
and its asymmetry of information as well as from the established fact that artworks’
prices are established in very obscure ways.394 At first sight, lawsuits seem to be a
valuable way of bringing some clarity into the legality of dealers’ business practices;
however, in most cases, they are settled privately and on undisclosed terms. Regard-
ing the cases discussed, only in the disputes between Ron Perelman and Larry
Gagosian and that between the Albrecht family and Helge Achenbach, was the
court able to deliver a judgment.
Nevertheless, there are several valuable conclusions which can be deducted from
the little information that became available: in Larry Gagosian v Jan Cowles,
Gagosian emphasised that it is normal practice for a dealer to represent both sides
to a transaction. While this is generally not disclosed to the parties involved, it is
questionable whether this behaviour is in accordance with the prohibition of
undisclosed dual agency. Especially because a dealer representing both the seller
and the buyer is in a conflict of interest as he is obviously not able to live up to the
390
Ibid.
391
Neuendorf (January 6, 2015c) and Keuchel (2 July 2014).
392
Neuendorf (2015c) and FAZ (5 January 2016).
393
Ibid.
394
Leach (2004), p. 290.
parties’ contradictory expectations regarding the prices that are to be realised.

Unfortunately, the court did not comment on this practice, which is not an individual
case but established practice in art transactions. However, the court confirmed the
presence of a sufficient cause of action for fraud that centres on the question whether
Gagosian properly discharged its duty of care to Cowles, the seller. Since the
contents of an e-mail to a potential buyer were revealed, the seller’s strained financial
situation and his asking the recipient to make a “cruel and offensive offer” for the
painting were open to scrutiny. And, since Gagosian also represented Cowles, it is
apparent why the allegations of fraud and breach of fiduciary duty came
up. Moreover, the case exemplifies the universal problem of objective valuation:
the painting which was consigned to Gagosian was first valued at $3 million and
later at $2 million, while other works from the same edition had sold for $4 million
and $4.9 million at auction. The devaluation was allegedly due to a downgrading of
the work’s condition, which is not a very convincing justification as a work’s
condition is usually immediately checked and reported once a work is consigned
for sale. In another dispute involving Gagosian, namely Larry Gagosian v Ron
Perelman, the court was able to formulate a judgment, even though the presiding
judge had advised the parties to get together in the Hamptons and solve the matter
over a cocktail. While Perelman claimed that Gagosian is the world’s leading and
most powerful art dealer and hence, more sophisticated than any of his clients,
Perelman accused him of price manipulation by disguising artworks’ availability and
setting prices in arbitrary manners.
However, the court found Gagosian and Perelman to be at arm’s length. Conse-
quently, Gagosian did not owe Perelman any fiduciary duties and importantly, the
court stressed buyers’ responsibility to exercise due diligence: if a potential buyer
considers an artwork’s price to be unreasonable, he is expected to check and find out
the fair market prices. However, as will be shown, the fair market value of any
artwork is very difficult to determine, and dealers enjoy great competence and
autonomy when setting prices. In addition, the court considered statements about
the value of art to be “nonactionable opinions” which do not represent a basis for a
claim of fraud. Therefore, if a buyer does not agree with the asking price, he is best
advised to step back from the deal since later, he cannot start a case claiming that the
dealer defrauded him or manipulated the sales price. The importance of this finding
also becomes apparent in the case Yves Bouvier v Dmitry Rybolovlev, with the latter
accusing Bouvier of breach of fiduciary duty by fraudulently inflating sales prices.
Rybolovlev had acquired several artworks with the help of Bouvier—apparently at
prices he deemed to be reasonable because otherwise, he would have not engaged in
the transactions—and when he learned that Bouvier had secured them at consider-
ably lower prices, filed suit claiming that Bouvier acted as his agent and was not
allowed to charge such markups. Significantly, Rybolovlev learned about Bouvier’s
actual purchase prices from an article in the New York Times and over dinner while
on holiday in St. Barths. What is also typical for most art transactions is that the sales
were conducted informally through e-mails and invoices, without written contracts
of sale. This confirms the informal nature of high-stakes art dealing, in which even
nine-figure transactions can be executed with a handshake. The Bouvier case bears
many resemblances with that of Berthold Albrecht v Helge Achenbach as both focus
on the question whether defendants acted as agents or independent sellers, and both
reveal the informal nature which characterise such deals. Like Rybolovlev, also
Albrecht remained anonymous in all transactions and relied on oral agreements with
Achenbach, who likewise saw it as normal business practice to engage in the deals
without written documentation. While the outcome in Bouvier v Rybolovlev remains
open at this time, the court in Achenbach v Albrecht found Achenbach guilty of
fraud, foremost because it was proven beyond any doubt that Achenbach was acting
as Albrecht’s agent and falsified invoices to conceal the secret markups.
While Achenbach failed to produce convincing evidence that he acted as inde-
pendent seller,395 the progress in Bouvier v Rybolovlev shows whether Bouvier has
any chance of succeeding in proving a normal buyer-seller relationship that entitled
him to charge higher prices in the resales. Finally, the cases of Gagosian v Perelman
and Gagosian v Pelham illustrate potential consequences which the art market’s
focus on discretion and confidentiality can bring about: in the latter case, Gagosian
had resold a Picasso sculpture to a collector before he himself acquired ownership
and the same happened in the case against Perelman. Gagosian had sold Koons’s
Popeye, even though in an unfinished state, to Perelman before he had acquired it
from Sonnabend gallery and, ironically, also Perelman had tried to sell the sculpture
before buying it from Gagosian, who at the time did not even have the capacity to
transfer ownership. And likewise, in the Achenbach case, apart from the fact that
Achenbach had charged €200,000 more than the original sales price, he had also sold
a sculpture on to Albrecht before formally buying it from the artist 2 months later
(Fall 12). These examples seem to indicate that parties to art transactions can and
will dispose of artworks which they do not even own yet. After all, there is no public
register or any other way a potential buyer could check and assure himself of the
seller’s ownership. A lack that—given that the value of many artworks is compara-
ble to property—seems to have far-reaching consequences.
Moreover, the cases offer a glimpse into the dimension of markups and commis-
sions charged in the private art market which are usually kept secret from the parties
concerned. In the end, these case studies vividly demonstrate several of the pecu-
liarities characterising the art market and reveal why it is suggested that art market
transactions should shift from informal arrangements based on trust towards
attaching greater importance on due diligence and written agreements. It is
recommended that buyers place greater emphasis on extensive written contracts
which confirm sellers’ clear legal title to dispose of the artwork, the definite size
of the commission, whether the seller indeed acts as independent seller or agent and
whether he is allowed to act on both sides of a transaction. A second concern, apart
from title considerations and sellers’ capacity, is authenticity. Even if a buyer
conducts reasonable due diligence to the extent possible and receives all information
395
In contrast, it was even expressly agreed between Achenbach and Albrecht that the former would
try to secure the artworks for Albrecht at the lowest price possible as Albrecht feared that his well-
known wealth would tempt dealers to charge him higher prices.
2.3 Valuation 79
in writing, this will not remove the risk that the work acquired is dubious or a
forgery. Before dealing with the topic of authentication and attribution, it is impor-
tant to first have a look at both the valuation of art and the interest in treating art as an
investment.
2.3 Valuation
Every artwork holds the potential of three different types of value: commercial,
social, and essential.396 As regards the commercial value of art, there is no objective
value. Usually, in most markets, prices are public and transparent. As a result, they
reflect the true market value of the goods being traded. However, this does not apply
to the art market as art is sold and bought for a variety of, often illogical, reasons.397
According to Frey and Eichenberger, these “behavioural anomalies” (i.e. systemic
deviations of individuals’ behavior from [. . .] axioms of rationality and, in particular,
from subjective expected utility maximization)” are of great importance in the art
market and one of its distinguishing characteristics.398 From the pleasure of acquir-
ing a piece of art history to supporting a befriended artist or buying to boost one’s
social status, the price is considered “subsidiary to the other benefits that accrue from
owning art”.399
These social and essential values combined with art’s subjective nature and its
subjective appeal make the valuation of art an exceptionally complex task. More-
over, the processes and methodologies employed in this process are far from being
objective and rational.400 As a consequence of the foregoing, the valuation of art
suffers from a lack of methodology as well as from the threat of price manipulation
and price fixing. These concerns become particularly pressing with art being
increasingly traded as a financial asset and collateral. Since institutional investors
are often not aware of this market’s anomalies, investment in art deserves further
concern. Resulting from this is the augmented attempt to classify movements and
developments in the art market in what are called art indices: these analytical tools
offer market participants insights into the overall market, individual artists, and
category trends as well as into the timing of their consignments and purchases.
396
Findlay (2012).
397
Adam (2014). This is elaborated on in the section Pricing in the trade.
398
399
Adam (2014).
400
See Steinkamp (1994), p. 362.
2.4 Value, Money and Price Mechanisms: The Lack of a

General Pricing Methodology
To begin with, the fair market value of property can be defined as the price at which
“the property would change hands between a willing buyer and a willing seller,
neither being under any compulsion to buy and sell and both having knowledge of
relevant facts”.401 As noted earlier, this rule cannot be applied to art objects that are
unique and whose value depends to a significant extent on subjective and personal
judgement. In fact, art prices are described as “strictly unnatural in the classical
sense”.402 Another factor is that art prices cannot be based on production costs or
another intrinsic value: at times, their constituent parts represent, if any, only the
tiniest fraction of their value. This validates the assumption that the non-observable
uniqueness may receive a value far beyond what characteristics pricing can put a
hedonic value on.403 In order to determine a fair market value, a starting point would
be to look at sales of similar works by the same artist.
As a consequence, it is suggested that the fair price of an artwork is the result of a
qualitative analysis provided by experts who use relative valuation, such as com-
paring the performance and pricing of similar works in the market.404 Yet, if such
information is available, the works usually differ in quality, condition, popularity of
the subject matter, provenance and rarity and these differences result in substantial
variations in fair market value.405 However, the availability of this type of informa-
tion is particularly limited when it comes to dealer sales in the primary market.406 It
is noteworthy that Olav Velthuis is one of the few researchers who has worked
considerably on galleries and dealers markets, with a focus on the contemporary art
market in Amsterdam.407 Analysing factors such as the size and material of an
artwork, the age, sex and institutional recognition of an artist and the location and
institutional affiliation of a gallery, the main findings were that the size and material
of artworks and the age and place of residence of the artist are strong predictors of
price.408 As has been established before, economists realised already in the nine-
teenth century that the value of art cannot be explained by using the prevailing theory
that, put simply, prices are established when an equilibrium between price and
demand is achieved.409 According to Alfred Marshall, the price at which an artwork
401
Speiller in Merryman and Elsen (2012), p. 1003.
402
Baumol (1986), p. 10.
403
Pownall (2016), p. 32.
404
Picinati di Torcello (2012), p. 21.
405
Speiller (2002), p. 1003. See also Ressler (2007), pp. 26ff.
406
Pownall (2016), p. 31.
407
See, for instance, Rengers and Velthuis (2002), p. 2. Velthuis confirms that due to limited
availability of data and the lack of transparency in the primary market, this segment has so far been
largely ignored in cultural economics.
408
Ibid.
409
Hulst (2017), p. 3 and Velthuis (2005), p. 179.
2.4 Value, Money and Price Mechanisms: The Lack of a General Pricing Methodology 81
is sold “will depend much on whether any rich persons with a fancy for it happen to
be present at its sale. If not, it will probably be bought by dealers who reckon on
being able to sell it at a profit.”410 Echoing Marshall, contemporary dealers may
claim that a value determined at auction is contingent as it is dependent on the
excitement of a single event.411 In this respect, Pownall and Wolk present the
example that there is a tendency to overbid when a bidder is a first-time participant
at auction and that it takes at least five auctions to learn not to overpay at auction.412
From an economic perspective, it would nevertheless be expected that prices defined
at auction for similar works of art by the same artist would be roughly equal to prices
paid in deals at private galleries.413
But paradoxically, the price mechanisms for auctions and for galleries differ
considerably. At auction, supply and demand interact directly to determine prices;
by contrast, galleries sell by means of posted prices and as a result, the price only
indirectly responds to demand and supply.414 If there is an excess of supply, a strong
taboo on decreasing gallery prices prevents galleries and hence the primary market
from clearing. In the case of excess of demand, rationing will be done by means of a
waiting list.415 Unlike auction houses, galleries’ profit orientation is long-term: by
slowly, but constantly, increasing prices, they aim at building a strong market for an
artist.416 As a result, the law of one price, which would indicate an integrated market
where identical works, or close substitutes, are priced uniformly, does not apply.417
In contrast, auction prices are commonly provided in the range of low and high
estimates which are reflective of the uncertainty in the expected market price and
provide an interesting case for examining valuation.418 Since the art market has been
flourishing, also auction data has become more prolific, which, in turn, has turned
auctions into a more transparent sector of the market.419 Furthermore, it is necessary
to make adjustments according to the context in which the other works’ valuation
has been carried out. It might be exemplary of the complexities of the art market that
410
Marshall (2006), p. 148. See also Hulst (2017), p. 3.
411
Velthuis in Mossetto and Vecco (2002), p. 142. See also Pownall (2016), p. 7. Pownall argues
that, in finance, the focus is less on the creative impulse. Even on the heated trading floor, it is
assumed that traders act in a rational manner. This description does obviously not apply to the
auction market, where even the weather is said to have an influence on prices.
412
Pownall and Wolk (2013), p. 14. This research examines the role of experience in economic
decision-making and concludes that experience significantly affects bidding behaviour.
413
Mossetto and Vecco (2002), p. 14.
414
Velthuis (2005), p. 3.
415
Ibid. It is in dealers’ interest to control the future biography of an artwork and consequently, it is
not always in their interest to sell an artwork to the highest bidder.
416
Dealers see themselves as patrons who aim at establishing a firm market for their artists. This is
contrary to the business of auction houses which generally do not work with artists on a long-term
basis.
417
Towse and Handke (2013), p. 328 and Hulst (2017), p. 5.
418
Pownall (2016), p. 31. See also Castellani et al. (2018), pp. 45–56.
419
Ibid.
artworks can have more than one estimated monetary value, depending on the terms
and the purpose of the valuation and reflecting the different circumstances in which it
might be realised.420
For instance, an insurance valuation takes into account that the owner will try to
replace the item as soon as possible, which places him in a weak bargaining position,
and therefore, would include a degree of uplift of the price of the replacement
item.421 In contrast, an auction house’s pre-sale estimate reflects the market situation
at a precise point in time, but importantly, is also likely to be based on the sales
history of similar pieces in the auction house in question and a rather conservative
estimate might be part of the auctioneer’s strategy to entice potential bidders in order
to achieve a better sale price. Lastly, a valuation can provide a current or fair market
value, not considering purchase and opportunity costs.422 Since art is a cultural good
with unique value, there are different theories that deal with the question of how to
combine the cultural and the economic value. At this point, it is important to briefly
consider some studies and findings from the area of cultural economics. The
independent spheres model suggests that economy and culture are two unrelated
spheres and while it acknowledges that the price of an artwork is determined by
forces such as supply and demand, it emphasises that these mechanisms do not have
an influence on the aesthetic or cultural significance of art, simply because price and
value are features of two different spheres.423 Conversely, the contamination model
deems the price to contaminate the cultural value of art in the sense that the market
transforms art into a homogenous commodity.424
Consequently, the visual appearance and the aesthetic meaning of the work is said
to “collapse under the brute weight of price”425 as it can no longer be appreciated
solely for its visual qualities, but each judgement and interpretation is inexplicitly
linked to the price and value. It is further suggested that artworks are generally
interpreted according to their genre and period and that the same considerations
should be applied to their evaluation.426 However, there are no general rules that
could be applied to judge the artistic merit of an artwork as this is not logically
traceable and varies from the perspective and personal preferences of the particular
viewer.427 In this respect, philosopher David Hume acknowledges that there is
always subjective preference involved in artistic judgements, but also stresses that
there can be a “true judge” who is capable of assessing artistic value provided that
this person possesses “good sensory capacities, attention to detail, relevant
420
Ibid. p. 61.
421
Ibid. In the context of artworks, this could mean that the owner would buy from a dealer, instead
of waiting for a comparable work to come up at auction—likely, for a more moderate asking price.
422
Ibid.
423
Velthuis (2003), p. 183.
424
Ibid. p. 189 and Kopytoff (1986) in Appadurai (1986), p. 73.
425
Horowitz (2011), p. 1 and Velthuis (2003), p. 188.
426
Davies (2006), p. 205.
427
Ibid.
knowledge, an unprejudiced attitude and a great deal of practice”.428 Whichever path

is to be followed, it remains an indisputable fact that in recent times, art is considered
a commodity capable of yielding high returns.429 However, when considering art as
an investment asset, one should bear in mind that the actual process of assigning
monetary value to an artwork can be extraordinarily difficult, especially when the
future value is at stake.
According to a study conducted by Olav Velthuis, economic dividends are only
one group out of many socioeconomic factors that explain why art is valued and why
artworks embody symbolic capital and social prestige that collectors acquire along-
side the pursuit of economic profits.430 In the 1960s, early efforts were made to
convince collectors that art provides not only the pleasure of ownership but also
capital gains. To create this enhanced confidence in the art market, Sotheby’s
established the Times-Sotheby’s Art Index, a predecessor of modern indices and
intended to provide investors with information and data on the price movement of all
types of artworks.431 By the 1980s, this strategy proved successful as prices had
gone up and confidence in their continued ascent was well established. Therefore,
the market is said to convert works of art into “passive fictions of eternity and
immutability, of transcendent value for which no price may necessarily be too
high”.432 As a consequence of the foregoing discussion, prices in the art market,
especially in the primary dealer market, are considered to be arbitrary.433 In order to
maintain client integrity, information on transactions is often withheld and data is
sparse.434 Contributing substantially to this argument is the observation that dealers
often refuse to openly disclose the prices of the artworks offered. This implies that
the price is, in fact, not fixed but will vary depending on the potential purchaser: it is
reported that galleries are willing to discount sharply for noted institutions and
collectors whose acquisitions will enhance the artist’s career and prestige.435 In
these contexts the market is said to be manipulated by dealers: first, by their ability
to ration the supply of artworks, select their buyers and adjust prices accordingly and
second, even after a sale by supporting works of the respective artists at auction. In
the realm of auctions, many aspects remain secret, especially since the hammer price
is not always as straightforward as it might seem. For instance, as regards the market
428
Ibid.
429
Hughes (1992), p. 169. According to Hughes, this strongly contrasts previous centuries when
“one bought paintings for pleasure, for commemoration or to cover a hole in the ancestral
panelling”.
430
Velthuis (2003), p. 26. See also Horowitz (2011), p. 22 and Barclays, p.18. One group of
collectors is described as buying out of motives for social prestige and chase trophy artworks which
secure a certain level of status. For an empirical investigation into these subjective determinants
used in the evaluation of artworks see Pommerehne and Granica (1995), pp. 237–249.
431
Rush (1961) and Keen (1971).
432
Pommerehne and Granica (1995), p. 397.
433
Adam (2014).
434
Pownall (2016), p. 31.
435
Ibid.
for Andy Warhol’s artworks, publicly available data reveals that fewer than
20 parties have dominated bidding on Warhol works at auction.436 Between 2005
and 2013, a group of 12 collectors and dealers accounted for about half of known
purchases of Warhol’s works.437
This means that dealers and collectors have opportunities to collude and fix
Warhol prices through the auction market as this kind of information is publicised
and marketed. Hence, a focus on only one category of sales, namely auctions, leads
to opportunities for price fixing, other forms of anticompetitive collusion conduct
and an inevitable selection bias for overall market prices. Adam goes so far to
describe pricing at auction as “clear as mud”.438 This is because achieved prices
appear to be public and transparent but are not necessarily a reliable guide to an
artwork’s value. As a result of the market’s dual pricing structure with roughly half
of all transactions being conducted by dealers and the other half by auction houses, it
is apparent why concerns about price and market manipulation emerge.439 And from
an economic perspective, calculating the price for which a work of art is offered for
sale is thus not simply a matter of finding an equilibrium between the demand for and
the supply of artworks in the market.440
2.4.1 The Threat of Price Manipulation
An example that vividly illustrates the threat and possibility of price manipulation in
the art market was developed by Scott Reyburn for a New York Times article:
Say, for example, I discover a brilliant young artist on Facebook. After a crazy week at my
house in the Hamptons, he has made 30 abstract paintings for me, which I’ve bought for a
total of $90,000. Having posted examples on Instagram, I enter one of these paintings into a
contemporary day sale and ask two business associates, who are cut in on the deal, to bid it
up to $150,000. After the sale, a benchmark auction price posted on Artnet and news of the
artist’s inclusion in a forthcoming museum show — which happens to be curated by a friend
of mine — establishes my new acquaintance as a hot young artist. Over the next six months,
we discreetly sell 20 more paintings at auction and privately for an average price of $70,000
each.441
436
Horowitz (2014), p. 333.
437
Ibid. p. 350. An even smaller group, only ten individuals, have accounted for about 70 percent of
documented underbidders on Warhol works.
438
Ibid. In this regard, auctions are described as a “useful tool for market manipulation”. See Hulst
(2017), p. 226.
439
Robertson and Chong (2008), p. 31.
440
Hulst (2017), p. 3.
441
Reyburn (September 25, 2015).
This fictional scenario is evocative of the flipping of emerging artists at auction,

i.e. the quick resale to make a profit.442 But in general, it exemplifies the growing
concern about the practices employed at the top end of the market. With a focus on
auction results, and their ensuing influence on art prices in general, it becomes clear
that the fear that prices at auction are vulnerable to manipulation is not unrealistic:
promoters can bid up the prices of certain artists and while the New York and the
London art world might overlook this behaviour, collectors might be less likely to do
so—they see the price that was publicly bid, duly paid and hence, is considered to
represent the real and true price for the piece in question.443 Additionally, the
concept of a fair price has the particular notion that it is considered to define itself
reflexively.
This means that the fair price is the highest price a collector can be induced to pay
and once it is paid, it reveals its fairness by reforming and adjusting the price level of
the market.444 In other words, once an artist does very well at auction, his exposure
to media coverage, his reputation, and his overall price level increase and hence, all
collectors of his works benefit. What has become clear so far is that associations exist
between prices on the one hand and the cultural value of art and the status of artists
and dealers on the other. Price may be associated with the quality of the work itself
and hence, is interpreted as signalling quality or status. Consequently, high prices are
equated with aesthetic quality because “in the absence of a well-defined set of rules
for judging quality, price [. . .] is taken as a signal of excellence”.445 It is therefore
another peculiarity of the art market that, in contrast to other cultural goods such as
music or literature, success is measured in rising prices rather than rising sale
numbers.446 In conclusion, it can be established that the art market is a law unto
itself, an “economic puzzle”, rarely abiding by conventional laws of supply and
demand, or seemingly, any rational analysis of quality.447 Moreover, confidentiality
is another decisive factor in the description of the market’s structure, irrespective of
the fact whether pricing, ownership or other aspects of a transaction are concerned.
Therefore, the next section gives a brief introduction of the revelations the Panama
Papers brought to light. As will be seen, offshore companies are also used in the art
market, mostly to conceal ownership or prices or to create tax-friendly arrangements.
442
However, with the market adjusting in 2016, those who had invested in emerging artists during
peak times faced a loss of up to 80 percent of the previous value, comparing it to a stock that
crashed.
See Kazakina (September 19, 2016b).
443
Hughes (1992), p. 397. See also Adam (2014). It is argued that this holds particularly true for the
twenty-first century: the art market is no longer reserved to a tiny elite that acts in closed circles but
is truly international and extends all over the world, thereby attracting buyers who are not
necessarily sophisticated and wary.
444
Hughes (1992), p. 398.
445
Plattner (1998), p. 15.
446
Velthuis (2003), p. 195.
447
Gerlis (2014), p. 8.
2.4.2 The Role of the Panama Papers
The Panama Papers have provided evidence that offshore shell companies are used
to conceal the ownership of art. While the leak of 11.5 million files from the
Panamanian law firm Mossack Fonseca do not per se establish the degree to which
this strategy is used to manipulate the market, it nevertheless illustrates how critical
the role of secrecy is in today’s market.448
As noted earlier, not everything is as transparent at public auctions as it seems and
in some cases, the seller might not even be the real seller.449 A prime example is the
sale of the Victor and Sally Ganz collection at Christie’s New York in 1997.450
Purported to be the estate sale of a collection of modernist masterpieces by artists
like Pablo Picasso, Jasper Johns, Robert Rauschenberg and Frank Stella that was
assembled by the two connoisseur collectors over the span of half a century, the
leaked documents revealed that the collection was actually not sold by their family,
but by the British financier Joe Lewis who had secretly bought it 6 months earlier.451
The seller, Simsbury International Corporation, one of Lewis’s offshore companies,
was created solely for the Ganz auction and the sale can be regarded as a massive
“flip”: a quick resale conducted solely for profit.452 In total, more than 100 works
from the 118-piece collection had been bought for $168 million by Simsbury in an
arrangement with Spink & Son, a former subsidiary of Christie’s, which was at that
time publicly listed, with Lewis being a major shareholder.453
According to the documents, Simsbury and Spink would share the profits if the
collection sold for more than $168 million, meaning that in the end, they split about
$38.5 million.454 What is worrisome is that the sale came to be regarded as an “icon
448
Reyburn (April 11, 2011).
In addition to the cases discussed here, the Panama Papers also had a direct effect on an ongoing
restitution case involving the Modigliani painting Seated Man with a Cane. The Papers confirmed
that the painting, which was looted during the Second World War, is owned by the Nahmad family.
David Nahmad had claimed that the company International Art Center was the owner, but the leak
shows that the Nahmad family controlled the company for more than 20 years. For more informa-
tion see Neuendorf (November 25, 2015c).
449
Interestingly, in 1995, economist Guido Guerzoni criticised Gerhard Reitlinger’s book series
The Economics of Taste (an accepted source of data on return of investment in paintings) for exactly
this lack of information “It emerges that Reitlinger’s data are incomplete, from an economic point of
view. In fact, Reitlinger’s sample leaves out of account a crucial piece of information: the name of
the buyer. This gap would not be very significant if the names of the buyers, once discovered,
coincided with those of the subsequent sellers. But this is not true in most cases.” Guerzoni adds in a
footnote “By the term ‘name’ I mean the surname of the buyer or seller, the basic information used
to identify him.” See Guerzoni (1995), p. 251.
450
451
Vogel (November 11, 2017).
452
Cascone (April 8, 2016). See also the International Consortium of Investigative Journalists
(April 7, 2016).
453
454
Ibid.
2.5 Art as a Financial Asset 87
of estate sales”, a “milestone in pricing” that set a new high for any single-owner
collection at auction, initiating a new era of “blockbuster prices for trophy art”.455
The fact that the sale was technically no longer an estate sale raises the question
whether the buyers would have spent just as much if they had known that the
artworks did not come directly from the estate of Victor and Sally Ganz.456 Strik-
ingly, Joe Lewis had an interest in both ends of the transaction, as he was at the same
the single largest shareholder in Christie’s and Spink & Son.457 And the gamble
worked out at both ends: the sale not only made $206 million, breaking all previous
records for a private collection sale, but subsequently, also landed Christie’s a series
of prestigious commissions and Christie’s value as a publicly owned company
increased steadily. When in 1998 French businessman François Pinault bought
Lewis’s stake in Christie’s for $200 million, Lewis, who had acquired his holdings
for $100 million, doubled his investment.458 Interestingly, also the forgery case of
Wolfgang Beltracchi revealed how purchasers are using offshore companies to
indulge in creative tax arrangements: several of the companies through which his
forgeries were acquired were incorporated in offshore tax havens.459
2.5 Art as a Financial Asset
The last part of this chapter discusses a recent phenomenon of the art market: the fact
that art is increasingly recognised as an investment asset class, with a growing
number of investors entering the market. The possibility of investing in art has
recently generated much interest among investors worldwide and while direct
investment in art is not new, the availability of prices of art has sparked this renewed
interest in tracking price movements and indices.460 As a consequence, the recog-
nition of investment potential is another rational motivational factor for collecting
art.461 It adds to the perception that collecting not only offers the opportunity to own
a cultural good, but a potentially profitable asset as well. The financial motivation
455
Ibid.; and Cascone (April 8, 2016).
456
Ibid.
457
Ibid.
458
Ibid.
459
Koldehoff and Timm (13 June 2013).
For an overview of the respective companies see Koldehoff and Timm (2012), p. 182. For
instance, the sale of the Max Ernst forgery La Horde was transacted through Gemstone Holdings
Limited, Hong Kong; the sale of André Derain’s forged Bateaux à Collioure through Serrano
Finance and Trade SA, Wickhams Bay, Tortola, British Virgin Islands; and another Max Ernst
forgery La foret II through Salomon Trading LLC, Cheyenne, Wyoming, United States and Hanna
Graham Associates, Inc., Nassau, Bahamas.
460
Pownall (2016), p. 41 and Pownall (2008), p. 64.
461
Agnello in Mossetto and Vecco (2002), p. 39.
behind collecting has resulted in several economic studies that try to document the
profitability of investment into collectibles.462
However, apart from the difficulties of valuation already mentioned, there are
several more peculiarities which make art a sensitive investment good. For instance,
the existence of many art indices seems to validate the assertion that the art market
can be quantified and assessed with economic parameters. While the methodology
used is considered to produce valuable results, it is also understood that they are only
an indication, as they do not capture all auction house information or any of the
dealers or private sales prices.463 Nor do they include the costs of buying and selling
art, which can be considerable. The very peculiarities which are said to constitute the
art market’s attractiveness are the very ones which prevent further economic analysis
and scrutiny: art is a heterogeneous product, which additionally poses the risk of
fraud and forgery and furthermore, at least half of its transactions are conducted
unreported and in secrecy. In comparison to traditional investment vehicles such as
stocks and property, art is considered to be cashflow negative, because unlike stocks,
which pay dividends and property, which generates rent, artworks do not yield
profits, but are burdened with high insurance, storage and transaction costs.464
Moreover, the art market is highly illiquid,465 there is no financial derivatives market
where artworks could easily be exchanged, the supply of art is influenced by
unpredictable externalities and opaque market information means that the market
lacks a single generally accepted methodology for valuation and price determina-
tion.466 While these aspects highlight the inefficiencies of the art market, they are in
stark contrast to the fact that certain artworks nevertheless provide exceptional
financial return rates. Research on the broad market involving all segments of
investment-grade art suggests that the compound return is 4% (where the artwork
is held for 5 to 10 years), which is considerably less than the average annual return
for gold and both public and private equity but does not take into account that art is
in fact capable of producing a higher return rate than the US stock markets.467
According to Philip Hoffman, founder and chief executive of the Fine Art Group,
clients are best advised to invest 5% of their holdings in art and since this massive
supply of money coincides with a rather limited supply of art, the prices are being
462
Ibid. For examples of the art investment literature see Frey and Pommerehne (1989); Mei and
Moses (2002); Gerlis (2013); Hulst (2017); and Pownall (2016) referring to Velthuis (2003).
463
Torcello (2012), p. 20.
464
For more information see Pownall (2005).
465
Gerlis (2013) p. 16 and 70. Illiquid assets either take a long time to sell and in case of a quick or
forced sale, would necessitate a discount. To illustrate this point, Gerlis refers to the 2013 chart-
topping Bacon and the 2015 chart-topping Picasso: it is unrealistic that the respective owners could
have sold the same artwork 5 min later for the same price, while they could have easily done so with
the same amounts worth of gold.
466
Horowitz (2011), p. 170.
467
Gerlis (2014), p. 15. Already in 1995, Bruno S. Frey and Reiner Eichenberger studied possibil-
ities to capture and empirically estimate returns from owning art, see Frey and Eichenberger (1995,
pp. 207–220.
pushed up.468 In addition, as far as the determination of high-end art prices is

concerned, it is argued that the spending power of the wealthiest collectors matters
more than the average buying power.469 The current “dizzying prices” therefore
reflect people’s attempt to diversify their investment portfolio and art is also increas-
ingly seen as an “inflationary hedge for those who buy well”.470
2.5.1 Risks and Threats
As regards the risks associated with investments in art, these are plentiful: in this
idiosyncratic market—due to their uniqueness, artworks are not interchangeable—
prices are volatile471 and generally, the scarce information which is available is also
biased: in 2014, for instance, 0.5% of art transactions accounted for nearly half the
value of all fine art sold at auction.472 Another very important risk factor to consider
in any market is the structure in place to oversee its activity. In the art market, its lack
of oversight is often cited as preventing serious investment.473 This perception
coincides with the most recent findings of ArtTactic and Deloitte’s Art & Finance
Report: according to the stakeholders surveyed (collectors, lawyers, art professionals
and wealth managers) the following concerns constitute the most serious threats to
the reputation and the functioning of the art market from an investment
perspective.474
(1) Price manipulation and other anti-competitive behaviour has a negative
impact on the confidence and credibility of any price as well as the data being
used to assess risk and performance in the art market. (2) Undisclosed conflicts of
interest pose a problem as the art market is largely based on a commission-based
revenue model and the importance of intermediaries leads to a lack of transparency
and potential conflicts of interest. (3) Secret commissions further undermine confi-
dence in transactions. (4) General lack of market transparency means that the
functioning of the art market remains opaque and non-transparent. (5) Issues related
to authenticity and well-publicised forgery scandals are considered to further deter
potential investors. (6) A lack of standards around professional qualifications in the
art market makes it complicated and time-consuming to find and select people with
468
Watkins (December 5 2013).
469
Goetzmann et al. (2010), pp. 4ff.
470
Ibid. Yet another example is that of Andy Warhol’s 200 Dollar Bills which was bought for
$383,000 in 1986 and sold for $43.8 million in 2009, more than 100 times its previous value. Or
Picasso’ Les femmes d’Alger, which sold for $4000 in the 1950s, for about $32 million in 1997 in
the Ganz collection sale and for almost $180 million in 2015.
471
Gerlis describes the notion of a work’s true price as a “moveable feast”, p. 17.
472
The Economist (4 April 2015).
473
Gerlis (2014), p. 18.
474
appropriate knowledge and skills; and (7) the fact that art is well suited for money
laundering purposes does not contribute to improving the art market’s reputation as a
serious investment market.475
As regards regulation in other markets, the market for public equity, for instance,
requires investors to disclose essential information, including on how much stock an
investor holds relative to the asset he is buying and also mandates businesses and
individuals recommending investment in certain stocks to legally establish their
independence.476 Taking the practice of insider trading as example, profiting from
non-public information that is likely to influence the price of a certain commodity,
equity or good is usually considered illegal—in the art market, relying and acting on
insider information is prevalent and accepted behaviour.477 For instance, at auction,
dealers are able to bid on works by artists they represent and hence, have a vested
interest in. The sale price achieved might thus not represent the actual market
situation but instead, a dealer’s intention of publicly keeping prices at a certain
level. Furthermore, a dealer representing the artist can, of course, profit from
non-public information.478 In the same spirit, information asymmetries particularly
favour parties with the necessary capital to participate in such deals.479 As regards
art’s performance assessment, it is suggested that the art market is correlated to
wealth in general and that price levels for art reflect the fortunes of its buyers,
irrespective of the market in which these fortunes have been made.480 In particular,
the performance of contemporary art is linked to the performance of equities; even
though the data available to support such a claim is far too limited to be meaning-
ful.481 Consequently, “what may seem to be a lack of correlation may in fact be a
lack of transparency”482 and in this respect, the limited and often subjective infor-
mation available presents the greatest hurdle to any objective assessment of art’s real
returns. The most important category of information comes in the form of auction
sale results, but due to auction houses’ expanding private sale business, their
relevance is shrinking in proportion to the whole market.483 This means that the
data art indices rely on is less representative and consequently, the results are biased
and distorted.
475
Ibid. p. 142f. See also Torcello (2012), p. 20 and Koldehoff and Timm (2020), pp. 252ff.
476
Gerlis (2014), p. 18.
477
Ibid. Definition from Nasdaq, available at http://www.nasdaq.com/investing/glossary/f/front-
running [last visited March 30 2022].
478
Ibid. p. 19. See also the fictional scenario developed by Scott Reyburn for The New York Times
(September 25, 2015).
479
Dornbusch Horowitz (2014), p. 340.
480
Verhage (May 18, 2015).
481
Damodaran (2012), pp. 776 f.
482
Gerlis (2014), p. 21.
483
Ibid. p. 22.
In order to appeal to the “stock-ticker-watching”484 generation of investors and

due to the fact that technology is considered to be able to reduce friction and increase
confidence in the art market, art has increasingly become the subject of more
rigorous classification and analysis: in the early 2000s, auction price databases
such as Artfact, Artnet and Artprice created the first wave of art market transparency
by providing access to historic auction prices in order to demonstrate patterns,
suggest future performance, and provide comparisons with other investments,
while at the same time improving the information asymmetries that have tradition-
ally existed between buyers and sellers in the art market.485
2.5.2 The Role of Art Indices
It may be convenient to look at the art market with the same analytical tools that are
used to assess the stock market. But limited data, transparency issues and the general
structure in which art is traded make it almost impossible to create reliable and
objective performance indices. Nevertheless, there have been continued efforts to
produce art indices that reflect the development of the market. Economists are
exploring whether an analysis of the aggregate price data now available from auction
houses can reveal how a particular feature of an artwork accounts for its sale price.
Especially over the last half century, a growing body of economic literature has
substantially contributed to more knowledge of the risk-return properties of art
portfolios and the correlation between artworks’ characteristics and value.486
Already in the 1960s, art investor Richard Rush provided graphs of art price
movements for several art market genres since the 1920s.487 In 1967, Peter Wilson,
Chairman of Sotheby’s and The Times newspaper created the ‘The Times Sotheby
Index of Fine Art Prices’, a monthly index that listed Sotheby’s auction sale
results.488 In his book The Economics of Taste (1961), Gerhard Reitlinger was the
first to collect auction sales data about the British paintings and drawings market.489
More than two decades later, a study conducted by Frey and Pommerehne in 1989
found that, apart from an aesthetic evaluation of his work, the artist’s nationality and
possibly years since his or her death, the size, style and medium of the work of art,
advertising activities of the gallery, per capita income and the rate of return on
traditional investment portfolios, were determinants of the auction price that account
for about 61% of the variance in prices.490
484
Ibid. p. 31.
485
Deloitte | Art Tactic (2016), p. 22 and Towse and Handke (2013), p. 324.
486
Hulst (2017), p. 3. See also Spaenjers et al. (2015).
487
Rush (1961).
488
Keen (1971).
489
Reitlinger (1961).
490
Frey and Pommerehne (1989), p. 98 f. See also Plattner (1998), p. 16.
Yet, their research was considered as flawed since it did not take past results of the
same artist into account—another important determinant of price. Ever since, these
efforts have benefited from the methodological improvements of other types of
indices which were primarily established in the real estate finance literature.491 For
instance, Mei and Moses (2002)492 extended the repeat sales model with a compre-
hensive collection of auction sales data for the New York market and as a result,
observed a significant increase in the number of repeat sales compared to earlier
studies by William J. Baumol (1986)493 and William N. Goetzmann (1993)494 that
still used the data compiled by Reitlinger.495 The repeat sales model has the
advantage that researchers only need to look at changes in prices over time, without
concerning themselves with each and every (non-observable) characteristic of an
artwork.496 While these indices attempt to bring transparency to the art market, the
first stumbling block is the lack of available sales data: all indices have to rely on
data from just one-half of the art market—the auction market—as data from private
dealers and galleries is not, or hardly, disclosed.497 In addition, indices have also
been criticised for disregarding transaction costs and taxation: transaction costs
include auction fees, insurance and handling costs which, due to their size, signif-
icantly influence the expected return rates. Moreover, most indices only track the
most successful art sales at auction, including artworks that have successfully sold at
auction more than once. Artworks that failed to sell are thereby omitted: for instance,
if ten paintings by the same artist are offered for sale and nine are bought, while one
triples its auction estimate, performance indices would record a successful result that
is at odds with the actual performance. Importantly, according to Mike Moses,
co-founder of the Mei Moses Art Indices, “no art indices take into account all the
art that is never deemed valuable enough to be resold in the first place”.498 In other
words, data from auction sales may provide a large stream of public and reliable
information on prices, but does not come without potential pitfalls: repeat-sale
records fail to capture the price fluctuations of artworks that are in low demand or
out of fashion since auction houses and owners have little incentive to sell such
works in the first place.499
This means that when art indices are used to assess whether art is a good
investment, this assumption is based on data that neglects half of all transactions
(private sales), while the rest of its data (based on the auction market) has a selection
491
Pownall (2016), p. 34.
492
Mei and Moses (2002), pp. 1656–1668.
493
Baumol (1986).
494
Goetzmann (1993), pp. 1370–1376.
495
Mei and Moses (2002), p. 1656; Spaenjers et al. (March 1, 2015) and Goetzmann et al.
(2010), p. 222.
496
Pownall (2016), p. 40.
497
Tully (September 5, 2014a).
498
Ibid.
499
Agnello in Mossetto and Vecco (2002), p. 44.
bias.500 And this adds to the fact that, as shown by the foregoing discussion, prices
on the art market do not follow a certain logic. For instance, researchers suggest that
even the weather might have an impact on people’s mood for purchasing art.501
Nevertheless, institutional investors who must evaluate whether investing in art will
be profitable are still dependent on methods of pooling the available data to quantify
art’s performance. Consequently, despite the essentially non-qualifiable characteris-
tics of art, much effort has recently been spent on creating indices that could
theoretically be compared to other markets.502 However, it is essential to realise
that each index has a different methodology and approach: the Mei Moses Indices,
for instance, rely on repeat sales data from Christie’s and Sotheby’s only—meaning
that solely artworks are included which have been sold at auction more than once—
but do not consider artworks that failed to sell in these sales or were sold by other
auction houses.503 As regards the collection of historic and individual public art sales
prices, Artnet is probably the most comprehensive source with more than ten million
results from 1700 auction houses dating back to 1985.504 In the end, it is question-
able how indices are supposed to give an objective and reliable assessment of art’s
performance. Or, to phrase it in Victor Ginsburgh’s words, economists have done
their best to provide information on the art market and cannot be blamed for not
500
This is acknowledged by Gerlis who describes these mathematically conceived indices as
“towers built on a very shaky foundation”. Moreover, Gerlis suggests that indices simply support
empirical evidence; they do not reveal any information that could not be gathered from following
several auctions and fairs per year and keeping an eye on media coverage. See Gerlis (2014), p. 37.
501
For more information on this specific assumption see De Silva et al. (2012).
Data on weather in London (that is notorious for a high rainfall) was used to examine its
influence on auction prices and the study suggests that particularly sunny days in the winter period
had a significant positive influence on prices, especially on lower priced paintings. In the same
spirit, Pownall and Graddy studied the effect of colour on the value of an artwork. Andy Warhol
prints were the ideal group to work with as many of the images reproduced used different colour
attributes on the same image (for instance, his Mao or Marilyn series). The results found evidence of
darker colours carrying a significant and robust premium than equivalent artworks which were less
intense in colour. Phrased differently, the colour that the eye is least sensitive to is the colour which
is worth the most in terms of price increase per unit of reduction in the RGB colour intensity.
See Pownall and Graddy (2016), p. 420. Historically, colour has been important to the value of
an artwork. Gold and ultramarine blue were more expensive and hence, paintings with these colours
were perceived to be more valuable because of their cost of production. See Etro and Pagani (2012),
pp. 423–447.
502
Gerlis (2014), p. 36.
503
Mei and Moses (2002). See also Maneker (April 28, 2016b). Consequently, the index is biased in
favour of high-quality artworks by established artists as only these works are regularly sold at
auction. This upward bias is confirmed by the following study Anderson et al. (2016), p. 335. The
authors concluded that if transaction costs and unsold works were included in the analysis, the
investment return calculations might in fact be negative.
504
For more information see https://www.artnet.com/price-database/ [last visited March 30 2022].
Similarly, also Blouin Art Sales Index claims to be the leading art price database, dating back to
1922 and giving access to more than six million auction results from 1380 auction houses. A
subscriber can make use of an unlimited number of searches for $199 a year.
extracting information from data they simply do not have.505 As a result, it is not
surprising that the art market still lacks a universally accepted and transparent index
that could be compared to the S&P 500 or the MSCI World Index.
2.5.3 Art-Secured Lending: When Art Becomes Collateral
Banks and other businesses are increasingly willing to lend against art, thereby
answering the growing demand for art-secured loans—another factor in the contem-
plation of art as an asset class.506 An example is the former hedge fund manager
Michael Steinhardt, who secured a $65 million loan from JPMorgan Chase with
20 artworks from his $200 million art collection and other high net worth collectors
such as Steve Cohen, with art collections worth an estimated $1 billion.507 However,
even though art-backed lending is becoming more common, such loans still repre-
sent a rarity. The major problem encountered by the more generalist banks is, even if
they are specialised in private wealth, that the market for art is even more niche and
opaque than the markets for other alternative assets.
In addition, the problem of liquidity also comes back into play: if an artwork
eventually has to be sold to liquidate the investment, there is no guarantee that the
work will fetch the expected price or sell at all.508 While art-secured lending is one of
the sectors that have increased in value since 2014, the majority of wealth managers
(64%) perceive the unregulated nature of the art market as the biggest hurdle to
offering art-secured lending services.509 It is therefore not surprising that banks
prefer to outsource this service in order to better handle and assess the respective
risks, thereby turning themselves into art-lending specialists, such as Art Capital
Group, Montage Finance, PlatinumArt, ArtAssure and Emigrant Bank Fine Art
Service.510 It has already become apparent in the previous analysis that there is
money to be made in the art advisory business by clarifying and making sense of the
market’s peculiarities and it is therefore in this area—where private banking and the
art market merge—that banks serving wealthy clients are expanding. Due to the
uniqueness of artworks and the uncertainty in pricing, banks attach several strings to
borrowing against art: a potential borrower can only expect a loan for about 40 to
505
Ginsburgh (2001).
506
Gerlis (2014), p. 108.
507
It must be considered that loans offered to top collectors are not just backed by art alone, but by
the borrower’s whole portfolio, including securities, houses, and other property. Weiss and
Kazakina (October 18, 2001) and Tully (October 27, 2014b).
508
Gerlis (2014), p. 108.
509
510
Gerlis (2014) p. 108.
50% of the work’s value, while lenders generally do not lend below $500,000. For
instance, in 2013, Citi Private Bank’s minimum loan against art was $5 million.511
Most art-specialised lenders are based in the US where the financing of alternative
assets is a more mature market. Deloitte estimates in its 2016 Art & Finance Report
that the art-secured lending market in the US is expanding rapidly, due to low
interest rates, an expanding art market and an attractive legal environment provided
by the Uniform Commercial Code (UCC), which has been adopted in every state and
allows borrowers to keep possession of the artwork while the loan is still outstand-
ing. In total, the size of the overall art-secured lending market is estimated at between
$15 billion and $19 billion (value of average loans outstanding), having increased by
15–20% annually over the past 5 years.512 Of course, also the leading auction houses
have become active in offering financial and advisory services in an effort to achieve
growth in a business beset by competitive pressure and margin compression.513 The
loans usually offered are twofold: either an advance against a work they are selling or
against the value of a client’s art collection.514 While Christie’s does not operate a
separate financial services department offering an art financing programme,515
Sotheby’s Financial Services is the largest asset-backed art lender and provides a
range of financial solutions to its clients, among which also art-secured loans. In line
with the general structure of such loans, Sotheby’s generally lends about 40–60% of
the total low auction estimate of the collateral and structures most of its loans for
2 years. Importantly, there is no requirement to consign and sell the collateral with
Sotheby’s: in fact, more than two thirds of loans provided are term loans with no
commitment to sell any collateral.516 According to Sotheby’s, the advances of these
loans are unparalleled discretion, speed and “unlike conventional lenders
[Sotheby’s] is focused primarily on your art and not your financial circumstances.
This significantly reduces the amount of information needed from you to process the
loan and allows us to fund the transaction on a timetable that traditional financial
institutions cannot compete with”.517 An illustrative example, which highlights the
risks of this type of lending system, concerns Malaysian financier Jho Low, who was
511
Ibid. p. 111.
512
Deloitte | Art Tactic (2016), p. 18 and 55.
513
Ibid. p. 83.
514
Gerlis (2014), p. 112. While auction houses do not comment on such issues, their catalogues
must always identify the lots in which the auction house has an economic interest, and this would
also include a loan.
515
Under “Other Arrangements” Christie’s states that it “may enter into other arrangements not
involving bids. These include arrangements where Christie’s has given the Seller an advance on the
proceeds of the sale [. . .] Because such arrangements are unrelated to the bidding process they are
not marked with a symbol in the catalogue”. See http://www.christies.com/features/guides/buying-
guide/related-information/financial-information/ [last visited March 30 2022].
516
Ibid.
517
Ibid.
looking to borrow more than $100 million quickly and without having to answer all
the know your customer questions raised by US banks.518
Such a loan was eventually provided by Sotheby’s Financial Services, outside the
regulated financial system and without the scrutiny of regulators. By pledging
17 artworks, valued at between $191 million and $258 million, Low secured a
$107 million loan.519 Shortly after, Low became the subject of a US anti money-
laundering investigation, adding to concerns that auction houses are providing
loopholes for illicit financial transactions: since the borrower is not required to
repay the loan, but instead just sells the collateral, he receives money that appears
to be clean.520 And indeed, since auction houses are primarily interested in the
collateral and not the financial circumstances of its owner, they care less about the
source of the latter’s wealth. According to Mitchell Zuckerman, who started and ran
Sotheby’s Financial Services until 2007, auction houses are more willing to accept
clients with an opaque track record: “just because a client is not creditworthy by
conventional bank standards doesn’t mean that his art collection doesn’t contain
realizable value”.521
In fact, Sotheby’s seems to be fairly disinterested in a borrower’s creditworthi-
ness. In response to the question “what documentation do I need to provide to
Sotheby’s Financial Services to Process the loan?” Sotheby’s answers that “as our
underwriting and diligence focuses mostly on the art itself, we require documents
that allow us to verify the provenance and ownership for the art proposed as
collateral”.522 This means that while banks have to scrutinise the financial circum-
stances of prospective clients, a lengthy process that requires various documentation
such as financial statements and tax returns, these requirements do not apply to
auction houses.523 While Sotheby’s and other boutique lenders are subject to anti
money-laundering regulation, they are not covered by the strict reporting require-
ments of the Bank Secrecy Act or supervised by federal banking regulators. In the
end, it is suggested that that the business of lending against art has never been better.
Even though this business sector is very difficult to quantify, with many participants
not being subject to any public reporting obligations, Sotheby’s annual reports are
probably the closest one can get to year-on-year comparable: in 2015, the gross profit
of its financial services department increased by 56% when compared to figures from
2013.524 Revenue for the finance segment increased 79% to almost $16 million in
518
Kazakina (July 28 2016a).
519
Ibid.
520
Crown and Letzing (July 21, 2016).
521
522
Sotheby’s Financial Services, Your Questions Answered.
523
524
the first quarter of 2015 from the same period a year earlier, while profit surged 41%
to $4.3 million.525
In 2015, Sotheby’s doubled the amount it could lend to make such art loans from
$550 million to more than $1 billion.526 The credit line is provided by a consortium of
lenders including General Electric Capital Corp—Sotheby’s has been a GE Capital
customer since 2009, when its credit facility was $200 million.527 Previously, before
setting up a separate capital structure using borrowed funds, Sotheby’s used its
cashflow to finance its loans. Alongside auction houses and banks, there are also
private institutions such as Borro (Group Holding Limited) which provide a variety of
loans that can be backed with artworks and other valuables such as jewellery, luxury
cars, gold or fine wine.528 The advantage of such an institution is that they provide
nonrecourse and general purpose loans which are secured only against the value of the
art and not against other of the borrower’s assets.529 Borro lends up to $5 million and
its maximum loan-to-value is 75% of the estimate of the artwork’s market value. As
regards storage, all assets must be delivered to Borro and are subsequently stored under
“highly-secure conditions in state-of-the art secure storage facilities”. First, Borro
offers sale advance loans, which allow the borrower to get up to 70% of the estimated
sale price, while Borro manages the sale of the asset at an auction house or to a private
seller. The interest rate on the advanced funds is between 1 and 2%, in addition to a fee
for managing the sale of the artwork which is between 15 and 20% of the final sale
price. A second type of loan offered are bridge loans, which are intended for short-term
funding. Since the asset secures the loan, there are no credit or income checks
performed on the borrower and likewise, Borro does not report information to credit
rating agencies. The fixed interest rate per month is between 3 and 4%. Lastly, Borro
offers term loans of 18 to 36 months, starting at $100,000, with the interest rates being
assessed based on the asset and the term of the loan. Like Borro, Athena Art Finance
Corporation, launched in October 2015 in collaboration with Banque Pictet, is another
institution which provides nonrecourse loans. In contrast to full-recourse loans, which
are also secured by other personal assets, the lender can in the event of default only lay
claim to the art.530 Athena was founded with $280 million of equity capital and offers
loans of at least $1 million, based on a maximum of 50% of the artwork’s low estimate
over a term of 6 months to 7 years, charging an annual interest rate of 7 to 9%.
525
In comparison, the revenue from Sotheby’s agency segment, which includes auction commis-
sions, rose 4% to $128 million. See Kazakina (June 23, 2015).
526
U.S. Securities and Exchange Commission, Current Report Pursuant to Section 13 Or 15 (d) of
the Securities Exchange Act of 1934, June 15, 2015, available at https://www.sec.gov/Archives/
edgar/data/823094/000082309415000030/a8-k_bidxcfamendmentxjune2.htm [last visited March
30 2022].
527
U.S. Securities and Exchange Commission, Current Report Pursuant to Section 13 Or 15 (d) of
the Securities Exchange Act of 1934, September 1, 2009, available at https://www.sec.gov/
Archives/edgar/data/823094/000093041309004579/c58640_8k.htm [last visited March 30 2022].
528
For more information see https://www.borro.com/how-it-works [last visited March 30 2022].
529
Tully (October 27, 2014b).
530
Reyburn (March 4, 2016).
Additionally, Athena also offers an “Auction Purchase Financing Program”, which

lists specific lots that are pre-approved for financing in advance of global sales by
major auction houses.
By relying on this list, the program should become a “highly anticipated, valuable
tool for collectors in advance of future auctions”.531 However, it needs to be considered
that pre-qualification does not guarantee eligibility for financing. However, while these
institutional or private lenders unanimously praise the advantages and the straightfor-
wardness of art as a collateral asset, there are also several risks attached. First, the lender
must be assured that the borrower has legal title to the artwork offered as security,
meaning that he should require proof that the latter is indeed the owner of the respective
work. To provide this evidence of title, the borrower can provide wills and purchase
invoices and the like, while the lender can make use of title insurance to safeguard
against the risk of disputed or faulty title. In addition, the lender is advised to consult
databases such as the Art Loss Register to ensure that the object is not stolen.
A second key issue is authenticity: as will be further analysed in the second Part of
the next chapter, authenticity is a convoluted and extensive concept and the fact that art
is increasingly used as investment vehicle or as collateral adds another concept to the
already existing challenges. The general information given by advisers in the field
usually sounds very straightforward such as: provenance is everything with works of
art. Evidence of authenticity should be fully documented. In the absence of such
documentary evidence, advice should be sought from an acknowledged expert. The
loan documentation should also contain warranties and/or indemnities which would
leave the borrower liable for any inadequacy in the security should the work of art
prove not to be authentic if any security is called upon. Each of these simplistic
statements, however, bears a fallacy: as the next section will show in detail, it is
often impossible to fully document provenance, experts’ opinion can change or can be
contested; all of which leads to lengthy and time-consuming disputes and eventually,
even if the borrower is liable in case the work is inauthentic, this will be of little use in
practice if the loan is not backed by other securities. Here, the advantage advertised by
auction houses’ financial services to focus primarily on the artwork and not the
creditworthiness of its owner becomes very risky: if the artwork used as collateral
proves to be inauthentic, the lender might face a loan default and might not even be
able to take recourse against the borrower. In addition, the issue of valuation and
liquidity is also a very important issue that needs to be considered. While it is complex
to valuate a work of art in the first place, the value is also likely to fluctuate over time
and moreover, it is of importance whether the artwork faces any export restrictions or
is considered to be part of a national heritage.532
531
Ibid.
532
Ibid. In this respect, it is important to keep in mind that also the objects which are considered to
be part of the national heritage can change significantly, the best example being the cultural heritage
legislation passed in Germany in June 2016 (Kulturschutzgesetz), which requires approval in order
to export artworks older than 50 years and priced above €150,000 outside the EU, and an export
permit for works older than 75 years and priced above €300,000 or €340,000 for export within the
EU. Available at http://www.gesetze-im-internet.de/kgsg/.
See also Neuendorf (June 23, 2016).
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29, 40
Chapter 3
Fraud, Forgery and Authentication
3.1 Introduction
Art forgery is often considered the world’s most glamorous crime and it is not
unusual that the media presents its perpetrators in a romantic light. After all, the
damage done mostly affects wealthy individuals in their monetary interests. More-
over, the line between a masterpiece and a forgery is often slender or even invisible
so that cases of forgery frequently go hand in hand with a lot of disagreement and
discussions between the parties involved. Nevertheless, the forging of fine art is very
clearly an economic crime—as there is indeed someone and something victimised:
the specific buyer, who is duped by a forgery, as well as the more abstract harm that
is done to an artist’s reputation when unidentified forgeries corrupt his œuvre.1
However, it is also argued that forgery may not always be an artistic or aesthetic
crime because forgers create works that great artists simply did not get around to
making.2
In particular, if experts describe fake artworks as masterworks, why not think of
them as the masterworks that Rothko, Campendonk, Ernst or Picasso happened not
to have got around to? In a sense, these artworks are by the artists themselves as they
“almost perfectly capture [their] unique contribution to art”.3 In addition, forgeries
should be seen as reminders that great art stems from the idea of artists, not
necessarily their actual hands.4 Over the course of time, many artworks have been
executed by studio assistants—and this not only holds true for artists like Damian
Hirst or Jeff Koons, but would also apply to Titian, Rembrandt and Rubens. The fact
that their works are often the result of the studio workshop does not make less them
1
Charney (2015), p. 17.
2
Gopnik (November 2, 2013).
3
Ibid.
4
Schack (2017) in Weller et al. (eds) (2017), p. 10.
108 3 Fraud, Forgery and Authentication
less expressive of the artists’ ideas and innovations.5 In another regard, forgers can
teach the public to “doubt connoisseurship; the myth [. . .] that certain thoroughbred
experts can smell authentic art at 100 yards”.6
Moreover, they reveal that, perhaps, the whole idea of a unique artistic touch
along with the notion of absolute authenticity may be beside the point in the
understanding of art.7 Before 1500, the issue of forgery was actually not an issue
in Western art: as long as the copy transmitted the same essential content, copies
could stand in perfectly well for earlier works of art. According to Alexander Nagel,
professor of Renaissance art at the Institute of Fine Art in New York, the notion of
artworks as “singularities, as unrepeatable performances by an author” simply did
not exist.8 And again, some of the twentieth century’s most important artists set out
to “undermine ideas of unique, authentic, hand-touched works of art”, basically
“freewheeling when it came to notions of authenticity”.9 From Duchamp’s ready-
made sculptures to Warhol’s Factory works, it is argued that the “art market can’t
stand the slippages such ideas introduce” and insists on selling authentic Duchamp
and Warhol works, which, due to their intended uncertainty, is a challenging
endeavour.10 The history of art forgery is packed with bizarre crime stories that
could easily make the basis for movie scripts. Ironically, many forgers were consid-
ered outlandish and charismatic enough to become famous in their own right and for
their own creations.11 According to Noah Charney, art forgers, from antiquity to
today, are generally driven by a mixture of motives that range from genius, pride,
revenge, fame and crime to opportunism, money and power.12 To art critics, the
forger is a mediocre artist seeking revenge and to the public he is often a folk hero.13
And indeed, forgers are often artists who previously failed in their own career when
their output did not find the favour of art critics and experts. Therefore, for an artist
5
Gopnik (November 2, 2013). According to Gopnik, a “faker could be considered a faithful
assistant of the artists who happened to arrive after they’d died”.
6
Ibid.
7
And indeed, reality may not always be black or white. According to Demarsin, “the grey zone
between genuine and fake is an area bristling with terminological pitfalls”. Demarsin and Schrage
(2008), p. 562.
8
Alexander Nagel, History lessons: How medieval art can help us rethink the exhibition industry,
p. 47, available at https://www.ifa.nyu.edu/people/faculty/nagel_PDFs/ExhibitionIndustry.pdf [last
9
Ibid.
10
The Economist (24 March 2010) and Dutton (2009), pp. 164ff. Duchamp’s urinal titled Fountain
is often described as one of the most important works of art of the twentieth century. Yet, the mass-
produced ready-made questions notions of authenticity as Duchamp signed it “R. Mutt” in 1917.
Now, years after the artist’s death, concerns about legitimacy come up after unauthorised urinals
were discovered in Italy. See also Keats (2013), pp. 162ff.
11
For instance, the works of Han van Meegeren, Geert Jan Jansen and Wolfgang Beltracchi were
after their exposure shown in various exhibitions.
12
Charney (2015), p. 17.
13
Wynne (2006), p. 2.
3.1 Introduction 109
with talent and few scruples, forgery “not only offers riches, but a clandestine
celebrity”.14
To know that one’s painting is exhibited in a museum or is offered at a prestigious
auction sale, fair or gallery exhibition is the finest form of revenge. Once authenti-
cated and featured in such institutions, there is little chance that a forgery will ever be
unmasked. Théodore Rousseau once remarked that “we should all realise that we can
only talk about the bad forgeries, the ones that have been detected; the good ones are
still hanging on the walls”.15 As will be seen in the next section, the detection of
forgeries may occur due to the strangest incidents or simply by chance. Of course,
the attribution to a well-known and established artist influences an artwork’s value
enormously and hence, there is a temptation to exaggerate attributions which are less
than certain, or to create forgeries that can be sold for a solid profit. Therefore, before
going into detail, it is important to recall that the notion of authenticity has been
interpreted rather flexibly over the past centuries: for apprentices in artists’ studios, it
was common practice for apprentices to prepare the main layout of a painting, with
the master only working on the more refined features of the composition. And yet,
the artworks are commonly attributed to the master himself. To make matters more
complex, it was established practice that the studio would create and sell multiple
copies of the same painting if this particular composition and style had proven to be
successful with clients.
Apart from intentional forgeries, these historical occurrences still pose problems
for the definitive identification and attribution of authorship which today’s market
requires and expects. However, with the colossal rise in prices of modern and
contemporary art in particular, this genre has also become the victim of fraudulent
activities. Therefore, the first part of this chapter focuses on forgery scandals, past
and present, which have each shaken the art market to a hitherto unknown extent.
The second part will deal with the relationship between forgery and authentication.
For instance, art historian Max J. Friedländer once claimed that in the long run, the
eye of the connoisseur always trumps the hand of the forger. This is due to the fact
that, according to Friedländer, fakes reflect the tastes of their moment of creation and
that once contemporary tastes move on, forgeries are left standing in the dust.16
Consequently, “since every epoch acquires fresh eyes”, he argues that a once
successful imitation would no longer pass muster with the next generation’s
experts.17 Friedländer thus never acknowledged the possibility of undetected
fakes—an assumption that has ever since been proven wrong by many cases.
Interestingly, Friedländer himself was involved in the authentication and marketing
14
Ibid. Wynne states that “it is difficult not to admire the forger and to feel a surge of joy at the
thought of a critic waxing lyrical over the glories of a seventeenth-century masterpiece on which the
paint has barely dried”.
15
Ibid. and Marlowe (2013).
16
According to Friedländer, a forger is an “impostor and a child of his time”. See Friedländer (1942)
in Spencer (2004c), p. 40.
17
Ibid.
of The Lace Maker, a painting that was attributed to Johannes Vermeer, but was in
fact yet another forgery by Han van Meegeren, famous for his paintings in the style
of Vermeer.
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
Han van Meegeren (1889–1947), one of the most ingenious art forgers of the
twentieth century is said to have created the most dramatic art scam of that time:
first believed to be a Nazi collaborator, he was later considered a national hero when
it was revealed that he had duped Reichsmarschall Hermann Göring, who was
notorious for amassing a vast collection of stolen masterworks.18 In 1945, van
Meegeren was arrested and charged with collaboration and high treason.19 During
the Nazi occupation of the Netherlands, the painting Christ with the Woman Taken in
Adultery, attributed to Vermeer, was sold to Göring and when the Allied Art
Commission found records of the sale from van Meegeren, he was put on trial for
treason—punishable by execution. Faced with the threat of death, van Meegeren
decided to reveal that the alleged Vermeer was in fact a forgery he had created.20
Realising that his life depended on the plausibility of his story, he also admitted that
another one of his Vermeers had been purchased by the Boijmans van Beuningen
Museum in Rotterdam before the war.21 The painting in question, The Supper at
Emmaus imitated the style of the “young Vermeer” and according to Abraham
Bredius, the leading authority on Vermeer, the painting was not only a great lost
work, but also the most important painting of Vermeer’s œuvre.22 Since an attribu-
tion by Bredius would silence other critics, no matter how atypical the work in
question, the unveiling of the painting at the Museum Boijmans in 1938 was a major
media event.23 Bredius wrote in the Burlington Magazine in November 1937 that:
18
Keats (2013), p. 69, Demarsin, Proefschrift (2008a), p. 44 and Demarsin, Handel in
Kunstvoorwerpen (2008c), p. 43ff. In fact, van Meegeren was the second most popular man in
the Netherlands, after the prime minister and citizens even asked to build a statue in his honour.
19
Dutton (2005), p. 261.
20
Dolnick (2008), pp. 7f. and Jones (1990), p. 15.
Therefore, it is argued that van Meegeren was exposed “not because he ceased to fool people but
because he fooled one art lover too many, Hermann Goering.” See Jones (1990), p. 15 citing
M. Kirby Talley Jr., curator of Old Masters paintings for the Rijksdienst Beeidende Kunst, The
Hague.
21
Charney (2015), p. 94 and Nici (2015), pp. 174f.
22
Ibid. p. 95 and Wynne (2006), pp. 135f.
23
Ibid. Bredius’s decisions were considered to be “as capricious as they were confident”.
3.2 Lessons from the Past: An Overview of Some of the Most Important. . . 111
[. . .] it is a wonderful moment in the life of a lover of art when he finds himself suddenly
confronted with a hitherto unknown painting by a great master, untouched, on the original
canvas, and without any restoration, just as it left the painter’s studio. And what a picture!
Neither the beautiful signature. . .nor the pointillés on the bread which Christ is blessing, is
necessary to convince us that what we have here - I am inclined to say - the masterpiece of
Johannes Vermeer of Delft . . . quite different from all his other paintings and yet every inch
a Vermeer. In no other picture by the great master of Delft do we find such sentiment, such a
profound understanding of the Bible story - a sentiment so nobly human expressed through
the medium of high art.24
On the strength of Bredius’s eminence, the museum had purchased the work for
520,000 guilders, equivalent to about $3.9 million today and made it the centrepiece
of a 450-painting exhibition of the Dutch Golden Age.25 The success of this forgery
led van Meegeren to continue his fakery: in total, his forgeries earned him the
equivalent of $60 million today.26 It is striking, however, that van Meegeren’s
forgeries look nothing like genuine Vermeers.27 The forgeries are in fact “too
large, too painterly and too clunky to match Vermeer’s style” or simply too “gro-
tesquely ugly and unpleasant paintings”.28 Moreover, van Meegeren painted reli-
gious scenes, but none are extant in Vermeer’s œuvre. However, Bredius and other
scholars supported a theory that Vermeer went through an early period of religious
images inspired by Caravaggio—and of course, Bredius was pleased to discover a
painting that ostensibly proved his theory correct and happily authenticated van
Meegeren’s forgery.29 The subject and the fact that it was considered a work from a
very early period in his career is said to have helped mask van Meegeren’s own
technical and expressive inadequacies.
Nowadays, the differences are considered to be so obvious that even a layman can
hardly believe that one of the best-qualified experts could have taken a Van
Meegeren for a Vermeer.30 While the general level of aesthetic sensibility has hardly
risen to a degree that a layman of today is better than an expert in the 1940s, it is the
quantity of information available today that makes discrimination easier.31 At the
time, Bredius was confronted with an unfamiliar painting and had to decide if it
could possibly be attributed to Vermeer. And with every Van Meegeren being added
to Vermeer’s oeuvre, the criteria for acceptance were modified and it became
Since van Meegeren did not want to approach Bredius directly, he conspired with Dr. G.A. Boon,
a lawyer and former member of the Dutch parliament. Together, they concocted provenance which
Boon then presented to Bredius. See Wynne (2006), pp. 139ff.
24
See Bredius (1937), pp. 210f and Jones (1990), p. 15.
25
Keats (2013), p. 93. See also Charney (2015), p. 98.
The discovery of the painting was described as “the most important art historical event of the
century” by fellow scholar Frithjof van Thienen.
26
Davies (5 August 2006).
27
Van Meegeren’s forgeries are listed as an appendix in Blankert (1980), pp. 88–94.
28
Charney (2015), p. 98. See further Jones (1990), p. 15.
29
Ibid.
30
Goodman (1976), p. 110.
31
Ibid.
inevitable that more Van Meegerens were subsequently mistaken for Vermeers.
However, it is suggested that “the very man who had sealed Van Meegeren’s success
as a forger proved a deadly nemesis in the courtroom”.32 Called as a witness at van
Meegeren’s trial, Bredius vehemently denied the possibly that the painting he
authenticated could be a forgery to save his reputation. Hence, van Meegeren gave
a step-by-step recipe for his forgeries, but was still not believed.33 It was then that the
trial turned truly cinematic when one of the officers proposed that van Meegeren
should paint a copy of the respective painting in order to prove his skill and ability.34
Van Meegeren refused to paint a mere copy and instead, insisted on painting yet
another “Vermeer” painting, Jesus among the Doctors. As a result, the charges were
changed from treason to fraud and van Meegeren was sentenced to one-year
imprisonment. Even though van Meegeren died in prison, a gallery in Haarlem
eventually held an exhibition in 1958 showing his own paintings and drawings.35
Even after the trial, some experts believed that the “Vermeers” which van Meegeren
had revealed as his forgeries could in fact be authentic. These experts claimed that
Paul Coremans, the court-appointed researcher on the case, failed in his analysis.36
For instance, Coremans found out that the paint layer contained a synthetic binder
that was not available until 1907. However, new analyses in the 1950s had revealed
that also natural binders can cause the same chemical reaction as synthetic ones.
Therefore, van Beuningen decided to sue Coremans to rehabilitate his painting and
claimed damages for the harm Coremans caused when he declared the work to be a
forgery. However, the court followed the judgment in the initial forgery case and
dismissed van Beuningen’s claim.
3.2.2 Tom Keating
Tom Keating (1917–1984) began his career as an art forger and ended it as a
television celebrity. When Keating was unable to make a living from selling his
own works, he turned to art forgery as a protest against the art trade.37 Interestingly,
Keating included time bombs in his forgeries; clues that would eventually prove a
32
Charney (2015), p. 98 and Vitta in Blankert (1980), p. 90.
33
Charney (2015), p. 99, Keats (2013), p. 81, Demarsin, Proefschift (2008a), p. 44, and Demarsin,
Handel in kunstvoorwerpen, p. 43. Van Meegeren was very careful to choose the same natural
pigments that were also used by Vermeer and concocted a recipe in order to speed up the aging and
drying process: mixing the pigments with Bakelite and subsequently baking the canvas.
34
Charney (2015), p. 100.
35
Der Spiegel, Van Meegeren: Echt? 40/1958, 10 January 1958.
36
Ibid.
37
Charney (2015), p. 115f, Keazor (2015), p. 21 and Jones (1990), pp. 240f. See also Merryman
(2009), p. 483.
painting’s inauthenticity.38 In order to catch out and prove experts wrong, Keating
deliberately placed hoaxes or anachronisms such as twentieth century objects in a
seventeenth century painting or under-painted rude words in lead white, to be
discovered in an X-ray analysis.39 In total, Keating created more than 2000 forgeries
of about 100 artists ranging from Modigliani, Titian, Rembrandt, and Fragonard to
Renoir and Degas.40 In 1976, however, one of his ticking time bombs went off.41 A
regional auctioneer had offered several watercolours by Samuel Palmer, which
experts openly suspected to be counterfeit in a newspaper article in The Times of
London.42 Subsequently, an acquaintance of Keating blackmailed him and
demanded £7000, or else he would reveal his name to the police and the press.
Eventually, Keating gave in and confessed to the forgeries.43 However, since the
Palmers were not sold yet, no charges could be brought against him. It was only
7 years later that he was charged with conspiracy to defraud, but the case was
dropped due to his failing health. Starting in 1982, Keating presented a television
program in which he taught viewers the skills necessary to forge Old Master
paintings.44 After that, collectors started buying his forgeries, labelled as such, and
in 1984, even Christie’s auctioned 204 of his works.45
3.2.3 Eric Hebborn
When critics did not appreciate his own paintings, Eric Hebborn (1934–1996), called
“an old master at the wrong time”, began to create drawings in the style of Old
Masters like Rubens, Tiepolo, Breughel, Piranesi, Corot and Van Dyck.46 After
noted art historians declared the works to be authentic and technically brilliant, they
were sold through Christie’s, Sotheby’s and the leading Old Master gallery Colnaghi
to the British Museum, the National Gallery in Washington and many important
private collections. The profit made from about 1000 forgeries is estimated at $30
38
Also, Shaun Greenhalgh (born 1961) had always put a “tell” in his forgeries, a fault that should be
obvious to the trained eye. However, those mistakes were always blown away by the provenance he
had fabricated for the pieces. See Charney (2015), pp. 108f.
39
Ibid. p. 116. At times, he would even add a layer of glycerine beneath the paint so that, if his
forgery was ever cleaned, the glycerine would react and dissolve the paint above it.
40
Keats (December 13, 2012b, c).
41
Ibid.
42
Keazor (2015), p. 21.
43
Ibid. Keating stressed he “flooded the market with the ‘work’ of Palmer and many others, not for
gain, but simply as a protest against the merchants [. . .] Quite frankly, and with, I trust, due
modesty, I cannot imagine how anyone could begin to believe that the crude daubs being marketed
as Samuel Palmer’s were authentic”.
44
Keazor (2015), p. 22.
45
BBC News, ‘Fake Monet’ put under the hammer, 24 January 2008.
46
Alberge (24 August 2015) and Keats (2013), p. 93. See also Charney (2015), pp. 100ff.
million.47 It was only when the National Gallery of Art in Washington DC purchased
two of his forgeries from Colnaghi and discovered that they were executed on the
same kind of paper, did Hebborn’s activities become suspicious. The panic that
subsequently set in caused the London market in Old Master drawings to temporarily
crash.48 In 1984, Hebborn confessed to a number of forgeries and in his autobiog-
raphy Drawn to Trouble, started to assault art experts, critics and dealers for their
pseudo-expertise.49 He exposed numerous fakes in public collections and also
named the experts and dealers he had duped.50 Furthermore, he threatened to flood
the London art market with 500 forgeries and simply claiming to have made
500 forgeries was enough to “throw art history into turmoil”.51 Hebborn was very
knowledgeable about materials and possessed an extremely adaptable mimetic
adaptability with which he effectively imitated an artist’s style. Consequently,
although Colnaghi knew that the drawings had come from Hebborn, they could
not forensically prove his fakery: the paper and ink were genuinely antique after
all.52 Since pure connoisseurship was not going to be decisive in court and unless
Colnaghi could prove their charges otherwise, their public accusation of Hebborn
would expose them to a libel suit. Hence, Hebborn never stood trial and could
continue to sell his forgeries through intermediaries. In 1995, Hebborn published
The Art Forger’s Handbook, a set of instructions on how to forge and market
drawings from the European tradition.53 Hebborn succeeded in fooling world-
renowned experts such as Sir Anthony Blunt, the director of the Courtauld Institute
and surveyor of the British Royal Family’s art collection. It remains unknown
whether Blunt knowingly collaborated with Hebborn or whether he was genuinely
fooled.54 Hebborn is considered to be the most influential of all modern forgers since
he was as careful about the research and details as he was artistically skilful and
decided to leave detailed accounts of his methods and guides for aspiring forgers.55
47
Dutton (1996), available at https://aesthetics-online.org/page/DuttonForger [last visited March
30 2022].
48
Ibid.
49
Alberge (August 24, 2015), and Keats (2013), p. 104.
50
Keats (2013), p. 104.
51
Ibid. p. 107. Hebborn also claimed that several masterworks in public collections were in fact his
forgeries.
52
Keats (November 7, 2012a, c) and Charney (2015), p. 103. Hebborn knew that, even if his
forgeries were scientifically examined, they could defeat most of the testing mechanisms. In fact, he
chose the artists to forge based on what material was available: if he had access to blank pages from
a seventeenth century Dutch book, then he would choose a seventeenth century artist to replicate.
53
Frankfurter Allgemeine Zeitung (December 1997), p. 31.
54
Charney (2015), p. 107.
55
Ibid.
3.2.4 Elmyr de Hory
Elmyr de Hory (1906–1976) is said to have sold over 1000 forgeries in the style of
Matisse, Modigliani, and Renoir for as much as an equivalent of $50 million today.56
De Hory has become a real celebrity from Clifford Irving’s book Fake! The Story of
Elmyr de Hory the Greatest Art Forger of Our Time (1969), the documentary film F
for Fake (1974) by Orson Welles and Mark Forgy’s biography The Forger’s
Apprentice: Life With the World’s Most Notorious Artist (2012).57 In fact, his
works have become so valuable that forged de Hory forgeries (fake fakes) have
appeared on the market. At first, de Hory had tried to make an honest living as an
artist in Paris but soon discovered that he was more successful at copying the style of
noted painters. By the 1960s, the quality of de Hory’s work began to suffer so that
several galleries became suspicious and alerted Interpol. In 1968, de Hory’s accom-
plices were apprehended on charges of cheque fraud. However, de Hory was never
charged with forgery because the court did not find evidence that he had ever created
forgeries. The life and story of de Hory is characterised by a lack of historical
evidence that invites much suspicion.58
This continues to aid the legend which de Hory constructed around his life in
order to obfuscate the identification of works he really faked.59 It is estimated in the
catalogue for de Hory’s 2010 retrospective at the Hillstrom Art Museum that up to
90 percent of his forgeries remain undetected.60 In what seems to be an anticipation
of the methods of John Myatt and John Drewe, de Hory also manipulated publica-
tions and catalogues: taking advantage of the fact that in past times, illustrations were
merely glued and not printed in exhibition catalogues, de Hory exchanged the
original illustrations with his forgeries and created the impression that the respective
works had already been shown in the context of these exhibitions.61
3.2.5 Geert Jan Jansen
Geert Jan Jansen (born 1943) is yet another master forger whose career was not cut
short by an expert’s eye, but rather by a spelling mistake in a certificate of authen-
ticity. Jansen admitted to having forged thousands of paintings and drawings by
56
Kahn (April 7, 2011), Demarsin, Proefschrift (2008a, b), p. 44 and Demarsin, Handel in
kunstvoorwerpen, p. 43. See also Keazor (2015), pp. 216ff.
57
Jackman (2003), pp. 55ff, and Keats (2013), pp. 131ff.
See also Gollin (19 November 1994), Demarsin, Proefschrift (2008a), p. 45, and Demarsin,
Handel in kunstvoorwerpen, p. 45.
58
For a psychological and sociological analysis of Elmyr de Hory see Scherf (2011).
59
Strauss (2013) Chapter 16 and Ragai (2015), p. 191.
60
Keats (2013), p. 131.
61
Ibid. p. 223.
more than 40 artists, including Picasso, Matisse, Chagall, Dufy, Miró, Appel and de
Kooning.62 Preceding his career as an art forger, Jansen had his own gallery. When
his business was going badly, he began to upgrade Karel Appel posters with forged
signatures that would turn them into more valuable limited editions. Tempted by this
success, Jansen started his forgery activities, creating paintings in the style of well-
known and lucrative artists. Among his first forgeries was a gouache by Karel Appel
which Jansen consigned to a London-based auction house.63 After Karel Appel
himself authenticated the work, it was sold for a record price at the time. According
to Jansen, his motive was the “excitement of mastering an artist’s style” and it was
not until the early 1990s that his scam was uncovered. Being offered several works
by Jansen, a specialist of the auction house Karl & Faber detected a misspelling in an
alleged Chagall’s certificate of authenticity.64 The Comité Chagall confirmed that
the certificate was false as and that the painting was an “exceedingly good forg-
ery”.65 The police traced the work back to Jansen and found more than 1600 forged
paintings at his estate in France. Despite this immense discovery, the case took
6 years to come to trial because none of Jansen’s victims were willing to give
evidence.66 Even though the French authorities threatened to charge the buyers as
accessories if they refused to press charges, no one replied or cooperated. In 2000,
the French public prosecutor was finally able to bring a case against Jansen: since
most of the charges were dropped and only two buyers were willing to testify, Jansen
was sentenced to 1 year in prison and 4 years’ suspended sentence.67 Ironically, the
Dutch public prosecutor had unsuccessfully tried the same 10 years earlier and since
there was no complainant to press charges, he offered Jansen immunity from
prosecution if he would undertake not to produce forgeries for 3 years. This incident
highlights just how helpless the authorities were in proving their case against Jansen.
It is estimated that Jansen made about €10 million from his forgeries, and nowadays,
he is a welcome guest on the lecture circuit, signing copies of his biography
Magenta: avonturen van een meestervervalser.68 Moreover, Jansen has become a
famous artist in his own right, with his forgeries and own works being exhibited all
over Europe.69
62
Wynne (2006), p. 4 and Demarsin and Schrage (2008), p. 561.
63
Wynne (2006), p. 4.
64
Jansen had misspelled the French “environ” (around) with an additional “s”.
65
Wynne (2006), p. 5.
66
Colin (26 September 2000).
67
Ibid. and Wynne (2006), p. 7.
68
Jansen (1998). See also Demarsin, Handel in kunstvoorwerpen, p. 47.
69
In 2015, his works were exhibited at the Metropolitan Gallery in Hamburg and in Bonn and Sylt
in 2016.
3.2.6 Ely Sakhai
Ely Sakhai’s (born 1952) is another gallery owner turned art forger. In the 1970s and
80s he opened three small galleries in New York and soon became a well-respected
member of the Long Island Community. However, in 2000 he was arrested on
charges of eight counts of mail and wire fraud stemming from his involvement in
an international art forgery scheme that spanned approximately 20 years and grossed
$3.5 million.70 According to the United States Attorney, Sakhai bought lesser-
known works and had them copied by Chinese artists.71 He would then sell the
copies together with the genuine certificates of authenticity to Asian collectors, who
were known to be particularly reliant upon certificates of authenticity and hence, less
likely to commission experts from Europe to authenticate the paintings.72 Later,
Sakhai would obtain new certificates of authenticity for the original works and sell
them to galleries and auction houses in New York and London. For instance, he
bought Chagall’s La Nappe Mauve at Christie’s in 1990 for $312,000 and sold it to a
Tokyo collector for $514,000 in 1993.73 After the painting switched hands a few
times, it was put up for auction at Galerie Koller in Zürich. However, the auction
house’s director, Cyril Koller, doubted its authenticity and faxed the work’s certif-
icate of authenticity to the Comité Chagall—which verified it. Since the certificate
itself was genuine, Koller unknowingly uncovered the scheme: namely that inau-
thentic paintings were sold with original certificates of authenticity. And indeed,
Sakhai later sold the original La Nappe Mauve in 1999 at Christie’s for $340,000—
with confidence, since it was the authentic work after all. It is obvious that the
existence of twin paintings was a major risk—one which eventually caused Sakhai’s
downfall. And indeed, this scheme worked well until May 2000 when the surreal
situation emerged that both Christie’s and Sotheby’s in New York were offering the
very same painting, Paul Gaugin’s Vase de Fleurs (Lilas) at the same time.74
The Wildenstein Institute in Paris later confirmed that the painting consigned to
Christie’s was a forgery. Christie’s then had to withdraw their catalogue from the
printers and informed the painting’s owners Gallery Muse in Tokyo. Meanwhile, the
original was sold at Sotheby’s and Sakhai received $310,000 as proceeds from the
sale, not knowing that the money was traced by the FBI.75 In addition, the FBI had
also traced the history of the fake Gauguin and discovered that the original source
was also none other than Sakhai. In 2004, Sakhai pleaded guilty and was sentenced
70
United States Attorney Sothern District of New York, Press Release, March 10, 2004. Available
at https://web.archive.org/web/20140313093621/http://www.justice.gov/usao/nys/pressreleases/
March04/sakhaicomplaintpr.pdf [last visited March 30 2022].
71
Ibid.
72
In the 1980s, Tokyo collectors developed an enormous appetite for Impressionist works, initiating
what is referred to as the “Tokyo bubble”.
73
Thompson (March 8, 2004).
74
Bennett (12 March 2004).
75
Ibid.
to 41 months in prison, fined $12.5 million and ordered to forfeit 11 authentic works
of art.76 It was pure fluke that Sakhai, after having kept the original work for years, as
well as the unwitting owner of the forgery which had changed hands several times,
decided to sell the paintings just at the same time and at the same place, in Christie’s
and Sotheby’s New York auctions in May 2000. Even though the rivalry between the
houses is legendary, it surely must have come as a surprise to find out that they were
both selling the same painting. But for that coincidence, the forgery might never
have been detected. Just as with the Gauguin, Sakhai had focused on little-known
“middle market” works by modern masters such as Modigliani, Monet, Chagall,
Klee and Renoir that could change hands without much fanfare and for which
auction house economics simply do not lavish days on researching their history.77
It is argued that Sakhai’s scheme was in fact a very clever one that exploited the
frailties of the art marketplace: he knew that very few people would be willing to
speak up and call a fake a fake, especially if they were in far-off places in Asia and
too humiliated to raise a fuss.78 Comparable to the situation in the Jansen case,
virtually no one was willing to testify, not even as the extent of his scheme was
revealed. In the US, auction houses were beginning to cast a suspicious eye toward
Sakhai when Tokyo collectors began to phone them, claiming that they owned the
same paintings that were being offered at auction. But there was not much to be done
since Sakhai was offering the genuine works. Therefore, it took the FBI more than
5 years of investigations before they were able to charge Sakhai.79 However, it is
unlikely that a plot of this sort could work again. Since the early 1990s, communi-
cation has changed drastically and with every gallery having a website and each
auction house publishing their catalogues online, the same painting being in two
places at the same time would be detected much more quickly. To pull such a scheme
off today, a forger would have to avoid auction houses altogether and to sell the
genuine “twin work” through private deals.
3.2.7 John Myatt
Just like Wolfgang Beltracchi, John Myatt (born 1945) is also considered to be the
art forger who perpetrated “the biggest art fraud of the 20th century”. Together with
the art dealer John Drewe, he sold about 200 forgeries in the style of well-known
artists like Chagall, Dubuffet, Giacometti, Matisse and Nicholson to reputable
76
United States Attorney Southern District of New York, Press Release, July 6, 2005, available at
https://web.archive.org/web/20121008110054/http://www.justice.gov/usao/nys/pressreleases/
July05/sakhaisentence.pdf [last visited March 30 2022] and Preston (December 14, 2004).
77
Ibid.
78
Ibid.
79
Thompson (March 8, 2004). To this day, it is unknown who in fact created the forgeries.
dealers and auction houses for a profit of approximately €25 million.80 Comparable
to the history of other forgers, Myatt was also a talented artist: he produced “genuine
fakes”, painted in the style of famous artists, but was unable to get them sold. It was
only when John Drewe, a regular customer, managed to re-sell one of the “genuine
fakes” as an original “Albert Gleizes” for £25,000 at Christie’s, that Myatt became a
willing accomplice to Drewe’s fraud.81 In 1995, Myatt was arrested by Scotland
Yard and confessed to the fraud, stating that he had used easily detectable household
emulsion paint and K-Y Jelly, a water-based lubricant in order to create a mixture
that dried quickly—but one that was hardly reminiscent of the original pigments.82
Myatt was eventually sentenced to 1 year in prison for conspiracy to defraud. Drewe,
on the other hand, was responsible for selling the artworks and thus, had to create
plausible provenances: by “systemically infiltrating some of the most security-
conscious art archives in the world, altering the provenances of genuine paintings
to establish a lineage making way for Myatt’s mostly unexceptional forgeries”,
Drewe was able to endow the works with instant heritage.83 Since Drewe changed
and fabricated so many records at both the Victoria and Albert Museum and the Tate,
even their directors admitted that they may never know how much of their collection
has been corrupted.84 And Drewe’s work must have indeed been sophisticated—
how else to explain that paintings made from household paint and K-Y Jelly could be
passed off as oil paintings by Impressionist and modern masters? Yet, when one of
Myatt’s “Giacomettis” was analysed by a conservator at MOMA, the report was
“inconclusive” even though it was painted in an emulsion paint not invented until the
mid-60s, a decade later than the alleged date of creation.85
Obviously, if forgers are as successful as Myatt and Drewe, it is not one single
person or institution that is incapable; it is the whole system that has failed. Is was
therefore argued that this manipulation of the system, i.e. the corruption of archives,
was at least as troubling as the forgeries themselves and that it says less about
Drewe’s own brilliance “than about the readiness - if not the willingness - of the art
world to be deceived”.86 Interestingly, the same phrase was used by the judge in the
Beltracchi case: the court considered the readiness and willingness with which the
market accepted Beltracchi’s forgeries and fabricated provenance as a factor that had
80
Jacques (August 2, 2014), Salisbury and Sujo (2010).
81
Salisbury and Sujo (2010), pp. 262ff. The reason for this was rather personal: after his wife
divorced him, Myatt had to support his children as a single parent - and forgery was a lucrative
business that allowed him to stay home and raise his children.
82
Landesman (July 18, 1999). Drewe left incriminating evidence with his former girlfriend who
started to blackmail him. This eventually led to Myatt’s confession.
83
Leach (2004), p. 290.
84
Obviously, this makes auction houses and dealers’ reasoning that they diligently checked the
respective provenance essentially useless.
85
Ibid. The same issue arose in the Beltracchi case. Even though conservators discovered anach-
ronistic materials in a “Campendonk” painting, their report was “inconclusive”.
86
Ibid.
certainly eased his scheme.87 Moreover, commentators on the Myatt case concluded
that this scandal not only upset the market, but it also exposed the art industry “as its
own worst enemy: too reliant on sources of authenticity that are vulnerable to
manipulation and riddled with conflicts of interest that invite corruption”.88
3.2.8 Interim Conclusion
There are several common features that pervade these cases: it seems to be the little
things that eventually caused the forgers’ downfall. The detection in the Sakhai and
van Meegeren cases might have never come about, and their schemes might have
unravelled harmlessly, had there been just a tiny change at any step along the way.
But in each of the cases it did happen and almost inevitably, similar things will
happen again. Yet, underlying all these specific examples, a deeper question lurks.
At trial, van Meegeren stated that “yesterday this picture was worth millions of
guilders, and experts and art lovers would come from all over the world and pay
money to see it. Today, it is worth nothing, and nobody would cross the street to see
it for free. But the picture has not changed. What has?”89
According to Goodman, it is the correct information now at hand that makes the
discrimination easier. At the time, Bredius was presented with a single unfamiliar
picture and had to decide whether it was enough like known Vermeers to be by the
artist. And every time a van Meegeren was added to the œuvre accepted as Vermeers,
the criteria for acceptance were modified.90 In other words, if we value a work of art
for the aesthetic pleasure to be gained from it, then why do we value a successfully
deceptive fake inferior to the real thing? Conscious of this problem, many have
attempted to find answers, and some began by denying authorship, stating that
authorship leaves a work’s beauty unaffected.91 However, it is evident that aesthetic
appreciation is not the only motor of the art market. When an artwork is revealed as a
fake, its physical appearance remains unaltered but it loses its “value as relic”, its
direct link to the hand of a painter of genius and ceases to provide status to its
owner.92 According to philosopher Alfred Lessing, Vermeer was not only famous
87
Cf. LG Köln, Case 117 Js 407/10, judgment of 27 October 2011. See further Koldehoff and Timm
(2012), pp. 183ff.
88
Ibid.
89
Dolnick (2008), p. 291.
90
Goodman (1987) in Margolis (1987), p. 267.
91
Jones (1990), p. 15.
92
Ibid. and Ragai (2015), p. 180. If a forgery is revealed, the viewers’ mindset changes: the observer
will suddenly feel deprived of the “window into the artist’s interior world”, with the painting losing
a large part of its hold.
because he painted beautiful pictures, but for something else, namely that he painted
in a certain manner at a certain time in the history and development of art.93
Hence, the way a product was made is of importance and every forger has the
unfair advantage of working from someone else’s model. In addition, it is argued that
the art market remains little changed from the days of van Meegeren’s, Hebborn’s or
Myatt’s fakery. In fact, the loopholes that allowed those forgers to deploy their work
into private and public collections are the same pathways that facilitate present-day
forgery. According to Marlowe, it has become evident that neither an artwork’s long
tenure in a major collection nor its long-standing prominence in the historiography
can guarantee the correctness of connoisseurial attributions.94 This leads to the
question whether “the fact that multiple generations of scholars have looked at an
artwork carefully without questioning its attribution prove[s] that the attribution is
correct, or does it prove the conservative, tradition-bound nature of scholarly
disciplines?”95 Fakes teach us the fallibility of experts: none of the cases has been
included because it deceived an untutored layman.96 Instead, most forgeries were
authenticated numerous times: on initial purchase by a leading scholar, on re-sale by
a dealer or auction house and on acquisition by a collector or a museum. According
to Whitney Balliett, a critic “is a bundle of biases held loosely together by a sense of
taste”.97 Nowhere is this more evident than in Bredius’s decision not to have The
Supper at Emmaus submitted for X-ray and chemical analysis, “not out of negli-
gence, but because of his absolute confidence in his instinctive ability to tell a
masterpiece from a forgery”.98 The same applies to Werner Spies in the Beltracchi
case and the continuing success of forgers throughout the twentieth century is
testament to the fact that connoisseurship alone cannot live up to careful and skilful
forgers.
It is often claimed that an expert’s eye will “spot an anachronistic detail the
hesitancy of the forger’s hand compared to the assured spontaneity of the artist.”99
And yet, forgers like Hebborn, Jansen or Beltracchi have been praised for their
ability to mimic artists’ styles perfectly, creating forgeries that do not show anach-
ronistic details or the “hesitancy of the forger’s hand”. After all, the forgeries of John
Myatt, for instance, could have been easily detected—he used household paint and
K-Y Jelly after all. But together with inventive ideas on how to construct credible
provenances, they caused experts to not even feel the need to have their opinions and
gut feeling backed up by scientific evidence.100 And strikingly, in more than one
93
Ibid.
94
Marlowe (2013).
95
Ibid.
96
Jones (1990), p. 11.
97
Phillips (2017), p. 84.
98
Wynne (2006), p. 147 and Friedländer (1942) in Spencer (2004c), p. 40.
99
Wynne (2006), p. 147.
100
Cf. The Icomos Nara Document on Authenticity (1994), Article 13. Available at https://www.
icomos.org/charters/nara-e.pdf [last visited March 30 2022].
case was the newly discovered work described as a “masterwork” that was subse-
quently sold for a record price. What is being asserted is that individuals and
institutions can and will be wrong, but this is not because knowledge and experience
can never be complete, but “because perception itself is determined by the structure
of expectations that underpins it”.101 The prime examples are perhaps van
Meegeren’s Vermeers: first hailed as “lost masterpieces”, they came to be seen as
“grotesquely ugly” after van Meegeren’s exposure and suddenly, it seemed to be
obvious that they were altogether dissimilar to Vermeer’s work. In retrospect, his
success is literally incredible. Yet, it seems that once Bredius was convinced,
everybody else followed suit: other scholars as well as museum officials who
made it the centrepiece of their blockbuster exhibition. Consequently, and based
on the strength of these laudatory statements, also the public must have come to
believe in the painting’s authenticity. Although van Meegeren’s success is incred-
ible, what is truly extraordinary is that the pattern revealed by his case is more or less
commonplace. The behaviour of Bredius and Werner Spies is thus exemplary of
what is called “collective wishful thinking” that is said “to plague and pleasure the
art community”.102
This state of mind can produce such an enthusiasm that contradictory clues may
be ignored, and incongruous details overlooked. For Bredius, finding a lost Vermeer
with a religious subject matter meant that his theory was finally proven correct; and
for Werner Spies it meant finding masterworks that he considered missing from Max
Ernst’s œuvre. Of course, experts and connoisseurs occasionally do (re-) discover
lost artworks: this was the case with Raphael’s Madonna of the Pinks,103
Caravaggio’s The Taking of Christ,104 Rembrandt’s Unconscious Patient (Sense of
Smell)105 and many more.106 However, the promise alone of discovering such a
long-lost masterpiece can tempt the ego of a connoisseur and weaken his instincts.
Interestingly, this issue has also been the subject of scientific investigation: psychol-
ogists analysed the behavioural responses of (non-expert) adults by presenting two
identical paintings, one a forgery and the other authentic.107 To cut a long story
short, neuroscience revealed that the “effect of emotional pain on the brain is akin to
“Spirit and feeling” is, among others, also included in the list of sources that are linked to
authenticity judgements.
101
Jones (1990), p. 11.
102
Charney (2015), p. 61 and cf. Tromp (2010), p. 19.
103
Roy (2006), available at http://cima.ng-london.org.uk/documentation/files/N-6596/02_Prove
nance/Proceedings_2007_ROY.pdf [last visited March 30 2022] and Penny (1992), pp. 67–81.
104
Spiegelman (August 24, 2014). Now in the National Gallery of Ireland, the painting had been
missing for two centuries as it was considered to be merely the copy of the lost original. See
Harr (2005).
105
Marissa Fessenden (May 10, 2016). Considered missing until 2015, the painting was discovered
at an auction in 2015, in heavily restored and overpainted condition.
106
Charney (2015), p. 42.
107
Ragai (2015), pp. 180ff. See also George Newman and Bloom (2012), pp. 558–569.
3.3 No End in Sight: The Most Recent Forgery Cases 123
that of physical pain”.108 Hence, the greater the belief in an authentic work, the
greater the impact of discovering that it is a forgery, and the greater the ensuing
distress. The brain reacts with joy and admiration to viewing what is thought of as an
original work and has to “undergo the painful process of altering its neutral activity”
to the realisation that it is in fact a forgery.109 The study therefore confirms that the
perception of art is not rational, not even for connoisseurs and experts and that the
brain reacts with what can be described as pain if it has to learn that an artwork is not
a long lost masterwork, but a forgery.110 Consequently, the extent to which the art
market still relies on the opinion of art experts in matters of attribution and authen-
tication is in inverse proportion to the results: not only have experts failed to
recognise some of the most obvious forgeries, they have regularly dismissed genuine
masterworks only to have their opinions reversed by equally confident experts.
Many paintings have crossed the chasm of genuine to forgery more than once.111
As a final remark, forgeries also deform and falsify our understanding of the
past.112 If forgeries are not detected and enter the canon of “genuine” objects, all
subsequent judgements are based on erroneous considerations. It should therefore
also be in the interest of experts to stop relying on their “sixth sense and gut feeling”
and to start learning from errors of the past. After all, exposed forgeries could and
should be seen as motors for the development and improvement of both scholarly
and scientific techniques. However, the next section will discuss more recent cases
of art forgery and suggests that, unfortunately, the market and its experts apparently
have not learned from their past errors, but instead, are fully prepared to repeat them.
3.3 No End in Sight: The Most Recent Forgery Cases
It is evident from the discussion of the foregoing cases that both public and private
collections must still hold many works by forgers less unlucky than van Meegeren,
Hebborn or Jansen. And they will continue to do so. The reasons for this are
manifold because several trends combine to give forgery and concerns about the
authentication process their present salience.113 Put broadly, these are technical
advances, which have simultaneously promoted the skills of forgers and their
detection, the commodification of culture and the popularisation of art and
108
Ibid.
109
Ibid.
110
Nägeli (2013), pp. 144ff. Nägeli confirms that the examination of an artwork is always
influenced by the viewer’s neurological structure.
111
Wynne (2006), p. 148. The prime example is perhaps Salvator Mundi, which was only quite
recently, namely in 2011, attributed to Leonardo da Vinci. Before, it was considered to be by
Giovanni Boltraffio, who worked as a pupil in Leonardo’s studio (or by Boltraffio and Leonardo) or
by Bernardino Luini, a follower of Leonardo.
112
Jones (1990), p. 16.
113
Lowenthal in Jones (1990), p. 18.
antiquity.114 It is quite obvious that the commodification of culture, i.e. the global
tendency to treat art as market commodity, augments value and thereby encourages
forgery. Especially because historical masterpieces are non-renewable sources, the
expanding market is always on the quest for lost originals. It is therefore asserted that
the main motive in the following cases is not primarily revenge, pride, or fame, but
simply money. Even though Beltracchi claimed that his main motivation was to
punish what he perceived as the greed and vanity of the art market and to expose
experts’ hubris, it cannot be overlooked that his forgeries enabled him to live a
carefree life. Since Werner Spies as well as Knoedler Gallery profited substantially
from their involvement in the sale of the forgeries, it remains debatable whether they
were genuinely duped or rather turned a blind eye to concerns that should have raised
red flags.
3.3.1 Wolfgang Beltracchi: The World’s Most Famous Art

Forger
Actor Steve Martin once remarked: “I love money. I love everything about it. I
bought some pretty good stuff. Got me a $300 pair of socks. Got me a fur sink. An
electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I
bought some dumb stuff, too.”115 Without any doubt, among the “dumb” stuff
Mr. Martin bought, was the painting Landschaft mit Pferden, attributed to Heinrich
Campendonk, which he acquired in 2004 for $850,000 from Paris-based gallery
Cazeau-Béraudière.116 The painting was sold again through Christie’s New York in
2006, before it was linked to the German art forger Wolfgang Beltracchi.117 In the
past years, the scandal surrounding Wolfgang Beltracchi and the Sammlung Werner
Jägers was among the biggest to hit the art market. Not only did Beltracchi forge
various paintings of mostly French and German expressionist painters such as Max
Ernst, Heinrich Campendonk, Max Pechstein, Fernand Léger and André Derain, but
he even invented a fictious collection, the Sammlung Werner Jägers that served as
provenance for the “inherited” paintings.118 What further adds to this case’s dimen-
sions is the fact that Werner Spies, probably the most esteemed expert on Max Ernst,
issued a certificate of authenticity of seven paintings.119 The inclusion in the
catalogue raisonné eliminated any doubt as to their genuineness and hence,
Beltracchi was able to consign the paintings to international galleries, dealerships
114
Ibid.
115
Steve Martin quoted in Cahill (2012), p. 358.
116
Keazor (2015), p. 7.
117
Child (June 1, 2011).
118
For more information see Koldehoff and Timm (2012). See further Hufnagel in Hufnagel and
Chappell (eds) (2019), pp. 321f, 338.
119
Meinhof (15 June 2011a) and Butin, p. 232.
and auction houses.120 The exact dimensions of the Beltracchi case remain unknown
to this very today since Beltracchi never made a full confession.121 Instead, he
agreed to a deal with the prosecution and confessed having forged 14 paintings
which were sold for a profit of about €16 million.122 As a result, Wolfgang and
Helene Beltracchi were sentenced to prison sentences of 6 and 4 years, respectively,
for fraud (bandenmäßiger Betrug).123 The sentences were day-release (Offener
Vollzug) meaning that only nights had to be spent in prison. The judge emphasised
that the defendants did not have any criminal records and that the deceit was eased
by the art market: neither art experts nor auctioneers were bribed or acted out of
motives of personal favours.124 Instead, they issued certificates of authenticity and
readily accepted the re-discovery of previously lost art works. However, while
investigators were certain to accredit more forgeries to Beltracchi, these paintings
were barred from the proceedings due to insufficient evidence or statutes of limita-
tion.125 The premature ending of the proceedings was perceived with a bitter taste
since 70 witnesses were not heard and the overall extent and number of Beltracchi’s
forgeries remain unknown.126
120
Werner Spies, Interview in Stern 8/2012, pp. 134f.
121
Koldehoff and Timm (June 13, 2013).
122
These are La Mer (1925), La Forêt I (1926), La Forêt II (1927), Oiseaux (1927), La Horde (1927)
and Vogel in Winterlandschaft, attributed to Max Ernst, Rotes Bild mit Pferden (1914) and
Landschaft mit Pferden (1915) attributed to Heinrich Campendonk, Akt mit Hut (1906) attributed
to Kees van Dongen, Liegender weiblicher Akt mit Katze (1909) and Seine mit Brücke und
Frachtkrähnen (1908) attributed to Max Pechstein, Nature Morte (1913) attributed to Fernand
Léger, Matisse Peignant à Collioure and Der Hafen von Collioure attributed to André Derain.
Beltracchi and the other defendants agreed to a restriction of the proceedings based on §257c
Criminal Code, which stipulates that a confession must be an integral part of the negotiated
agreement and allows the court to determine the content of the agreement.
123
§263 StGB (Fraud) provides:
(1) Whosoever with the intent of obtaining for himself or a third person an unlawful material
benefit damages the property of another by causing or maintaining an error by pretending false
facts or by distorting or suppressing true facts shall be liable to imprisonment of not more than five
years or a fine. [. . .]
(3) In especially serious cases the penalty shall be imprisonment from six months to ten years. An
especially serious case typically occurs if the offender acts on a commercial basis or as a member
of a gang whose purpose is the continued commission of forgery or fraud [. . .].
See further Keazor (2015), p. 7.
124
LG Köln, Case 2 O 457/08, judgment of 28 September 2012.
125
Zimmermann (September 28, 2011). In the Beltracchi case, the German Criminal Code provides
for a limitation period of 10 years (Section 78 III Nr. 3 StGB) and consequently, only works that
were sold after July 2000 could serve as evidence in the proceedings.
126
Ibid. According to Wolfgang Beltracchi, about 270 of his forgeries were still on the market
in 2016.
3.3.1.1 Details of the Case: The Sammlung Werner Jägers
The Sammlung Werner Jägers is a fictitious collection invented by Wolfgang

Beltracchi and his wife Helene with the purpose of giving credible history and
provenance to their forgeries. Werner Jägers (1912–1992) was a Cologne-based
entrepreneur and Helene Beltracchi’s grandfather and was credited with having
amassed a collection of 53 paintings by twentieth century artists such as
Campendonk, Ernst and Pechstein, while these were in fact modern forgeries by
Wolfgang Beltracchi.127 Furthermore, the long missing artworks were claimed to
have been acquired from the well-known gallery owner Alfred Flechtheim128 and
later stashed in a secret collection during World War II. Since the artworks were
considered to be degenerate art (entartete Kunst), they were in need of protection
from a government that tried to forbid and destroy everything “Un-German”.129
During the 1920s and 1930s, Werner Jägers acquired several paintings from Alfred
Flechtheim and lived close to Flechtheim’s gallery.130 It is due to these parallels that
the Beltracchis transformed him into a private collector of particular artworks. In
1933, Alfred Flechtheim was forced to flee Germany and to leave his assets
behind.131 Flechtheim eventually made it to London but died in 1937 at the age of
58.132 While he succeeded in bringing parts of his collection abroad, many paintings
and sculptures had to be left behind in Germany, among them paintings and
sculptures by Picasso, Braque, Van Gogh and Kandinsky. These works were then
either sold by Flechtheim’s gallery director Alex Vömel or confiscated by German
authorities because of their degenerate quality.133 These facts make investigation
into Flechtheim’s inventory very difficult. Even nowadays many artworks can be
traced back to Alfred Flechtheim, but their history after 1933 remains unknown.134
Since about 20 percent of Europe’s art was stolen or seized during this time, it is not
uncommon that previously unknown artworks are detected or that lost artworks
re-surface.135 Helene and Wolfgang Beltracchi used exactly these gaps and filled
them with the invented Sammlung Werner Jägers. To add further credibility to the
collection’s character and to provide more documentation, Helene Beltracchi
dressed up as her own grandmother Josefine Beltracchi and posed in front of
127
128
Alfred Flechtheim is the most famous German gallery owner of the 1920s. For a biography see
Dascher (2011).
129
Wolfgang and Helene Beltracchi (2014), p. 520.
130
Ibid.
131
Koldehoff and Timm (2012), p. 30.
132
Ibid.
133
Ibid. p. 31.
134
See in this context also Dascher (2011) about the Flechtheim inventory.
135
Fisher (November 6, 2013).
photocopies of the forgeries hanging on the wall. The forged photos were taken with
an old camera from the 1920s and old rolls of film from a flea market.136
In addition, Wolfgang Beltracchi also created gallery and collection labels to
disguise his forgeries and to document their history. These concerned the Sammlung
Flechtheim, with a woodcut of Alfred Flechtheim’s portrait, Galerie Schames and
Galerie Der Sturm.137
3.3.1.2 Details of the Proceedings: The Forgeries
The following 14 paintings were the subject-matter of the proceedings: the overview
of the institutions involved gives an impression of the fraud’s dimensions and why it
caused such an uproar in the international art market:138
1. ‘Max Ernst’ – La Mer (1925)
(a) Expertise by Werner Spies, added to the catalogue raisonné in 2001. Labels:
Sammlung Flechtheim and Galerie der Sturm, Berlin. Exhibited at various
times at Galerie Daniel Malingue, Paris (2003), Gemeentemuseum Den
Haag (2005–2006), Moderna Museet Stockholm (2008–2009) and Palazzo
Vittoriano, Rome (2009–2010).
(b) The painting was proven to be a forgery by Kathrin Pilz, Amersfoort in
2011.139
2. ‘Max Ernst’ – La Forêt I (1926)
(a) Expertise by Werner Spies, added to the catalogue raisonné. Labels:
Sammlung Flechtheim. Exhibited at the Metropolitan Museum of Art,
New York (2005). Sold by Gallery Malingue, Paris for $2.3 million to the
Richard Feigen gallery, New York.
(b) The forgery was proven by Orion Analytical, Williamstown/Maas.140
3. ‘Max Ernst’ – La Forêt II (1927)
(a) Expertise by Werner Spies, added to the catalogue raisonné. Labels:
Sammlung Flechtheim. Exhibited at gallery Cazeau-Béraudière, Paris
(2006) and Max Ernst Museum, Brühl (2006). Sold in 2004 to Marc
Blondeau, former director of Sotheby’s France, for €1.7 million. Later
136
Der Spiegel (9 March 2012). For the photo of Helene Beltracchi posing as her grandmother
Josefine Beltracchi in the 1920s to give documentation to the Sammlung Werner Jägers see also
Meinhof (29 September 2011b).
137
For images of the gallery labels see Bayerische Staatsgemäldesammlungen, The Jägers Collec-
tion, available at http://alfredflechtheim.com/en/reception/the-jaegers-collection/ [last visited
March 30 2022].
138
LG Köln, Case 117 Js 407/10, judgment of 27 October 2011.
139
140
Ibid. p. 254.
offered at TEFAF Maastricht and the Biennale des Antiquaires by gallery

Cazeau-Béraudière for €6 million and resold to publisher and collector
Daniel Filipacchi for €5.5 million via Diva Fine Arts and Hanna Graham
Associates.141
4. ‘Max Ernst’ – Oiseaux (1927)
(a) Expertise by Werner Spies, added to the catalogue raisonné in 2002.
(b) Labels: Sammlung Flechtheim. Exhibited at Moderna Museet Stockholm
(2008) and Louisiana Museum Humblebæck (2009). Sold in 2004 to a
private French collector for €2 million.142
5. ‘Max Ernst’ – La Horde (1927)
(a) Expertise by Werner Spies, added to the catalogue raisonné. Label:
Sammlung Flechtheim. Exhibited at Kunsthalle Würth (2009) and Museum
der Moderne, Salzburg (2010). Sold in 2008 at Christie’s, acquired by
Sammlung Würth, Künzelsau for $4.7 million.
(b) Paint analysis conducted by the LKA Berlin and the Rathgen-
Forschungslabor found Phthalocyaninblau, a pigment not available in
1927.143
6. ‘Max Ernst’ – Vogel in Winterlandschaft
(a) Expertise by Werner Spies, added to the catalogue raisonné in 2003. Label:
Sammlung Flechtheim. Exhibited at LWL-Landesmuseum für Kunst und
Kulturgeschichte, Münster (2010). Sold in 2003 to Marc Blondeau for
€500,000.144
7. ‘Heinrich Campendonk’ – Rotes Bild mit Pferden (1914)
(a) Expertise by Reiner Bornefeld (2007), Sabine Röder, Kunstmuseum Krefeld
(2009) and Andrea Firmenich (2008). Labels: Sammlung Flechtheim,
Galerie Der Sturm, Berlin and Kunstsalon Emil Richter, Dresden.
(b) Sold by Kunsthaus Lempertz, Cologne, for €2.4 million to Trasteco Limited,
Malta (2008). Purchaser brought a successful claim for damages on the basis
that Kunsthaus Lempertz failed to conduct due diligence.145
8. ‘Heinrich Campendonk’ – Landschaft mit Pferden (1915)
(a) Expertise by Andrea Firmenich (2004). Labels: Galerie Der Sturm, Berlin
and Galerie Schames, Frankfurt. Sold in 2004 via gallery Cazeau-Béraudière
141
Ibid.
142
Ibid. p. 253.
143
Ibid. p. 251f.
144
Ibid. p. 253f and Röbel and Sontheimer (13 June 2011).
145
Ibid. p. 248, and LG Köln, Case 2 O 457/08, judgment of 28 September 2012, at 38.
for €700,000 to actor Steve Martin, re-sold via Christie’s New York for
€502,446.146
9. ‘Kees Van Dongen’ – Akt mit Hut (1906)
(a) Labels: Sammlung Flechtheim, Galerie Posen & Schames, Frankfurt,
Kunstsalon Emil Richter, Dresden and Rheinischer Kunstsalon. Exhibited
at Gallery Malingue, Paris (2003).
(b) Sold in 2007 to Gallery Aittouarès, Paris for €1.5 million. The painting was
determined to be a forgery by Kriminaltechnik, LKA Berlin.147
10. ‘Max Pechstein’ – Liegender weiblicher Akt mit Katze (1909)
(a) Labels: Galerie Schames, Frankfurt, Kunsthandlung Posen & Schames,
Frankfurt. Exhibited at Buccerius Kunstforum, Hamburg (2004–2005),
Museum Schäfer, Schweinfurt (2005–2006). Current owner is Hermann
Gerlinger, Würzburg, who acquired the painting from gallery Henze &
Ketterer in 2004 for €703,244.148 Aya Soika, author of the catalogue
raisonné, denied the authenticity.
11. ‘Max Pechstein’ – Seine mit Brücke und Frachtkähnen (1908)
(a) Labels: Sammlung Flechtheim, Galerie Schames, Frankfurt, Kunsthandlung
Posen & Schames, Frankfurt. Stamp: Sammlung Werner Jägers Köln.
Exhibited at Von der Heydt-Museum, Wuppertal (2001) and Städtische
Galerie, Bietigheim-Bissingen (2002).
(b) Auctioned at Lempertz Cologne in 2001 for €63,615. Dr. Aya Soika denied
the authenticity in 2010.149 The painting was proven to be a forgery by
Kriminaltechnik, LKA Berlin in 2010 and confirmed by Rathgen-
Forschungslabor in 2011.
12. ‘Fernand Léger’ – Nature Morte (1913)
(a) Expertise by Sylvaine Brans, Paris. Negative expertises by Quentin Laurens,
Paris, Irus Hansma, Paris and Benoît Dagron. Labels: Sammlung
Flechtheim, Galerie Der Sturm, Berlin and Galerie Kahnweiler, Paris.
(b) Even though experts classified the painting as dubious, the paintings were
supposed to be sold to a Norwegian collector for €6 million, a sale brokered
by Burkhard Leisman, director of the Kunstmuseum Ahlen.150
146
Ibid. p. 247 and Sontheimer (1 September 2011).
147
Ibid. p. 250.
148
Ibid. p. 267.
149
Ibid.
150
Fricke (11 April 2014).
13. ‘André Derain’ – Matisse Peignant à Collioure

(a) Expertise by Michael Kellermann, Paris (2005). Labels: Sammlung
Flechtheim and Galerie Schames, Frankfurt.
(b) Sold in 2005 to gallery Dickinson, London for $3 million. Current owner is
the Hilti Art Foundation which acquired the painting in 2006 for $6.5
million.151
14. ‘André Derain’ – Der Hafen von Collioure
(a) Labels Galerie Schames, Frankfurt and Kunstsalon Emil Richter, Dresden.
(b) Offered by Burkhard Leisman, Kunstmuseum Ahlen, to various prospective
clients, confiscated at the museum in 2010.152
However, this list is not meant to be exhaustive. Wolfgang Beltracchi has been active
as artist and forger since the 1980s and hence, many of his forgeries are still
circulating on the international art market and continue to form part of private and
public collections.
3.3.1.3 The Role of Werner Spies
In the course of their business, the Beltracchis strictly adhered to a specific course of
action: before any of the forgeries were offered for sale, they were presented to the
competent expert on the artist and furnished with a certificate of authenticity or at
least the statement that the work would be included in the artists’ catalogue raisonné.
When Werner Spies, a major authority among art experts, art historian, museum
director and importantly, close friend of Max Ernst was confronted with seven
purported Max Ernst paintings, he deemed all of them to be authentic.153 In the
course of his career, Spies compiled numerous publications, among which the
catalogue raisonné of Max Ernst, was director of the Centre Georges Pompidou
and chairman of the Max Ernst Foundation in Brühl, and organised several important
exhibitions on Picasso, Max Ernst and Josef Albers. He received several awards for
his achievements, among which the Croix de Commandeur de l’Ordre des Arts et
des Lettres; the Croix de Commandeur de l’Ordre national du Mérite and the Großes
Bundesverdienstkreuz.154
Spies admitted that he was deeply persuaded of the paintings’ authenticity and
argues that to this day, there is no objective proof that the works are indeed
151
Koldehoff (1 February 2013).
152
Handelsblatt (3 March 2013).
153
He certified the painting by adding the following sentence and his signature: “Das abgebildete
Werk wird in das Werksverzeichnis von Max Ernst, das unter meiner Leitung entsteht,
aufgenommen.” Werner Spies, Interview in Stern 8/2012., p.134f. His wrong accreditations
concern the following paintings: La Mer, Tremblement de terre, La Horde, La Forêt I and La
Forêt II, Oiseaux and Vogel in Winterlandschaft.
154
Spies (2012).
forgeries.155 As regards the painting La Mer, Spies concluded that such a work was
until then actually missing from Max Ernst’s œuvre, labelling Wolfgang Beltracchi
as a brilliant clone of Max Ernst.156 Generally, authenticators charge a fixed amount
for their authentication service, either based on an hourly rate or a negotiated rate.157
In contrast, Spies received a percentage of the appraised and final sale price: from the
Beltracchis, he was paid with an 8% share of the sale price and in addition, he also
received commissions from dealers and collectors for whom he brokered the
sales.158 As a result of his wrong appraisals, Spies was sued for negligence and
found guilty by a French court of first instance. However, the judgment was
overturned on appeal—a decision that will be explored in the context of experts’
liability in the second part of this chapter.
3.3.1.4 Lempertz v Trasteco Ltd.: Rotes Bild Mit Pferden
The painting Rotes Bild mit Pferden (1914),159 previously attributed to Heinrich
Campendonk, deserves special attention. Being the subject-matter of court proceed-
ings, it allowed the court to comment on the question of what constitutes diligent
conduct in art transactions and if Kunsthaus Lempertz, acting both as authenticator
and seller, lived up to the required standard of care.160 Therefore, the case is also a
telling example of how a single entity, in this case an auction house, can be
responsible for authenticating, evaluating and selling a given artwork.
As regards the facts of the case, the Cologne-based auction house Kunsthaus
Lempertz had sold Rotes Bild mit Pferden for €2.4 million to the Maltese company
Trasteco Ltd. with a definitive attribution to the artist Heinrich Campendonk and
dated 1914. It was only after the sale that Trasteco arranged for scientific analysis
which revealed traces of titanium white in the canvas, a pigment that was not yet in
155
Ibid. “Ich war zutiefst von der Echtheit überzeugt. Einen Beweis der Unechtheit habe ich bis
heute nicht. Visuell, also nach den Kriterien die ich mit den Augen prüfen kann, gibt es für mich bis
heute keinen Zweifel an der Echtheit der Bilder. Sie sind eben so verblüffend gut gefälscht.”
156
Ibid. “So ein sensibles Bild, und alles ist drin, was Max Ernst an technischen Möglichkeiten
hatte. (. . .) Für mich waren das Bilder, die im Werk von Max Ernst fehlten. Das sind keine
zusammengesetzten Bilder, das sind eigenständige Schöpfungen. Solche Formen zu machen,
ohne, wie man in der Kunstgeschichte sagt, Reuezüge, also ohne sich zu verbessern, das ist etwas
Einzigartiges. Da ist überhaupt nichts drin, was an eine andere Handschrift denken lassen kann als
die von Max Ernst. Ich habe so eine einfühlsame Fälschung noch nie gesehen. Beltracchi ist ein
genialer Klon von Max Ernst. Ich habe gehört, dass er über 200 Bilder gefälscht haben soll. Ich kann
aber ganz fest ausschließen, dass es noch weitere Max-Ernst-Bilder sind. Ohne meine Expertise
kann man einen Max Ernst nicht verkaufen. Das ist so. Und ich habe mich nur siebenmal täuschen
lassen.”
157
Carrns (October 18, 2011).
158
Beltracchi (2014), p. 483 and von Uslar (6 February 2014).
159
For an image of the painting see Der Spiegel (28 September 2011).
160
For the practical implications of this case see further Sect. 4.4.2 of this chapter.
use in 1914.161 Subsequently, Trasteco brought a claim for damages and restitution
of the purchase price, claiming that Lempertz had acted negligently in authenticating
and attributing the painting.162 As a starting point, the court considered evidence
provided by Campendonk’s catalogue raisonné, which includes a work Rotes Bild
mit Pferden, but only with the simple indication that this work was exhibited at
Galerie Flechtheim in 1920. Further decisive details such as size, signature and
whereabouts were unknown and hence, not included in the catalogue.163 Moreover,
neither the catalogue raisonné nor the exhibition catalogue contained a reproduction
of the painting.164 Regarding the authentication process, Lempertz admitted that
they had tried to contact the author of Campendonk’s catalogue raisonné—who did
not answer—and failed to further review the information on provenance or to
conduct scientific analysis.165 In fact, Lempertz based its attribution on the assertion
that Campendonk’s son orally confirmed the authenticity to them, that the market
was familiar with the Flechtheim gallery label, which was also affixed to this work,
and that it was customary to only perform scientific investigation if there were
doubts about a piece’s authenticity.166 In the court’s opinion, however, it was not
decisive whether the artist’s son indeed confirmed the authenticity since his opinion
is likewise to be regarded as subjective and thus uncertain.167 As regards the
Flechtheim gallery label, it was art historian Ralph Jentsch who first started to
question the genuineness of the label as he considered the print to be poorly
executed, with the alleged Flechtheim self-portrait resembling a derogatory carica-
ture.168 He first examined the label when he was consulted by Andrea Firmenich,
who was working on her expertise on Rotes Bild mit Pferden and later detected the
same label on the Léger painting Nature Morte. Jentsch soon found out that the
paintings with this label affixed were all unknown and newly discovered paintings
by German expressionists, originating from either the Sammlung Werner Jägers or a
private collection in France.169
161
Zeitz (3 September 2010) and Kurtz et al. (2016), pp. 6ff.
162
163
Ibid. at 17, 19 and 22 and Beltracchi (2014), p. 499.
164
Beltracchi (2014), p. 528. Usually, pre-war exhibition catalogues did not include images of the
exhibited paintings. As composition, size and whereabouts were unknown, Beltracchi filled in
exactly these gaps with his forgeries, giving the “missing” paintings an authentic provenance and
history. Moreover, also Campendonk was considered to be a degenerate artist by the Nazis and
hence, many of his works were destroyed or are still missing.
165
LG Köln, Case 2 O 457/08, judgment of 28 September 2012, at 24. Moreover, the catalogue
entry only mentioned “Private Collection, France”, with no reference to the Sammlung Jägers.
166
Ibid. at 57 and 59. Indeed, in 1995, Christie’s sold the “Campendonk” painting, Mädchen Mit
Schwan, originating from the collection Werner Jägers. The painting had the same Flechtheim
gallery label affixed and both did not raise any doubts.
167
Ibid. at 74. [. . .] “Auch ihr Urteil ist jedoch notwendigerweise subjektiv und daher mit
Unsicherheiten behaftet.”
168
Sontheimer (3 December 2010) and Koldehoff and Timm (2012), pp. 32ff.
169
Ibid. See also Koldehoff and Timm (2012), p. 28.
It is unusual that an expertise was only requested after the painting had already
been sold. In March 2007, Andrea Firmenich, author of the catalogue raisonné,
finally requested Doerner Institute, a scientific laboratory, to test the painting, which,
however, could not deliver a clear verdict. Even though the analysis found traces of
titanium white which has been industrially produced since 1937/38 and hence
contradictory to the alleged date of creation, the resin acid layer of the varnish was
considered to not allow for a proper examination.170 Therefore, scientists decided to
leave the conclusion to art historians and Andrea Firmenich insisted on the work’s
authenticity. In her opinion, Campendonk could possibly have added the titanium
white at a later stage, for instance when visiting his friend Flechtheim in his gallery
and retouching the painting.171 In the end, it was the Flechtheim gallery label which
brought the Beltracchis’ downfall: scientists found traces of caffeine used for giving
the paper the appearance of being older as well as traces of glue that had not been in
use during Flechtheim’s lifetime.172 Before the court, however, scientists and art
historians were unable to formulate a unanimous opinion; hence, the court focused
on Lempertz’s responsibilities in the authentication process. The court eventually
concluded that, according to the catalogue description, Lempertz attributed the work
to Campendonk without any room for reservation: the painting’s history, as stated in
the catalogue implied a consistent provenance—purchased at Galerie Flechtheim
and part of a private collection ever since—and comparing the painting to other
Campendonk works, the catalogue description confirmed the presence of typical
stylistic elements. Moreover, the estimate of €800,000 to €1.2 million could only
mean that the work was by Campendonk—since a work that was possibly by
Campendonk could never realistically achieve such a result.173 Concluding that
the attribution was a definitive one, the court went on to assess whether Lempertz
could justifiably arrive at such a conclusion. The answer was negative.174
Art historical assessment conducted by Lempertz’s experts alone could not
provide such a basis since appraisals are always subjective and hence, of limited
value. In particular, the court considered experts which are affiliated with an auction
house to be biased as they have a direct interest in a positive finding on authenticity
in order to sell the artwork.175 As a result, Lempertz failed to conduct due diligence
170
LG Köln, Case 2 O 457/08, judgment of 28 September 2012 at 39.
171
Ibid. at 41.
172
173
LG Köln, Case 2 O 457/08, judgment of 28 September 2012 at 71. “Die Angaben der Beklagten
im Katalog vermittelten den Gesamteindruck, die Zuschreibung des Bildes zu Heinrich
Campendonk sei sicher.”
174
Ibid. at 72. “Für eine sichere Zuschreibung des Bildes zu Heinrich Campendonk fehlte eine
hinreichend tragfähige Grundlage. Über das im Jahr 1914 entstandene Ölgemälde Rotes Bild mit
Pferden gibt es keine gesicherten Angaben, die das Bild über seinen Titel hinaus individualisieren
könnten, insbesondere sind die Maße unbekannt, und es existiert keine Abbildung des Gemäldes.”
175
Ibid. at 73. “Die sichere Zuschreibung des Bildes hatte auch nicht deswegen eine hinreichende
Grundlage, weil die Beklagte das Bild durch eigene Experten kunsthistorisch hatte begutachten
lassen. Eine solche, naturgemäß subjektive, weil wertende Begutachtung kann nur begrenzten
and was found to have acted negligently.176 While the due diligence requirements
differ depending on the case, i.e. the quality of the painting in question, the
plausibility of its provenance and the estimated sale price, the court held that in
this specific case, Lempertz had been required to conduct scientific analysis prior to
the sale in order to justify the attribution.177 The applicable standard of reference was
that of a reasonable businessman (Sorgfalt eines ordentlichen Kaufmanns).178 This
is a higher standard than for private individuals and importantly, customs or habits of
the particular business sector cannot be invoked in order to justify otherwise
negligent acts.179 By definitely attributing the painting to Campendonk on the
basis of signature, information provided for by the consignor and art historical
research, the auction house therefore conveyed a certainty that was unsustainable
and without a proper basis in fact.180 In consequence, a reasonable auctioneer would
have had to put the attribution into perspective by indicating that it was based solely
on art historical assessment and visual inspection or by actively backing the attri-
bution with scientific evidence.181 The absence of evidence pointing to the conclu-
sion that an artwork is a forgery is clearly not sufficient for a positive attribution.
Instead, objective proof is required before such a determination can be presented.182
Erkenntniswert haben, da sie Fälschungen mit umso geringerer Wahrscheinlichkeit aufdeckt, je

begabter der Fälscher ist. Wird ein Gemälde eingeliefert, das einen zumindest sechsstelligen Erlös
verspricht, so muss der Auktionator - unter der Annahme, das Bild könne gefälscht sein - in
Betracht ziehen, dass der Fälscher sein Handwerk versteht, da er sonst nicht bereit wäre, das mit
der Einlieferung verbundene Entdeckungsrisiko einzugehen. Hinzu kommt, dass die hauseigenen
Experten nicht gänzlich unabhängig sind. Als Angestellte oder freie Mitarbeiter des Auktionshauses
können sie in Zweifelsfällen von der Überlegung beeinflusst sein, dass es für die Beklagte günstiger
wäre, wenn das zu prüfende Bild, das einen hohen Umsatz erwarten lässt, echt wäre.”
176
Ibid. at 75.
177
Ibid. at 79 and 80.
178
Ibid. at 76–79.
179
Ibid. at 76. “Auch Handelsgewohnheiten können den objektiven Maßstab der im Verkehr
erforderlichen Sorgfalt nicht mindern.”
180
Ibid. at 81. “Insbesondere weil jegliche Hinweise auf Restzweifel fehlen und die Beklagte ein
hohes Renommée genießt, wurde der Klägerin in Anbetracht des tatsächlichen Prüfungsumfangs
durch die Beklagte fahrlässig ein nicht zutreffender Eindruck vom Maß der von ihr selbst noch
durchzuführenden Nachforschungen vermittelt.”
Hier war ein Gutachten jedoch geboten, um eine vorbehaltlose Zuschreibung des Gemäldes zu
Heinrich Campendonk zu rechtfertigen. Das streitgegenständliche Gemälde wäre als Original ein
Rekordfund gewesen, für den sich nach dem Schätzpreis der Beklagten (€800.000 bis €1.200.000)
auch ein Rekordpreis abzeichnete. Das Bild war nicht nur jahrzehntelang verschollen gewesen, es
existierte auch keine bekannte Abbildung dieses Gemäldes mehr. Deshalb konnte eine
vorbehaltlose Zuschreibung nicht allein auf die Signatur, die Angaben der Einlieferin und eine
kunsthistorische Prüfung gestützt werden.”
181
Ibid. at 81 and 82. In this respect, time and costs of such a scientific analysis are not relevant.
182
Ibid. at 84. “Für den Echtheitsbeweis genügt es nicht, dass Fälschungsindizien fehlen, solange
die Prüfung nicht umfassend ist. Umfassend konnte sie im vorliegenden Fall nur nach
naturwissenschaftlicher Untersuchung sein. Denn bei einem Bild, über das es kaum gesicherte
Erkenntnisse gibt, bietet nur die objektivgegenständliche Untersuchung eine hinreichende
Richtigkeitsgewähr, weil sie die subjektiven Unwägbarkeiten von kunsthistorischen, wertenden
Regarding the requirement of scientific analysis the court made the following
important remarks: the costs of scientific analysis and the waiting times at the
respective laboratories cannot be invoked as reasons why such an examination
was not executed.183 If a painting has a low estimate of €800,000, costs for an
expertise, even if they are in the four digit range, do not carry any weight and the
same applies to a potential waiting time.184 As mentioned above, Lempertz could not
successfully argue that potential purchasers would not have expected such a scien-
tific analysis due to the fact that this is not commercial usage.185 As a final remark,
the court stressed that Lempertz was an internationally renowned auction house with
a 160-year history that disseminates a correspondingly high level of trust and hence,
is expected to live to up a higher standard than an auction house which operates
regionally or has been in business for just a couple of years.186 Generally, since
auction houses are considered to be Sachkenner who, unlike purchasers, can eval-
uate a consignor’s trustworthiness, their clients can reasonably rely on their assess-
ment.187 In the end, the judgment provides valuable indications of how a court
weighs an auction house’s duty of care in authentication and attribution decisions.
The Landgericht Köln acknowledged the link between the value of a work and the
degree of care required: the higher the potential sale price, the higher the standard of
care. In this case, the Campendonk’s estimated and achieved price was the highest
price ever paid for a work of the artist, and hence, the standard of care to be expected
from the auction house was accordingly high. Further, the decision demonstrates that
the applicable standard of care depends on the diligence required in the ordinary
course of business. In this context, market standards are irrelevant as they may be
significantly lower than the level of care required to protect the legitimate interests of
an auction house’s clients.
Therefore, the market’s common laxities in handling authenticity issues cannot be
relied upon by auction houses as an excuse to fall short of required standards of care
to ensure proper and accurate authentication and attribution results. The case of
Knoedler Gallery also bears several similarities to the role of Lempertz in the events
discussed above. Like Lempertz, Knoedler and its director Ann Freedman were also
accused of having knowingly, or at least negligently, sold forgeries worth about $70
million. Unfortunately, for the purpose of comparison, all lawsuits against the
gallery were settled out of court. Nevertheless, many considerations employed by
the court in Lempertz v Trasteco Ltd. recur in the allegations that were made against
Knoedler Gallery.
Einschätzungen sowie die Unschärfe der Erinnerung von Zeitzeugen betreffend die Provenienz
vermeidet.”
183
Ibid. at 83.
184
Ibid.
185
Ibid. at 85.
186
Ibid.
187
Ibid.
3.3.2 The Closure of Knoedler Gallery
The closure of New York’s Knoedler Gallery in 2011 came as another shock for the
international art world: the 165-year-old gallery was one of the oldest and most
prestigious galleries in the United States.188 Opened by Michael Knoedler at a time
when there were no major museums in New York, the gallery not only decorated the
homes of many wealthy collectors but was also an important tastemaker.
The scandal surrounding Knoedler Gallery, and its legal aftermath offers an
emblematic demonstration of how a prestigious art gallery could become involved
in several fraud cases. Preceding its closure, it emerged that Knoedler Gallery, its
owner Michael Hammer and former long-time director Ann Freedman were accused
of having sold forgeries that were purported to be works by American abstract
expressionist painters such as Willem de Kooning, Jackson Pollock, Mark Rothko,
Barnett Newman, Franz Kline, Robert Motherwell, Richard Diebenkorn and
Clyfford Still.189 Between 1994 and 2008, the gallery sold 32 paintings valued at
about $70 million that were subsequently found to be forgeries.190 Monetarily, it was
one of the largest art frauds in history and it is said that no forgery scandal in recent
years has hung over the art market as heavily as that of Knoedler Gallery. The
forgeries were brought to the gallery by Glafira Rosales Fine Art, a little known art
dealer from Long Island, who claimed to represent an anonymous collector, “Mr.
X”, residing in Mexico and Switzerland.191 While Glafira Rosales initially refused to
testify, she pleaded guilty in September 2013 and admitted that all of the works she
consigned to Knoedler were indeed forgeries, painted by Pei-Shen Qian, a Chinese
artist living in Queens, New York.192
Hence, the investigation revealed that Mr. X, the anonymous client Rosales
claimed to represent, never existed.193 Currently, Rosales is the only person
convicted in the case. She was sentenced to 9 months’ house arrest, 3 years’
probation and was ordered to pay $81 million to the victims of the fraud.194
188
Cohen (November 30, 2011a). See further Fincham in Hufnagel and Chappell (eds) (2019),
pp. 343ff.
189
Grant (April 2, 2012). However, Knoedler Gallery stressed that the closure was a business-
related decision and not affected by the allegations of forgery.
190
Smith (February 10, 2016) and Gilbert (21 November 2013).
191
Grant (2012) and Cohen (February 22, 2012c).
192
United States v. Rosales, 13 Cr. 518 (KPF) (S.D.N.Y.). Rosales was charged with (conspiracy to
commit) wire fraud, money laundering and subscribing to false tax returns.
F.B.I. Press Release, Art Dealer Pleads Guilty in Manhattan Federal Court to $80 Million Fake
Art Scam, Money Laundering, and Tax Charges, U.S. Attorney’s Office, Eastern District of
New York, September 16, 2013, Shallwani (September 16, 2013) and U.S. Department of Justice
Press Release, U.S. v. Glafira Rosales Complaint, May 20, 2013, p. 4. See also Rashbaum (August
19, 2013) and Maslin et al. (August 16, 2013).
193
F.B.I. Press Release (2013) and Bowley et al. (May 21, 2013).
194
Kinsella (July 10, 2017a). Pei-Shen Qian was also named in the indictment but had fled to China,
the same was the case for Rosales’ former partner Jose Carlos Bergantiños Diaz, who fled to Spain.
Regarding provenance, Rosales first claimed that Alfonso Ossorio, a friend of

Jackson Pollock and his contemporaries, had brokered Mr. X’s purchases. However,
Ossorio, well known for having kept detailed records, could not be linked to a Swiss
or Spanish collector.195 Later, Freedman would tell her clients that David Herbert, a
former employee at Sidney Janis and Betty Parsons galleries, both important sup-
porters of Abstract Expressionism in the 1950s, was involved in the sales. But while
David Herbert’s name appears on many of Knoedler’s invoices as provenance, no
evidence or documentation could ever be found either.196 It remains a mystery of the
case how readily the art market and collectors embraced artworks that did not have
documented provenance, exhibition history or ownership history. The fact that
Knoedler was able to sell these paintings with the provenance of Mr. X is indicative
of the widespread acceptance of this level of confidentiality in the trade. Unlike the
facts in the Beltracchi case, the era of American Abstract Expressionism was never
victimised in a way comparable to art that was considered degenerate in Nazi
Germany or looted during the World War II. Hence, it is very unlikely that a
collector could assemble a vast collection of masterworks from this period without
any verifiable information about the painting’s origin. This leads to the question if
Knoedler and Freedman were in fact aware of the paintings’ dubious origin, or
whether they negligently failed to conduct the level of due diligence and research
that would have been necessary to uncover the fraud. While Ann Freedman insisted
that she too was deceived, the court proceedings reveal that she was, in fact, not able
to give convincing answers to some of the most pressing issues of the case: Knoedler
had purchased all works in question from Glafira Rosales, a dealer who was not
known to them before, and it was decided to exclusively rely on Rosales’ story about
the provenance.
Further, neither Knoedler nor Freedman made any effort to investigate the
connection between Mr. X and David Herbert, a real and identifiable person after
all, who allegedly helped the anonymous collector to amass this treasure trove of
approximately 20 previously unknown works that were claimed to have been
directly purchased from some of the most celebrated abstract expressionist artists.197
What are the reasons then that Ann Freedman asserted that she never had any doubt
as to the paintings’ authenticity? Was it negligent ignorance or a culpable belief in
the genuineness of the collection; a discovery which may be described as too good to
195
Miller (April 25, 2016) and MacMillan (January 27, 2016).
196
Ibid. When IFAR refused to authenticate a purported Pollock painting in 2003 and concluded
that the connection to Ossorio was inconceivable, Freedman pressed Rosales for more information.
Rosales than changed her story and claimed that it was in fact David Herbert and not Ossorio who
had acted as Mr. X’s advisor. However, Knoedler’s search of archives revealed no evidence of a
connection between Herbert and any of the Rosales paintings either. See De Sole v. Knoedler
Gallery, LLC, 2015 WL 5918458, (S.D.N.Y. Oct. 9, 2015), p. 15 and Gilbert and Glass (18 April
2016).
197
De Sole et al. v. Knoedler Gallery, LLC et al., 12 CIV 2313 (S.D.N.Y. 2012), p. 2f., available at
https://de.scribd.com/document/87119035/Domenico-de-Sole-v-Knoedler-Gallery# [last visited
March 30 2022].
be true—especially at such price levels. Yet, according to Freedman, the low prices
for which Rosales sold the works reflect the circumstance that Knoedler would incur
substantial costs for researching, conserving, and evaluating the newly discovered
artworks.198 But is this allegation sustainable? Did Knoedler and Freedman indeed
conduct profound analysis and research? The apparent answer seems to be no: on the
contrary, it seems that Knoedler and Freedman actively tried to conceal information
that cast doubt on Rosales’ story. In 2001, collector Jack Levy bought the supposed
Jackson Pollock work Untitled (1949) for $2 million but wisely stipulated that the
painting had to be submitted to the International Foundation for Art Research
(IFAR) in New York and that he was entitled to a refund should the result be
negative.199 In 2003, the Foundation concluded that the provenance was “incon-
ceivable, improbable and difficult to believe”, concluding that there are “too many
reservations [. . .] to make a positive attribution to Jackson Pollock”.200 At this point,
one would have expected the gallery to end its relationship with Rosales or at least to
subject any future consignments to intensive research, including scientific analysis.
But instead, Knoedler continued to buy and sell works from Rosales, with no
indication of more extensive and thorough research. While Freedman alleges that
she consulted preeminent experts to view and evaluate the works, both orally and in
writing, the respective experts testified in court that they in fact had never authen-
ticated the artworks. This seems to validate the impression that Freedman exagger-
ated informal impressions to bolster the assertion that the works were indeed
authentic.201
Moreover, Freedman refers to the fact that every painting from the Rosales source
was hung at Knoedler’s booth at the Park Avenue Armory202 and not one of the
attending top art dealers ever expressed any doubt about their authenticity.203
Whether this is a logic that builds a block towards authentication is highly question-
able: employing the considerations made by Cologne’s regional court in Lempertz v
Trasteco, the absence of evidence suggesting that an artwork is a forgery cannot
automatically lead to the conclusion that the work is genuine.204 Moreover, a
definitive attribution always needs a firm basis—otherwise a dealer or auction
house is likely to incur liability for negligence. In addition, as can be deducted
from the Landgericht’s reasoning, if the provenance is unknown or cannot be
verified, scientific evidence must be used as supportive means of evidence. And
given the prices for which the paintings were acquired, let alone resold; the cost for
198
Cohen (October 21, 2012a).
199
Amore (2015), p. 44. See also Fincham in Hufnagel and Chappell (eds) (2019), p. 347.
200
Ibid. The International Foundation for Art Research (IFAR) is a non-profit educational and
research organisation conducting tests of and research into the authenticity of visual arts. For more
information see http://www.ifar.org [last visited March 30 2022].
201
Ibid. p. 45.
202
This is the annual show hosted in New York City by the Dealers Association of America.
203
Tully (August 21, 2013).
204
Cf. LG Köln, Case 2 O 457/08, judgment of 28 September 2012, at 84.
scientific analysis would have been regarded as negligible for the gallery.205 There-
fore, Knoedler’s definitive attributions, despite a total lack of documentary evidence
and without the support of scientific analysis, can be viewed as constituting negli-
gent and culpable behaviour. Another element that could have been decisive in the
court proceedings was that the gallery was substantially dependent on the profits
made from selling the Rosales paintings. This financial dependence raises the
question whether Knoedler and Freedman turned a blind eye to the provenance
and authenticity concerns.206 According to the accounting expert Roger Siefert,
Knoedler had sold the forgeries for a total of about $70 million, yielding a net
income for Knoedler of $32.7 million and earning Freedman more than $10 million
in commissions.207 However, removing this income would have caused the gallery
to suffer a net loss between 1994, when the sale of the fakes began and 2011, the year
of its closure.208 Furthermore, it was argued that the low prices for which the
paintings were purchased from Rosales already reveal their dubious nature: the
painting Untitled 1956, allegedly by Jackson Pollock, was acquired for $950,000
and resold for $8.3 million, while a purported de Kooning painting was bought for
$750,000 and resold for $4 million, both indicating excellent markups for the
gallery.209 While it is usual that dealers aim to buy low and sell high, these markups
seem to be exceptionally high and according to Michael Findlay, director of
Acquavella Galleries New York, prices which are way below the market value
should be a “red flag” for any dealer.210
3.3.2.1 Details of the Cases
The lawsuits against Knoedler Gallery and Ann Freedman unearthed “one of the
greatest scandals the art world has ever seen” and the details offer a kind of
transparency that is typically non-existent in the art business.211 Although all cases
were settled out of court and on undisclosed terms, the following section explores
several of the complaints as well as valuable information that could be gained from
expert testimonies in court. The lawsuits brought by Pierre Lagrange and Domenico
and Eleanore De Sole will accordingly be in the focus of the analysis. Other
complaints were brought by Frances Hamilton White regarding a purported Jackson
205
Ibid. at 83.
206
Financial reports indicate an amount of $60 million between 1996 and 2008 and more specif-
ically, the entire profit of $5.6 million in 2002 stems solely from sales of Rosales paintings.
However, the gallery incurred an operating loss of approximately $2.3 million in 2009 and suffered
a $1.6 million loss in 2010. See De Sole v. Knoedler Gallery, LLC (2015), p. 25, and Cohen
(October 21, 2012a).
207
Moynihan (February 10, 2016a).
208
Ibid. See further Cohen (October 21, 2012a).
209
Ibid.
210
Ibid.
211
Miller (April 25, 2016).
Pollock painting bought from Knoedler in 2000 for $3.1 million; by the Martin Hilti
Family Trust regarding a Rothko purchased for $5.5 million in 2002;212 by Frank
J. Fertitta III regarding a Rothko that was bought in 2008 for $7.2 million;213 and by
John D. Howard for the sale of a De Kooning forgery.214 While all these cases were
settled out of court,215 Fertitta’s lawsuit interestingly named yet another defendant:
the Swiss art historian Oliver Wick, former curator at the Fondation Beyeler and an
intermediary in the sale of the disputed work.216 Significantly, Wick and the
Fondation Beyeler had exhibited both the “Rothko” that Knoedler later sold the
Hilti Foundation and the “Rothko” which was acquired by the De Soles.217 Wick is
an acknowledged expert on the œuvre of Mark Rothko; he curated many exhibitions
and published extensively on the artist’s œuvre. Wick had authenticated Fertitta’s
Rothko by stating that “I confirm that the work has been shown to the team. All is
perfectly fine, otherwise I would not want to be involved with it. For this I stand with
my name as a Rothko scholar.”218 However, as mentioned before, it was claimed
that Wick received $300,000 for this expertise—an amount that appears highly
suspicious.
3.3.2.2 Pierre Lagrange: Jackson Pollock Untitled (1950)
The first lawsuit against Knoedler and Freedman was initiated in 2011 by hedge fund
manager Pierre Lagrange concerning the painting Untitled (1950), attributed to
Jackson Pollock, which was bought from Knoedler in 2007 for $17 million.219 In
the complaint, Lagrange claims that the work is a forgery and that the provenance is
demonstrably false, accusing Knoedler Gallery and Freedman of fraud, breach of
212
The Martin Hilti Family Trust v. Knoedler Gallery, LLC et al., 13 Civ. 0657 (PGG) (2015).
Cohen (January 30, 2013a). Forensic analysis had previously revealed that the painting in
question, Untitled (1956) contained a red pigment which was not developed until the 1960s and
was hence not at the artist’s disposal in 1956.
213
Fertitta, III et al. v. Knoedler Gallery, LLC et al., 14 CV 2259 (2015). See also Gilbert (11 April
2017) and Heim (9 April 2014).
214
Flynn (July 6, 2012), Smith (December 3, 2015) and Neuendorf (December 4, 2015b).
The case was scheduled to go to trial in January 2016, together with the De Sole case, but was
settled out of court in December 2015. Like the De Soles, Howard accused Knoedler and Freedman
of fraud, claiming that they were liable under the Federal Racketeer Influenced and Corrupt
Organizations Act, which triples a plaintiff’s damage - consequently, the settlement means that
the defendants could avoid a potential $12 million liability.
215
Gilbert and Glass (11 September 2017).
216
See further Altorfer and Baur (14 April 2014).
217
Ibid.
218
Ibid.
219
Knoedler Gallery in turn had acquired the painting from Glafira Rosales for a mere $950,000.
Lagrange v. Knoedler Gallery LLC, 11-CIV-8757 (S.D.N.Y.2011).
See also Gilbert (October 1 2015), Gilbert (November 21, 2013), and Ragai (2018), p. 88.
contractual warranties and unjust enrichment.220 At the time of the sale, the painting
was not included in the artist’s catalogue raisonné, but the defendants assured
Mr. Lagrange that the catalogue raisonné was in the process of being updated and
that the revised version would include the work in question.221 This allegation was
apparently unsustainable as, in fact, the Pollock-Krasner Foundation, which was the
sole entity in charge of authenticating, had disbanded its authentication committee in
1996 and ever since declined to authenticate any artworks.222 According to
Knoedler, the painting’s provenance was “sound and verifiable”, coming from a
private collector who had obtained it directly from Jackson Pollock, with David
Herbert acting as agent and since then, by descent to the present owner.223 In
addition, Knoedler and Freedman represented to Mr. Lagrange that the painting
had been shown to “twelve leading Pollock scholars, all of whom expressed ‘pos-
itive opinions’ of the work”.224 Interestingly, the very same assurance was given to
the De Soles in the context of their purchase and in this case, the court proceedings
revealed that these scholars in fact never expressed such opinions. When
Mr. Lagrange wanted to resell the painting in 2010, both Sotheby’s and Christie’s
refused to accept the work as it was not included in the catalogue raisonné and
demanded additional evidence of authenticity.225
Knoedler refused to provide additional information to both auction houses and
even refused to disclose the previous owner’s name to Lagrange—information that
was deemed indispensable in order to further research on provenance.226 As a
consequence of this lack of information, Lagrange commissioned James Martin of
Orion Analytical to conduct a scientific analysis of the pigments with the result that
“certain materials are inconsistent and evidently irreconcilable with the claimed
attributes that Jackson Pollock painted the work in the 1950s”.227 Knoedler Gallery
220
Lagrange v. Knoedler Gallery LLC (2011), pp. 1, 20ff and Spencer (2016), p. 2. In order to prove
a claim of fraud, the plaintiff has to show that the defendant actually knew that the painting was a
forgery. Therefore, a jury has to determine the defendant’s intent and state of mind.
221
Ibid. pp. 2 and 8.
222
See the Foundation’s website, Frequently Asked Questions: “The Foundation does not authen-
ticate works of art.”, available at https://pkf.org/general-faq/ [last visited March 30 2022].
223
Lagrange v. Knoedler Gallery LLC (2011), p. 6. David Herbert was an employee at Betty
Parsons and Sidney Janies, both galleries represented Jackson Pollock from the late 1940s to the
1950s. However, there is no evidence or historical documentation that Herbert acted individually as
an agent for Pollock.
224
Ibid. pp. 3 and 6ff. Ann Freedman presented this list to Lagrange with the addition that two
scholars on the list were members of the Pollock Krasner Foundation which was preparing the
forthcoming addendum to Pollock’s catalogue raisonné.
225
Ibid. p. 11, and Amineddoleh (2015), p. 422.
226
Ibid. p. 4.
227
Ibid. p. 16. As summarised in its report, two of the paint samples (clearly and unambiguously
integral to the original creation of the work and not added later or during restoration) were
discovered in 1957, first patented in 1962 and not commercially available until 1970—since Pollock
died in 1956, the respective conclusion was drawn.
See also Gilbert (10 February 2016c) and Shnayerson (April 23, 2012).
closed just one day after the report’s release and the lawsuit was settled shortly
thereafter, on undisclosed terms and for an undisclosed amount of compensation.228
3.3.2.3 Domenico and Eleanore de Sole: Mark Rothko Untitled (1956)
The second lawsuit was brought by Domenico and Eleanore de Sole in March 2012
and concerned the painting Untitled (1956), at the time of the sale attributed to Mark
Rothko and later determined to be another forgery from the Rosales’ inventory.229
Before settling their lawsuit out of court in February 2016, the collectors claimed
$25 million in damages, seeking redress for the sale of the counterfeit Rothko for
$8.3 million in 2004.230 However, it was not until Pierre Lagrange filed his com-
plaint in 2011 that the De Soles began to doubt their painting’s genuineness, since
the purported Pollock’s provenance in the Lagrange case was “exactly what we’d
been told”.231
Similar to the story told to Pierre Lagrange, also Domenico and Eleanore de Sole
were assured that the provenance was plausible. Allegedly, David Herbert arranged
for the Swiss collector to purchase the work directly from Mark Rothko in the 1950s,
and when his son inherited the work, he instructed Rosales to sell it.232 In addition,
Knoedler and Freedman also insisted that the work would be included in a forth-
coming supplement to the Mark Rothko catalogue raisonné that was being prepared
by the National Gallery of Art in Washington—however, in contrast to the Lagrange
case where a supplement was in fact never planned—the National Gallery of Art
228
Lagrange v. Knoedler Gallery LLC, pp. 4, 16, and Gilbert (15 November 2012).
When Lagrange demanded reimbursement of the purchase price, Ms. Freedman agreed. How-
ever, she failed to mention that she only owned half of the painting, the other half was owned by
collector David Mirvish. This fact was also not included in the invoice in which the provenance
reads “The artist (via David Herbert). Private collection. By descent to present owner”.
229
De Sole et al. v. Knoedler Gallery, LLC et al., 12 CIV 2313 (S.D.N.Y. 2012), available at https://
de.scribd.com/document/87119035/Domenico-de-Sole-v-Knoedler-Gallery# [last visited March
30 2022 and Magnuson (29 March 2012). See further Fincham in Hufnagel and Chappell
(2019), p. 351.
The painting had been acquired from Glafira Rosales for $950,000.
230
Ibid. pp.1f, Laura Gilbert (25 January 2016b) and Moynihan (February 7, 2016b). The De Soles
were seeking triple the amount of their purchase price in damages under the federal Racketeer
Influenced and Corrupt Organizations Act (18. U.S.C. §1961, et seq.) arguing that Knoedler and
Freedman operated in a scheme and conspired to defraud the buyers.
231
Boucher (January 30, 2016). In 2011, the New York Times published an article about the lawsuit
that was filed by Pierre Lagrange regarding Pollock’s Untitled 1950, also mentioning that forensic
analysis found yellow pigments in the painting which were not available until after Pollock’s death.
See Cohen (December 2, 2011b).
232
De Sole et al. v. Knoedler Gallery, LLC, et al. (2012), p. 2. and 40. The letter sent to the De Soles
in December 2004 includes the section “David Herbert Profile” with the concluding statement that
“Knoedler & Company is currently in the process of an in-depth exploration and study of the
heretofore unknown career of David Herbert. This research project will include not only documen-
tary information, but interviews conducted with Herbert’s clients, colleagues and friends.
indeed intended to include the painting if it were to publish a supplement.233 Even

though such a supplement was never published, the factual situation remains differ-
ent as it seems that the painting should have been included in this official publica-
tion. This explains why Laili Nasr, curator at the National Gallery of Art, who had
been working on the catalogue raisonné, confirmed in a letter to Freedman that there
were plans to “include a supplementary section to introduce new works on canvas
that were discovered since the 1998 publication of the first volume of the catalogue”,
adding that they also intended to include the Rosales-sourced Rothko.234 Hence, the
De Soles relied on the information provided by Knoedler and did not see an
indication to verify representations given by Knoedler and Freedman. Asked during
his deposition whether he ever enquired into the truth of this statement, Domenico de
Sole declared that “I just want to say that just to make clear if I go to Tiffany, I’m not
going to call a mine in Zimbabwe to find out if the diamond was true or not, when it
was mined. Okay? I just rely on the reputation of Tiffany. If I buy a Porsche and I
pay what I’m supposed to, I’m not asking the mechanic to confirm every piece has
been made in Germany”.235
Expert Testimonies
At the time of the purchase, Freedman had provided the De Soles with a letter
warranting the authenticity and good title of the painting and with a list outlining
seven specialists under the heading “the painting has been viewed by the following
individuals with special expertise on the work of Mark Rothko”.236 Among the
experts was Christopher Rothko, Mark Rothko’s son, who testified that he had never
authenticated any of his father’s works and was unaware of the fact that his name
was being used in relation to Knoedler’s sale of the painting.237 While Christopher
Rothko did not get involved in questions of authenticity, he deferred such inquiries
233
Ibid. p. 8. It was stated on the invoice that the work is “to be included in the forthcoming
supplement to the 1998 Rothko catalogue raisonné under preparation by the National Gallery of Art,
Washington, D.C., for a copy of the document see Ibid. p. 33.
234
Ibid. p. 39 and Grant, The Knoedler-Rosales Case: A Dealer’s Defence, Artnet Magazine,
available at http://www.artnet.com/magazineus/features/grant/the-knoedler-mess-4-4-12.asp [last
In fact, Nasr viewed the painting and described it as a “real treat”.
235
Videotaped Deposition of Domenico De Sole, dated May 10, 2013, at 188 (Plaintiff’s
Ex. 10, Doc No. 236-2).
236
De Sole et al. v. Knoedler Gallery, LLC, et al. (2012), p. 10. For a copy of the letter and the list
see pp. 35ff.
The 11 experts mentioned on the list are Christopher Rothko, Dr. David Anfam, E.A. Carmean
Jr., Bonnie Clearwater, Jack Flam, Laili Nasr, Stephen Polcari, Earl A. Powell III, Irving Sandler,
Dana Cranmer and Oliver Wick. The De Soles requested these written assurances concerning origin
and authenticity of the work before they closed the sale.
237
Miller (February 2, 2016) and Rothko Dep. (Id.), Ex. 32 at 14, 51–52.
to David Anfam, author of the catalogue raisonné for Rothko’s works on canvas,
whose name also appears on the list.
However, Anfam insisted that he had not seen the respective painting in person:
Freedman had merely sent him transparencies of the work in 2005—while the
respective letter and list were sent to the De Soles on 10 December 2004. According
to Anfam, the fact that his name appeared on the list constituted a “proxy authen-
tication” which is “outrageous” since “you don’t put people’s names on lists of
anything without their consent”.238 Also included on the list was Jack Flam, director
of the Dedalus Foundation and described as a “specialist on Robert Motherwell and
Henri Matisse” who during his testimony likewise denied that he had ever seen the
painting, stressing that he was not even an expert on Mark Rothko and hence, would
not authenticate his works.239 The same holds true for Earl A. Powell III, former
director of the National Gallery of Art and the Los Angeles County Museum of Art,
who also did not give permission to have his name appear on such a list as he was not
even an expert on Post-War art.240 Art historian Irving Sandler, an acknowledged
expert in the field of Abstract Expressionism confirmed for once that he had indeed
seen the Rothko “for maybe twenty seconds”, but in line with the other testimonies,
stressed that he did not authenticate artworks and did not raise concerns about the
painting’s authenticity “owing simply to the imprimatur of the Knoedler name”.241
While the list also named Bonnie Clearwater, former head of the Rothko Foundation,
she testified that Freedman vaguely “might have mentioned a new Rothko in
passing”242—a statement that clearly does not hint at authentication efforts. Both
the letter and the list mentioned Oliver Wick, curator at the Fondation Beyeler in
Basel, who considered the work to be of “superior museum quality” and stated that
Knoedler could anticipate a request for a loan from Beyeler.243
Dana Cranmer, former conservator for the Rothko Foundation, was hired by Ann
Freedman to prepare condition reports of the Rothko paintings and confirmed in the
letter to the De Soles that the work was in “remarkably good condition”.244 Cranmer
denied that she had ever authenticated artworks, to which a lawyer for Knoedler
pointed out that she had signed these reports, calling the respective works a “Pol-
lock” and a “Rothko”, and describing one of the works “a prime example of the
artist’s classic style and a genuine example by the artist”.245 According to Cranmer,
the information about authenticity came from Freedman herself and while she had no
238
Ibid. and Anfam Dep. (De Sole Dkt. No. 236), Ex. 6 at 162, 405–406.
239
Ibid. De Sole et al. v. Knoedler Gallery, LLC, et al. (2012), p. 37, and Flam Dep. (Id.), Ex. 15 at
347–48.
240
Ibid. and Powell Dep. (Id.), Ex. 29 at 14.
241
Ibid. Sandler is described as “one of the foremost authorities on Abstract Expressionism”.
Sandler Dep. (Id.), Ex. 33 at 10–12.
242
Ibid. and Clearwater Dep. (Id.), Ex. 6 at 15, 17, 42–43, 49.
243
Ibid. pp. 10 and 37.
244
Ibid. p. 36.
245
Ibid. and Cranmer Dep. (Id.), Ex. 8 at 42–43, 207–208.
reason to question the accuracy, her sole and primary task was to give an assessment
of the works’ condition. Yet, the gallery’s lawyer refused to differentiate between a
determination of authenticity and condition and insisted that Cranmer’s statements
could be interpreted as confirmations of authenticity. Unfortunately, while the court
was not given the chance to determine whether a statement made by a conservator in
a condition report will be given the weight of an official authentication, this seems
highly doubtful. Generally, in the normal course of business, condition reports are
aimed at providing information about a work’s physical condition, including any
flaws or previous restorations and not at commenting on authenticity. Cranmer’s
statements made in her role as conservator cannot be considered as an opinion on
authenticity. Instead, it seems that Freedman planted this information on her, as she
did with the other experts in question, because she was aware that their opinion—
whether substantiated or not—were essential in order to bestow credibility on the
paintings. In fact, most scholars testified that they have never seen the purported
Rothko, let alone authenticated it. And viewing by simply walking through the
gallery premises is certainly not sufficient for the purpose of validating a painting’s
authenticity. On the other hand, art historian Stephen Polcari and E.A. Carmean Jr.,
former curator of the department of twentieth Century Art at the National Gallery of
Art and head of research at Knoedler Gallery, were big supporters of the works and
seemed to ignore all red flags.246 Indeed, internal Knoedler documents reveal that the
IFAR’s 2002 decision not to conclusively attribute Untitled 1949 to Jackson Pollock
was described as “amateurish and irrelevant”.247
In 2008, the Dedalus Foundation, the publisher of Robert Motherwell’s catalogue
raisonné, approached Freedman and informed her that the paintings which the
gallery was handling were fake. Subsequently, forensic conservator James Martin
was commissioned to analyse two paintings attributed to the artist, allegedly from
1953 and 1955.248 In his report, Martin concluded that the information arising from
“analysis and research of materials used, is inconsistent with the understanding that
the paintings were made and purchased in the 1950’s” and that the work had traces of
two red pigments that were not used until the 1960s. After the report’s release,
Carmean asked Martin to delete this paragraph and to replace it with the conclusion
that “at this point in analysis and research, no conclusion can be drawn regarding
these two works”.249 However, Martin refused to do so, as this would have altered
the character of an otherwise objective investigation—something Knoedler was
apparently not interested in.
246
Miller (April 25, 2016).
247
Ibid.
248
The Foundation had informed Freedman in December 2007 that it believed seven purported
Motherwell works from the Rosales Collection to be fakes and importantly, rejected the idea that the
Motherwell works - just like the Rothko painting in question - were acquired directly from the artist
with David Herbert acting as agent. De Sole et al. v. Knoedler Gallery, LLC, et al. (2012), p. 15.
Gilbert (5 February 2016a) and Munro and Cascone (February 4, 2016).
249
Ibid.
Scientific Evidence and Due Diligence Obligations
In 2011, it was again James Martin who was hired by the De Soles to analyse their
purported Rothko. Martin’s findings were “inconsistent and irreconcilable with the
claim that Untitled was painted by Mark Rothko”: first, “the work displays crossbar
marks that Rothko deliberately avoided [. . .] and the work contains two white
opaque primers as well as an acrylic polymer emulsion which Rothko did not use
until the mid-1960s”.250 In total, Martin analysed 16 paintings from the Rosales
source with the devastating result that 14 contained historically inaccurate materials,
six had suspicious signatures, five showed signs of deliberate aging and nine had
been created on top of old paintings.251 According to Martin, some of the anomalies
did not require special forensic instruments, such as the signature misspelling
Jackson Pollock’s name, and can be compared to “JFK holding an iPhone”.252
With this amount of evidence against them, Knoedler and Freedman tried to shift
the burden of due diligence to the De Soles who as “sophisticated collectors”—
Domenico De Sole was elected Chairman of Sotheby’s Board of Directors in March
2015—were obliged to conduct research into authenticity themselves. In particular,
Freedman insisted that the De Soles must have been aware of the risk that the work
was not authentic since they failed to request expert opinions or other documents that
could have confirmed the provenance.253
While the court and a jury were unfortunately not given the chance of
commenting on buyers’ due diligence duties, the facts seem to favour the De
Soles’ side: first of all, the De Soles had asked Freedman for written evidence of
her oral representations—hence, the letter providing a written warranty of authen-
ticity and the list of experts who apparently authenticated the work—and second, the
De Soles reasonably relied on these documents since Knoedler and Freedman could
rely on the gallery’s preeminent and impeccable reputation to support their repre-
sentations.254 Likewise, the National Gallery of Art in Washington had trusted
Knoedler’s assessment when intending to include the work in the catalogue
raisonné supplement and the same holds true for the Fondation Beyeler which had
indicated interest in exhibiting the work.255 And indeed, in October 2015, federal
judge Paul Gardephe denied the defendant’s motion for summary judgment on the
ground that the De Soles were not expected to make extraordinary efforts to research
the authenticity and to discover the truth.256 Knoedler and Freedman previously
250
De Sole et al. v. Knoedler Gallery, LLC, et al. (2012), p. 17f. For a copy of the complete report,
including images, see Ibid. pp. 40ff.
251
Gilbert (2016a) and Munro and Cascone (2016). See also Ragai (2018), p. 88.
252
Kinsella (12, 2014b).
253
Shnayerson (2012).
254
De Sole et al. v. Knoedler Gallery, LLC, et al. (2012), p. 13.
255
Ibid. and Kinsella (January 27, 2016b).
256
De Sole v. Knoedler Gallery, LLC (2015), p. 83 available at http://law.justia.com/cases/federal/
district-courts/new-york/nysdce/1:2012cv02313/394017/262/ [last visited March 30 2022].
argued for a summary judgment on the fraud and fraudulent concealment claims
claiming that Freedman had not acted recklessly or with the intent to deceive and that
the De Soles’ reliance on her representations was unjustifiable. However, the court
disregarded this line of reasoning, citing the shifting stories concerning the prove-
nance, Rosales’ refusal to provide more information about the paintings’ origin and
the absence of any documentation.257 Regarding the question of reasonable reliance,
the court acknowledged that the plaintiffs had received a written confirmation of
Freedman’s oral representations and confirmed that Knoedler’s reputation lent
credibility to these assertions.258 In addition, the court stated that while the buyers
might have theoretically been able to discover the truth, the facts suggested that any
such discovery would be possible “only with extraordinary effort or great diffi-
culty”.259 In the end, the trial lasted only for 12 days with the parties settling
privately in February 2016. Nevertheless, the testimonies of well-known scholars
and curators provided an unusual insight into the opaque processes by which
valuable works, in this case numerous undiscovered masterworks, can be “authen-
ticated” and marketed.260
The Court’s View: Memorandum Opinion and Order
In 2015, Judge Gardephe presented a valuable reasoning in which he weighed

defendants and plaintiffs’ arguments.261 While Freedman and Knoedler did not
contest that material misrepresentations and omissions had been made, they insisted
that their statements were not made recklessly or with the intention to deceive.262
However, Judge Gardephe found “ample evidence” suggesting that the defendants
acted with fraudulent intent and understood that the paintings were inauthentic. This
is based on the consideration that the “fabricated stories of provenance shifted
dramatically over time”, the fact that Rosales was willing to sell the paintings for
“a fraction of their value on the open market”, the “absence of any documentation”,
and the reports and statements that raised serious concerns about the authenticity.263
In addition, by arguing that many experts and scholars “unambiguously conveyed”
257
Ibid. pp. 37f.
258
Ibid. pp. 40ff. Strikingly, Freedman contended that if the De Soles had performed “even minimal
[due] diligence” they would have learned the facts that provide the basis for their claims of fraud.
See Ibid. p. 41.
259
Ibid. p. 42.
260
Moynihan (February 10, 2016a).
261
De Sole v. Knoedler Gallery, LLC (2015).
262
Ibid. at 47.
263
Ibid. at 38. Such as the 2003 IFAR report which rejected the purported provenance and
questioned the authenticity of the “Pollock” painting.
that the paintings were genuine, Freedman clearly exaggerated the testimonies.264 In
fact, nearly all of the Rothko experts in the De Sole case denied that they had
authenticated or even seen the work. Moreover, the court found that the efforts to
show the Rosales works at exhibitions had the effect of “building a façade of
credibility” as there was no documented provenance other than the recent exhibition
history.265 The second main issue was whether the De Soles, as sophisticated
collectors, were under a duty to conduct their own due diligence into the painting’s
authenticity. According to Freedman, had the De Soles performed “even minimal
due diligence”, they would have learned the facts that provide the basis for their
fraud claim.266 Apart from the fact that this argument is in contradiction with
Freedman’s statement that she was convinced of the painting’s genuineness, also
the court reasoned that the De Soles alleged sophistication did not render them
unreasonable in relying on the representations concerning the statements.267 Impor-
tantly, Judge Gardephe made more general remarks with respect to the inherent
difficulty in authentication: referring to the fact that “the truth theoretically might
have been discovered”, he acknowledged that this would have been possible “only
with extraordinary effort or great difficulty”.268
The court recognised the complexity of ascertaining the authenticity and prove-
nance of an artwork, especially in the absence of any documentation and that
extensive archival and technological analysis would have been necessary.269 More-
over, if collectors were burdened with more comprehensive duties to investigate
authenticity, this would not only overturn long-standing industry practice, but also
bring up the question whether this is actually feasible: in a market where even the
previous owner can remain anonymous, how should a buyer conduct thorough
research into an artwork’s ownership history? With this in mind, the De Soles
were, under New York law, required to not only prove Knoedler and Freedman’s
fraudulent intent, but also to demonstrate their self-protective diligence and that their
reliance on the sellers’ misrepresentation was reasonable.270 These two elements are
factual determinations to be made by the jury and based on the facts of the case, the
content of the testimonies and Judge Gardephe’s considerations, it appears that a jury
264
Ibid. In contrast to Lempertz v. Trasteco Ltd., it appeared that Knoedler and Freedman not only
failed to support their research with scientific evidence, but instead, they also actively concealed
negative information on authenticity and knowingly misled their clients.
265
Ibid. at 39.
266
Ibid. at 41.
267
Ibid. The De Soles specifically asked for a written confirmation of all earlier oral representations
made by Freedman, including statements on authenticity and provenance.
268
Ibid. at 42.
269
Cf. the similar remarks in LG Köln, Case 2 O 457/08, judgment of 28 September 2012
(Lempertz v. Trasteco Ltd.).
270
Spencer (2016), p. 3. It must be proven, by clear and convincing evidence, that Knoedler and
Freedman acted with intent to deceive.
could have likely found in favour of the plaintiffs.271 By analogy and referring to
Lempertz v Trasteco Ltd. once more, a court is likely to consider a gallery or auction
house’s history in order to evaluate what level of trust can be assigned to their
business. In this regard, Kunsthaus Lempertz and Knoedler Gallery have similar
characteristics: at the time of the lawsuit, Knoedler had been in business for about
165 years and Lempertz, 160—both representing considerable timespans that lend
extended credibility, trust, and reputation to their businesses. Likewise, a gallery
could also be considered as a Sachkenner, with the result that the gallery bears the
responsibility to properly research and investigate the goods it sells and that clients
can reasonably rely on its professional knowledge and experience.272
3.3.3 Sotheby’s and the Old Masters Scandal
While the Beltracchi and Knoedler cases seem to suggest that particularly modern
and contemporary artworks are prone to being forged, another incident unfolded,
which illustrates that the Old Masters market has also become a victim of fraud. In
February 2017, Sotheby’s initiated proceedings against the London-based dealer
Mark Weiss and collector David Kowitz in order to recover the profits made in the
sale of Frans Hals’s Portrait of a Gentleman that was sold for $10 million in 2001
and was subsequently declared to be a modern forgery.273 The suspected forgery
allegation caused a sensation in the market for Old Masters, especially when the
history of the painting is put into context: French cultural officials initially consid-
ered the portrait a national treasure and Dutch curators at the Mauritshuis joined the
chorus of scholars who opined that the painting was a long lost masterwork by Frans
Hals.274
Blaise Ducos, chief curator of Dutch and Flemish paintings at the Louvre had
examined the painting, consulted with other scholars such as Quentin Buvelot,
senior curator at the Mauritshuis and finally, requested X-ray, infrared and ultraviolet
images of the work. In 2004, Ducos and Buvelot published a paper, calling the
271
As noted earlier, Judge Gardephe stated that there was “ample circumstantial evidence demon-
strating that Freedman acted with fraudulent intent and understood the Rosales paintings were not
authentic”.
272
273
Siegal (February 7, 2017), van Lent and Ribbens (7 March 2017), available at https://www.nrc.
nl/nieuws/2017/03/07/vier-tefaf-handelaren-in-opspraak-door-vervalsingen-7060351-a1549157
[last visited March 30 2022].
274
Siegal (October 26, 2016).
The painting was to be consigned to auction and when Christie’s applied for a licence to export it
to its London headquarters, the French state declared it a national treasure and issued a temporary
export restriction. The Louvre then tried to acquire it for €5 million, but was unable to raise the
funds.
painting a previously unknown addition to Hals’s œuvre.275 However, when the

French police seized Lucas Cranach’s Venus with a Veil from an exhibition in March
2016, because of concerns about authenticity, the purchaser of the Frans Hals
portrait became suspicious since his painting originated from the same source.
Re-examination by Orion Analytical then revealed that the painting was undoubt-
edly a forgery, as a modern pigment was found throughout the paint layer.276 In
addition, Sotheby’s filed a suit in the United States District Court against the
Luxembourg collector Lionel de Sant Donat-Pourrières, who consigned a painting
of St. Jerome that was sold in 2012 with an attribution to the circle of the Italian
Renaissance painter Parmigianino for $840,000.277 Again, scientific analysis
revealed the existence of phthalocyanine green, a modern pigment that only became
available four centuries after Parmigianino’s death.278 However, the figures behind
these forgeries remain a mystery: it is estimated that the whole scheme might have
involved forged Old Masters paintings valued at about $255 million, possibly
representing another “biggest art scandal in a century”.279 What is known is that
the French dealer Giuliano Ruffini seems to have been the common origin for all the
dubious paintings. While information about his collection is scarce, at least six of the
suspected works belonged to André Borie, a French government official.280
Comparable to the collections of Beltracchi’s Werner Jägers and Knoedler’s
Mr. X, a further record of provenance does not exist and there is no evidence
supporting the allegation that Mr. Borié was indeed a collector.281 Another painting
which is now contested is Orazio Gentileschi’s David Contemplating the Head of
Goliath. It was only recently discovered in 2012 and subsequently on loan to
London’s National Gallery.282 The same goes for the Hals painting, which is now
a proven forgery: it was also only recently (re-)discovered and it is very unusual for a
work to have never appeared in any scholarly literature and to have never been
exhibited in the 350 years since its creator’s death.283 Again, it appears unsettling
how easily these works slipped through the system and fooled major institutions
such as experts from the Louvre and the Mauritshuis. On the other hand, it appears to
be obvious that the forgery of Old Masters requires more sophisticated and refined
approaches: especially regarding authentic materials, it is much more difficult to
275
Ibid. and Pickford (7 February 2017).
276
Ibid.
277
Noce (18 January 2017) and Cascone (October 18, 2016). Interestingly, the painting was
displayed at New York’s Metropolitan Museum of Art in 2014 and 2015 with an attribution to
Parmigianino.
278
Ibid. Importantly, the paint samples were taken from 21 different areas, including areas that were
never restored.
279
Cascone (October 4, 2016).
280
Ibid.
281
Ibid.
282
Jones (4 October 2016).
283
Pickford and Spero (5 October 2016).
obtain centuries-old canvases and pigments and to “age” a modern forgery to match
its alleged date of creation. This is because scientific analysis can easily expose
anachronistic materials and hence, uncover a forgery.
3.3.4 The Russian Avant-Garde as a Particular Victim

of Fraud
Another category that has become a particular victim of fraud concerns a whole
genre of art: artworks produced in the period of Russian Avant-Garde or Modernism
are frequently plagued with disputes on authenticity. In early 2018, the Museum
voor Schone Kunsten in Ghent was forced to remove 24 Russian Modernist works
after 10 leading experts questioned their authenticity in an open letter.284 The works
from the Dieleghem Foundation, a charity owned by Russian businessman and art
collector Igor Toporovsky and his wife Olga had no exhibition history, no sales
record and had never before been reproduced in the scholarly literature.285 While the
museum stressed that it “assesses loans on the basis of confidential information from
the lender regarding authenticity and provenance”, Belgium’s Culture Minister Sven
Gatz subsequently ordered a committee to examine the works in question. Moreover,
major European museum collections have also recently detected modern forgeries
among the works in their holdings. According to scientific research, Malevich’s
work Black Rectangle, Red Square, owned by the state collection of North-Rhine
Westphalia in Düsseldorf and previously estimated at around $94 million, was a
forgery.286
The work was donated from a private collection and even though the museum
was aware of its questionable provenance, the new acquisition went on display
before scientific testing would reveal that the pigments and canvas fibres precluded
its creation before 1950. The major problem concerning the Russian Avant-Garde is
that many works were hidden away after the Revolution and hence, do not have any
known provenance.287 With the market beginning to prosper after the collapse of the
Soviet Union, forgers took note and took advantage of this murky situation.288 And
especially with a new generation of Russian collectors entering the market, prices
began to rise, and more and more dubious artworks have been re-discovered. In
2013, German police investigated a “cartel” that was suspected of having sold
284
Cascone (January 30, 2018), Hickley (April 6, 2018) and De Standaard (19 March 2018).
285
Ibid. The Toporovskys have been involved in an art scandal before. In 2005, they were involved
in the Preobrazhensky Affair as Igor Preobrazhensky, who was convicted of selling forged Russian
Modernist paintings, had sold two works on the Toporovskys’ behalf.
286
Person and Neuendorf (November 14, 2017).
287
Lerner (2013), p. 30.
288
Hickley (April 6, 2018).
hundreds of Russian Avant-Garde forgeries worth tens of millions.289 Coming from

the private collection of Edik Natanov, another Russian businessman, several paint-
ings attributed to El Lissitzky, Malevich and Kandinsky were discovered to be
forgeries.290 In the painting K19, attributed to Wassily Kandinsky, respected Mos-
cow art professor Valery Turchin recognised both Kandinsky’s complex visual
language and “the erratic glow of spiritualized matter”.291 Unfortunately, he failed
to recognise that the paint was not even completely dry and hence, that the praised
work was a forgery. According to German police, Natanov was the head of a cartel
that sold at least 400 paintings for four to seven-figure euro sums.
3.3.5 Interim Conclusion: Red Flags and Consequences

of the Scandals
As the Beltracchi, Knoedler and Old Masters forgery cases vividly illustrate, art
experts encounter an inherent difficulty when authenticating artworks: from Werner
Spies describing a Beltracchi forgery as the ‘best Max Ernst’ painting he had ever
seen and Christie’s subsequently featuring the work on the cover for its prestigious
evening sale, to Knoedler Gallery selling masterpieces that in their entirety turned
out to be forgeries and to Louvre officials considering a Frans Hals forgery a national
treasure, no one seems to be capable to issue an opinion beyond all possible doubt.
Foremost, these examples demonstrate the great difficulty of determining authentic-
ity with absolute certainty, both in the context of a sale and, if a dispute arises, in the
courtroom.
Had Beltracchi and Rosales not confessed to the forgeries, the cases would have
likely continued for many years. In the case of Lempertz and Trasteco, art historians
were literally unable to formulate an opinion on authenticity and the same was at
hand in the case of Knoedler and Lagrange: for instance, the IFAR in its 2003 report
concluded that it was unable to make a definitive attribution to Jackson Pollock,
simply because its members could not agree.292 If neither scientific analysis nor
authenticating bodies can come to a definite result, can art dealers such as Lempertz
and Knoedler be held to a higher standard of conduct? In the Lempertz case, the court
answered this in the affirmative and the same reasoning could, by analogy, be
applied to Knoedler.293 Knoedler’s prestige and reputation conveyed a certain
branding to the paintings the gallery handled, thereby verifying, and substantiating
their value. This is confirmed by Jack Flam, president of the Dedalus Foundation:
289
Hufnagel in Kila and Balcells (eds) (2015), pp. 121f.
290
Röbel and Wassermann (1 August 2013).
291
Ibid.
292
Spencer (2016), p. 6. Some of IFAR’s consulted experts concluded that the work was not
attributable to Pollock while others expressed the view that the work could be attributed to the artist.
293
LG Köln, Case 2 O 457/08, judgment of 28 September 2012, at 76.
“the way we look at reality is highly influenced by the context it’s presented to
us. The fact that they were sold by Knoedler, a respected gallery, influenced people’s
opinions”.294 By analogy, this circumstance was also likely to influence collectors’
attitude towards authentication and attribution. It was expected that the authorship of
an artwork sold by Knoedler was beyond doubt, otherwise a gallery of this esteem
would not engage in its sale. As in Lempertz v Trasteco, it can be argued that
Knoedler acted at least negligently when selling the respective paintings with a
definitive attribution, but without previously conducting thorough research.295
Therefore, Knoedler conveyed a false and unsustainable sense of certainty, a cir-
cumstance that was aggravated by Knoedler’s position in the market. As noted
above, much of the evidence presented constituted red flags that should have alerted
prudent sellers and buyers and might have led to a cancellation of the purchase.296
However, many of the elements considered in the Knoedler case as red flags are not
uncommon for art sales.
For instance, the refusal or inability to provide identifying information about the
previous owner or provenance might be a matter of concern, but is a fairly common
situation as it is routine for a dealer to refuse to disclose the seller or previous
owner’s name.297 Indeed, it is argued that these red flags from which Judge
Gardephe deducted that a jury could find a seller’s fraudulent intent, are frequently
found in art transactions.298 Another question is to what extent can buyers rely on the
information presented by a gallery and an auction house and to what extent are
buyers responsible for conducting their own due diligence.299 Can a collector rely on
the reputation, expertise of and representations made by a 165-year old gallery or are
collectors expected to conduct independent research into provenance and authentic-
ity?300 Usually, positive expert opinions and inclusion in museum exhibitions
convey a seal of approval—however, the Knoedler trial, as well as the Beltracchi
case, suggest that such information is in itself not sufficient for a definitive finding of
authenticity. To this end, Knoedler v De Sole and especially Judge Gardephe’s
considerations give some valuable indications. First, it is acknowledged that
294
Cohen and Rashbaum (August 15, 2013).
295
For instance, the aforementioned IFAR report from 2003 with its conflicting expert opinion was
neither publicly available nor disclosed to the buyer.
296
Spencer (2016), p. 10.
297
Ibid. p. 14.
298
Ibid.
299
Tully (February 10, 2016).
300
Smith (February 10, 2016) and Gilbert (11 February 2016d). It is argued that the evidence
presented in the trial favoured the plaintiffs, however, the De Soles might have agreed to settle the
case for the following reasons: plaintiffs would have had to prove that Knoedler and Freedman
committed fraud because they knew or should have known that they were selling forgeries. This
must be done by “clear and convincing evidence”—a very high standard given the complexity of
the dispute. Lastly, since triple the amount of damages was sought under the Federal Racketeer
Influenced and Corrupt Organizations Act, the De Soles would have needed to prove that the fraud
was part of a pattern, which was conducted in an ongoing and organised scheme.
authenticity is mainly based on expert opinion and provenance. While the former
implies varying degrees of reliability and certainty, the latter can contain gaps and
mistakes.301 As a result, all buyers of visual art take on a certain amount of what is
called “authenticity risk”.302 Secondly, it is important to establish whether buyers
could reasonably rely on the (fraudulent) misrepresentation. Taking New York law
and its fraud regime as an example, a contextual approach takes into account the
level of the parties’ sophistication, their relationship and the information available at
the time of purchase.303 If the buyer has the means to discover the true nature of the
transaction by exercising ordinary intelligence and he fails to make use of those
means, he cannot rely on justifiable reliance on the seller’s misrepresentation.304
However, in art transactions with their focus on confidentiality in many aspects,
the “true nature” of a transaction cannot be discovered as easily as in other types of
transactions. While Judge Gardephe acknowledged the extraordinary effort or great
difficulty such a discovery implies, it is suggested that New York law only requires
the plaintiff to conduct a “reasonable inquiry into any misrepresented facts” but does
not oblige the plaintiff to actually determine the “truth”.305 This is particularly
important for art transactions because, as noted above, the quest for authenticity
might factually be an impossible task, and hence, parties burdened with this respon-
sibility could never live up to this duty. Lastly, as another consequence of the
lawsuits initiated in all three cases, scientific analysis was employed in order to
obtain a conclusive verdict. Both in the Knoedler and in the Old Masters case, the
same company, Orion Analytical, performed the analysis and discredited the forged
paintings. This calls into question the long-held belief that art experts can identify
authenticity and authorship simply by looking at an artwork. Furthermore, this has
the potential of having major implications for the future art market. For instance,
Sotheby’s decided to acquire Orion Analytical in 2016 and to establish the first
Scientific Research Department within an auction house.
A similar effort was taken by Kunsthaus Lempertz in Cologne: after it auctioned
the forged Rotes Bild mit Pferden, the auction house purchased a Thermo Scientific
Niton X-ray fluorescence machine to analyse paintings prior to a sale.306 In most
cases, however, it will still be the art experts with connoisseur knowledge and vast
experience who will be asked to supplement such technical results. Because as
previously discussed, scientific evidence is only able to produce conclusive evidence
if the analysed painting indeed contains anachronistic components but cannot prove
the genuineness of a work. Therefore, it is a major problem that experts and
authentication boards are becoming increasingly hesitant to become involved in
matters of authentication. Following several lawsuits, these institutions are now
301
Spencer (2016), p. 5.
302
Conley (2004), p. 52.
303
Spencer (2016), p. 10.
304
Ibid.
305
Ibid.
306
Hufnagel in Hufnagel and Chappell (2019), p. 338.
3.4 Authentication 155
more reluctant to publicly provide an opinion as this may be challenged in court,

bearing the risk of considerable legal expenditure and defence costs. These concerns,
among others, form the basis for Part II of this chapter.
3.4 Authentication
In the context of artworks, authentication is the act of determining an object’s

genuineness in terms of authorship, age, and material characteristics. Generally,
this process is a balance between the expert’s eye (connoisseurship), historical
endeavours (provenance research) and sometimes, scientific testing.307 A
sub-category of authentication is attribution, which specifically seeks to identify
the true creator of an artwork.308 Put simply, it is frequently argued that authenticity
stems from an attribution, based on an expert’s persuasion and opinion.309 Yet, as
will be discussed below, this simplification ignores several facets of this broad
notion that defines the concept of authenticity. While this topic has been extensively
dealt with in the literature, from empirical aspects to analyses of more conceptual
and theoretical understandings, the process of authentication is not as straightfor-
ward as it might seem at first glance.310
If authentication is solely based on stylistic enquiry and judgement, it is inher-
ently subjective and therefore, exposes the expert or authenticating body to potential
liability. Moreover, authentication is as much a product of market consensus as of
expert and scholarly research. It is argued that recently, anxiety has become the
predominant sentiment surrounding the authentication of art.311 This is due to the
fact that the structures and approaches which shaped authentication and the art
market for nearly two centuries are no longer able to adequately address the
complexities of the contemporary scenario: exceptionally high prices, a largely
unregulated international market, the preponderance of forgeries and natural
human error in connection with a litigious culture mean that no one is immune to
risk.312 In this respect, this section gives an overview of the structures that reflect and
contribute to the pressing problems faced by collectors, dealers, authenticators and
authentication boards. In particular, case studies are employed in order to illustrate
307
Christopherson (2014), p. 55.
308
In contrast to authentication, which seeks to expose artworks that deliberately seek to mislead
and imitate, attribution focuses on the identification of a work’s creator. A work that is not properly
attributed (yet) is often referred to as a sleeper. For an extensive discussion of this topic see
Bandle (2016).
309
Schack (2017) in Weller et al. (2017), p. 11.
310
For more information see Aldrich (2013).
311
Loll et al. (2015), available at https://authorzilla.com/eO8E/download-a-pdf-on-i2m-standards-
k-l-gates.html [last visited March 30 2022].
312
Ibid. p. 1.
the myriad reasons why the art market is increasingly considered a “precarious and
paranoid arena”.313
3.4.1 The Importance of Authenticity for the Art Market
In a market where works of art are not just bought for aesthetic pleasure and
enjoyment but also for investment purposes, concerns about authenticity have
become more precarious as monetary values and prices rise. As the preceding
introduction outlined, the concept of authenticity is not only concerned with rooting
out forgeries in the art market: apart from the fact that a positive finding of nominal
authenticity is a prerequisite for any sale or valuation, it is also part of the general
desire to understand a work’s original context of creation, such as the position of its
genre at the time of creation or its perception by the contemporary audience.314
Therefore, it is beyond any doubt that authenticity is an essential quality of each
work of art; a precondition that is likely to be so obvious that it might not be directly
articulated. This idea is supported by the Icomos Nara Document on Authenticity,
which states that: “authenticity [. . .] appears as the essential qualifying factor
concerning values”.315 In fact, it is argued that the art market only functions if an
artwork can be attributed to a specific creator, date or origin.316 This is especially
relevant in the art trade because once an artwork’s authenticity is denied or doubted,
this usually coincides with major financial losses.317
As a result, the high stakes which the contemporary art market has brought about
have not made authentication and attribution any easier. On the contrary, experts and
artists’ foundations have increasingly stopped offering their authentication services
as a response to costly lawsuits that often followed their disagreeable decisions. This
untenable situation has been described as the “deep freeze in authentication” and
bears many disadvantages for the various art market participants.318 Left without an
authority or a mechanism to address and evaluate new facts and findings, the market
is paralysed due to this authentication gridlock. This is particularly troublesome with
a view to the art market’s transformation into an industry that attaches great
importance to the economic value and marketability of artworks. An unwanted,
313
Ibid.
314
Boylan (2005), p. 214 and Goodman (1987) in Margolis (1987), pp. 262ff. For a study on the
relevance of historical characteristics see Pommerehne and Granica (1995), pp. 238ff. The authors
list various criteria for the purchase of an artwork such as the “aura of the work, emotional and
intellectual impact or mere beauty of the piece”. See p. 242 for the full overview.
315
The Icomos Nara Document on Authenticity (1994), Article 10.
316
Bandle (2015), p. 380.
317
Demarsin, Proefschrift (2008a), pp. 33 and 78, and Demarsin, Handel in kunstvoorwerpen, p. 31
and p. 88.
See in general Dutton (1985).
318
Maloney (April 24, 2014).
but ensuing consequence is that the “distribution throughout the art world of fakes,
misattributions, and imitations by the dishonest, careless and uninformed is facili-
tated”.319 These high-stake considerations create more and more disputes
concerning artworks’ authenticity and drive more and more parties to resolve these
disputes in court. Apart from the fact that such lawsuits have a freezing effect on
experts’ willingness to openly communicate opinions, the question arises whether a
court is able to satisfactorily deliver judgments on such issues. This will be, among
other issues, discussed in the following paragraphs. But before entering into this
discussion, the concepts of authenticity and forgery will be examined from a
historical perspective, the methods of authentication will be assessed, and experts’
liability will be evaluated in a number of jurisdictions.
3.4.2 The General Concepts of Authenticity and Forgery
In the art trade, probably nothing is as important as authenticity: a changed attribu-

tion can catapult a previously unknown work of art into the forefront of museum and
sales exhibitions and likewise, increase or decrease its monetary value enormously.
In the same context, the history of art forgery is as old as the art trade itself: the
authenticity of artworks was already a great concern in ancient Rome, when the
popularity of authentic Greek vases and sculptures caused a surge in Roman copies,
and later on in the Middle Ages, which saw the development of a lively trade in fake
religious relics along pilgrimage trails.320 This exemplifies that in the past, artworks
were copied and faked for a variety of reasons which were not necessarily of a
deceptive nature.321
Yet, forgery presupposes that it is indeed profitable to forge the work of an artist
or a time of creation.322 To begin with, a work of art is authentic, i.e. it is considered
to be real, genuine and true, if the artist to whom it is attributed in fact produced
it. For this purpose, the artist often indicates his creatorship by signing the respective
work.323 In addition, next to this notion of being real in the forensic sense, there is
also the notion of being genuine in the emotional sense, which includes the feeling
that the work is sincere, honest and truthful to its own kind.324 However, what
always should be kept in mind throughout this examination is that the notion of
authenticity is relative, rather than absolute. This means that authenticity has to be
judged by the features one decides to attribute to the artwork in question and that a
319
Adam and Pryor (2011).
320
Charney (2015), p. 15, and Brewer (2009), p. 7.
321
For an extensive analysis of the concept of forgery in premodern times see Münch et al. (2014).
322
From this perspective, art forgery is a relatively new phenomenon as it was only during the
Renaissance that the perception shifted from craftsman to the artist as the sole creator of an object.
323
Dutton (2005), p. 258.
324
Ibid.
forged painting is not inauthentic in every respect: while a forgery of a Vermeer

painting by Han van Meegeren is both a fake Vermeer and an authentic Van
Meegeren, a forgery of a Max Ernst work by Wolfgang Beltracchi is at the same
time a fake Max Ernst and a genuine Beltracchi.325 This finding holds true for every
forgery and in these cases, it is in the sphere of authorship, attribution and dating that
the paintings are deemed to be inauthentic. Such forged artworks have a
misrepresented history of production and have usually been created for financial
gain, by relying on and exploiting the established reputation of a well-known artist.
Therefore, it is argued that authenticity is not an intrinsic or objective quality of an
artwork.326 The notion is not limited to a correct attribution of authorship or an exact
historical classification but can relate to every quality of an artwork such as the
author, the date or the materials used. Certainly, the meaning depends on the artwork
concerned.
For Ming porcelain for instance, the individual creator is irrelevant, and a piece is
considered authentic if it originates from the Ming dynasty (1368–1644). It is
authentic because its origin dates from a certain time in history.327 Authenticity
always demands a context and an artwork can be authentic from one perspective and
inauthentic from another: for instance, Eric Hebborn’s drawings were authentic as
far as the materials were concerned, but were inauthentic as regards their author-
ship.328 Therefore, authenticity pertains not only to the attribution or authorship or to
a specific location in place and time, but also to any other feature an object has or
pretends to have.329 This is confirmed by the Icomos Nara Document on Authen-
ticity: Article 11 affirms that: “it is thus not possible to base judgements of values
and authenticity within fixed criteria” and “heritage properties must be considered
and judged within the cultural contexts to which they belong”.330 Moreover, a
distinction is made between nominal authenticity and expressive authenticity.331
Nominal authenticity concerns the correct identification of the authorship, origin or
provenance of an object. To be designated as authentic, these objective representa-
tions must have been verified. Expressive authenticity connotes the “true expression
of an individual’s or a society’s values and beliefs.”332 This notion of authenticity
measures the degree of original or inherent genuineness and integrity of a work.
Musical performances are illustrative examples where authenticity of expression can
conflict with authenticity of performance: the performance of a player who attempts
to mimic the style common at the time when the work was composed will differ from
325
Dutton (2005), p. 258.
326
Demarsin, Proefschrift (2008a), pp. 41 and 858. See also Demarsin, Handel in kunstvoorwerpen,
p. 41, and Demarsin, Expertise, veiling en certificaten in de kunsthandel, p. 674.
327
Dardress (2012), p. 23.
328
Demarsin and Schrage (2008), p. 567. See also Dutton (2005), p. 258.
329
Ibid.
330
The Icomos Nara Document on Authenticity (1994), Article 11.
331
Dutton (2005), p. 259.
332
Ibid.
the performance of a player who acts according to his own style and method of
playing. As a result of the fact that a performance always entails a degree of
interpretative freedom, it is difficult to define one authentic performance.333 In
contrast, with a painting for instance, there is a nominally authentic object that can
be identified as the original. The notion of authenticity in art history has thus a
functional and objective connotation: an artwork is considered authentic if it is what
it claims to be. Because of this, inauthenticity is the discrepancy between what an
object factually represents and what it claims to be.334
However, this approach leads to several challenges pertaining to authentication
and forgery, perhaps the most often-discussed issue of authenticity. In the context of
authentication, it has become clear that judgements of authenticity may be linked to a
great variety of sources of information.335 This wealth of sources includes form and
design, materials and substance, tradition and techniques, use and function and also
spirit and feeling.336 As will be seen further on in this section, it is the last category
spirit and feeling that is problematic if it serves as the main point of reference. In
addition, determining if an artwork really is in conformity with the attributes it is
credited with is often not that straightforward. In a market where art works are not
just bought for aesthetic pleasure and enjoyment but also for investment purposes,
concerns about authenticity become more precarious as monetary values and prices
rise. This complexity becomes even more obvious when the aesthetic significance of
authenticity is considered.337 This dimension of authenticity refers to the situation in
which two paintings exist with exactly the same subject matter: the first painting is
an assured original and the second painting is copy. While an average viewer may
not spot any visual differences at all, the second work of art is nevertheless a fake, to
be unmasked by technology and consequently, with a considerably lower market and
resale value. Of course, the aesthetic value which a viewer attributes to a painting is
dependent on his personal knowledge and experience. Therefore, in the case of an
original work and an indiscernible forgery, Goodman introduces the question “indis-
cernible to whom?”338 While differences between the Mona Lisa and an exact copy
may be indiscernible to a child, they might be obvious to an art expert or curator.
And even if an expert cannot tell the difference, this does not preclude the difference
emerging at a later stage.339 As a consequence, a forgery produces the same kind of
aesthetic pleasure but once unmasked, that knowledge alters and sharpens the
perception of value. But if even the most skilled expert cannot tell the original and
the forgery apart, Goodman advances the issue if there can be an aesthetic difference
333
See in general Dutton (2005), pp. 264ff.
334
Demarsin, Proefschrift (2008a), p. 858, and Demarsin, Expertise, veiling en certificaten in de
kunsthandel, p. 674.
335
Cf. The Icomos Nara Document on Authenticity (1994), Article 13.
336
Ibid.
337
Goodman (1987) in Margolis (1987), pp. 262ff.
338
Goodman (1976), pp. 100ff.
339
Ibid. and Dutton (2005), p. 262.
at all.340 Koestler builds on this idea by arguing that if a forgery is in fact indiscern-
ible from the original or fits perfectly into the artist’s oeuvre, there is no reason to
exclude it from a museum.341
While this discussion is primarily philosophical and theoretical in nature, it
should not be underestimated that the issues of authenticity are a complicated field
and give rise to many disputes in practice. In addition, the traditional meaning given
to authenticity is that a work of art is considered authentic if it was entirely created by
the artist to whom it is attributed.342 This conception refers to only one possible
aspect of authenticity and presumes that authorship is the single defining criterion.
However, this entire creation criterion does at times overlook an artist’s historical
creative process. As will be discussed below, authorship is a notion that cannot serve
as the single criterion on which authenticity is based.
To illustrate the complexity of this matter, Roger H. Marijnissin made the
extensive attempt of classifying all possible constellations between the realms of
authenticity and forgery: in descending order starting from a fully authentic painting,
he lists paintings that were created in cooperation between two or more artists;
unfinished paintings that were completed by a second artist; replicas made by the
same artist as the original painting; workshop replicas produced by students; works
that are industrially produced in a series; copies produced outside of the workshop;
copies produced for the purpose of a study of the original; paintings in or after the
style of a certain artist (often labelled as “school of”); authentic paintings that have
been modified with fraudulent additions to increase their value (a signature for
instance); authentic works that have been undergone extensive restoration or are
heavily damaged; industrial reproductions; forgeries created with modern materials
and lastly, forgeries made from old materials.343 This very detailed classification
exemplifies how many sub-categories exist between an authentic artwork and a
forgery. However, it seems to be untenable and of little use as a practical application
since it is almost never possible to fully document and prove the history of artworks
to the degree necessary for such a classification. Within the concept of forgery, a
distinction is made between different categories, while in everyday usage these terms
are often used interchangeably. A forgery is a fraudulent work created in the style of
an artist whose authorship would result in greater monetary value and a fake involves
the alteration of an authentic work in order to suggest a different authorship, which
again, would increase the artwork’s value.344
A third category is misattribution, a work that is wilfully or unwittingly attributed
to an artist who in fact is not the true creator, resulting in a wrong judgement on its
340
Goodman (1976), p. 101.
341
Dutton (2005), p. 262. See Koestler (1964).
342
For an academic overview of classification from authenticity to forgery see Marijnissen (1985).
343
Ibid.
344
Charney (2009), p. 108. A third category is misattribution, i.e. the situation when a work is
wilfully or unwittingly attributed to an artist who in fact is not the true creator, resulting in a wrong
estimation of its significance and value
significance and value. The distinguishing aspect between forgeries, mere misattri-
butions and innocent copies is the deceptive intention on the part of the forger, who
knowingly and willingly imitates an artist’s style and may even invent a forged
provenance to enhance the work’s credibility. According to this definition, an
innocent copy can become a fake if a fraudster adds a signature, other stylistic
characteristics, misrepresents or invents the provenance, or endows the work with a
forged certificate of authenticity.345 Whatever term is given to such a painting, fake
or forgery, they share the common feature that they do not factually represent what
they purport to be. However, the category of intentional and fraudulent misrepre-
sentations of artworks must be distinguished from unwitting misattributions, which
erroneously either attribute an artwork to an artist who is in fact not the creator or fail
to attribute it, turning it into a “sleeper”.346 Therefore, the term inauthenticity does
not imply fraud in all cases. Siehr very interestingly argues that, strictly speaking,
there are no forgeries.347 As such, each artwork is the creation of its author. Forgeries
only begin to exist if a work is, wholly or partly, presented as the creation of
somebody else. This means that forgers’ works are first and foremost their own
creations (genuine Beltracchi’s, van Meegeren’s, or Jansen’s) and turn into forgeries
as soon as they are attributed to another artist—which obviously aligns with the
forgers’ intentions. What distinguishes forgeries from honest misidentifications,
misattributions and copies are the deceptive intentions on the part of the forger: he
knowingly and willingly creates a painting in the style of a given artist and at times,
even invents a forged provenance in order to enhance the prospects of selling the
work.348 According to this definition, a copy can also become a forgery if a
defrauding seller misrepresents the provenance of a work by adding a false signature
or by adding a forged certificate of authenticity. Whatever name one decides to give
to such a painting, fake, forgery or copy, what they all share as a common feature is
that they do not factually represent what they purport to be. The fact that this also
holds true for sleepers, i.e. paintings which were considered to be copies by students
or lesser known artists and hence of a lower monetary and cultural value, but which
are afterwards identified as original paintings by masters, shows that the term
inauthenticity does not imply fraud at every stage of production.349 It is conse-
quently necessary to distinguish between the intentional and fraudulent misrepre-
sentation of artworks (forgery) and misattributions concerning the artist or the dating
of a work.
An example of the latter category is the recent rediscovery of the Van Gogh
painting Sunset at Montmajour: for centuries, the painting was considered to be a
fake; it was misidentified and for a long time wrongly attributed. But in September
2013, the genuine authorship of Van Gogh was revealed through the use of modern
345
Ibid. and Demarsin and Schrage (2008), p. 563.
346
See in general Bandle (2016).
347
Siehr (2008), p. 22.
348
Dutton (2005), p. 260.
349
Ibid.
scientific authentication methods.350 Such an erroneous attribution only becomes

fraudulent when the person making the assumption presents a mere guess as
profound and researched knowledge and thus, gives it an authority which it does
not deserve. The preceding discussion already demonstrates that authenticity is not
only concerned with rooting out forgeries in the art market. The desire to establish
nominal authenticity of an artwork and answer ensuing questions, such as whether
the artwork was indeed painted by the artist himself or by his studio as well as the
verification of its provenance, are not only relevant aspects for the determination of
its market value but can also be traced back to the general desire to understand the
work’s original context. Answers to these issues help to determine the identity of an
artwork which can only be fully understood if it is considered in the right historical
and social context, by assessing it against a background of correctly determined
nominal authenticity.351
3.4.3 Authenticity and Forgery: A Brief Overview

of Historical Developments
It is argued that the period between antiquity and the twentieth century laid the
foundation for modern art forgery because it established the notion in the art world
that “perception is more important than truth”.352 In addition, the focus on the single
artist as the sole creator emerged in the Romantic era and is thus a relatively recent
concept.353 According to Lenain, nothing before the Italian Renaissance would
clearly qualify as art forgery and “we must wait for the dawning of ‘modern times’
to hear the first stories of artworks made to deceive as to their own origin by means
of stylistic mimicry, artificial ageing and the setting up of a spurious context of
reception”.354 It was indeed the Romantic era which established the concept of the
sole creator of a work of art as a “solitary, often struggling artist, painting by
flickering candlelight in a draughty garret”.355
Consequently, visual arts came to be considered as the individual expression of
an artist’s personal emotion. Importantly, this caused the aesthetic appreciation of an
artwork to be equated with esteem for its author. As a result, the Romantic idea of the
independent and autonomous artist developed into an exclusive notion of authorship
350
Siegal (September 9, 2013).
351
Dutton (2005), p. 260.
352
Siehr (2008), p. 23.
353
Ibid. p. 16 Lenain (2011), p. 248. In ancient times and the Middle Ages, the authorship of a work
of art was almost completely meaningless.
354
Lenain (2011), p. 13.
355
Charney (2015), p. 16 and Demarsin and Schrage (2008), p. 563. See also Kemp (2003), p. 3. In
Kemp’s words, this is the “post-Romantic myth of the fiery creator, driven only by passion and
instinct, representing the antithesis of analytical sobriety”.
and this perception is upheld in today’s view of a work of art as the personal and
individual work of an author, rather than the result of an artistic process.356 Demarsin
and Schrage argue that this development explains the contemporary focus on
identifying the real author of any detail and component of an artwork.357
Historically, successful artists have always maintained studios in which assistants
learned their craft; otherwise, master artists could never have been that prolific.358
Furthermore, it became common practice during the Renaissance that artists’ studios
would work on commissions, with the master only working on the most difficult and
delicate parts of a painting.359 In this process, the apprentices and assistants copied
the master’s works with the aim of becoming indistinguishable from the master’s
own work. It is therefore suggested that there is an element of “master-apprentice”
relationship in all cases of forgery. As a result, the concept of authorship does not
have a single and clear, but rather a layered content.360 Even after an artist’s death,
co-workers and other painters would complete his work and this did not jeopardise
the attribution of the finished work to the master. In addition, those painters in the
Renaissance and the early modern period who were able to produce skilful dupli-
cates were not condemned, but venerated.
According to Lenain, the lack of moral condemnation can be explained by the
belief that a copy was taken as authentically equivalent to the original.361 Looking at
historical concepts and developments, the question arises whether the contemporary
perception of authenticity, with its strong focus on identifying the sole creator of an
artwork, is technically feasible. Hoogcarspel and Schieveld, for example, stress that
the principle of falsifiability does not apply to art historical research: falsifiability is a
criterion for demarcating the limits of scientific enquiry. In other words, in order to
be used in scientific research, something must be able to be proven false; statements
that are not falsifiable are unscientific.362 This illustrates the fact that art historical
research is always to a certain degree subjective and relative: for instance, visual
inspection inevitably involves a degree of subjectivity and scientific analysis can
determine that an artwork’s physical characteristics do not match its purported date
of creation, but cannot help in positively authenticating or attributing the work to a
certain artist.
356
Demarsin and Schrage (2008), pp. 564f. See Romero (2010), p. 26. Here, an artwork is described
as an “artefact of [an artist’s] emotional and cognitive journey”.
357
Ibid. p. 565.
358
Lenain (2011), p. 16. For instance, it is argued that the copy of the Mona Lisa in the Prado is the
work of a pupil of Leonardo da Vinci’s studio which was painted at the same time as the original in
the Louvre. This conclusion is based on the finding that both the original and the copy have similar
underdrawings, indicating that the composition was developed piecemeal. Such underdrawings
would not be present if the copy had been directly painted from the finished original.
359
Ibid.
360
Demarsin and Schrage (2008), p. 564.
361
Lenain (2011), p. 175.
362
Popper (1989) in Seiffert and Radnitzky (1992), pp. 82f and Hoogcarspel and Schieveld
(21 April 2017), p. 1088.
3.4.4 Methods of Authentication
The general methodology of authentication is two-fold: there are observation-based

opinions which follow traditional art historical connoisseurship and on the other
hand, scientific, technologically based opinions on authenticity. While the former
seeks to establish that an artwork is either authentic or inauthentic, the latter, even
though more objective and more comprehensible, is limited to the finding that the
scientific evidence is or is not consistent with an observational conclusion. It is
important to keep in mind that the opinions of both connoisseurs and scientists are
subject to the ever-present possibility of new information coming to light that adds to
their knowledge and causes them to reconsider their previous opinion.363 Until
recently, it was the connoisseur’s opinion and eye that were primarily relied upon.
A connoisseur is an expert who has extensively studied an artist’s visual and stylistic
characteristics and has developed an intrinsic familiarity with his œuvre.364 Since art
history could not be studied in an academic setting before the middle of the
nineteenth century, art expertise was, for centuries, passed down from artist to
pupil and from collector to inheritor.365 This also means that virtually anyone who
proclaimed he was an expert could issue certificates of authenticity and even though
the art trade relies to such degree on the abilities of connoisseurs and experts, the
profession of art expert has never been legally regulated.366 Instead, the market
established its own system to determine whose opinion is authoritative and who
enjoys the power to provide a globally recognised answer to questions of authentic-
ity and attribution.367 With regard to certificates of authenticity, it is argued that the
trade used to be of the opinion that the more certificates an artwork had, the less
likely it was authentic.368 In the context of authentication, art historian Bernard
Berenson was seen as the “connoisseur of connoisseurs”.369
Berenson worked as a professional authenticator, was a world-famous expert on
Italian Old Masters paintings and one of his certificates of authenticity was as close
as a dealer could get to an “iron clad” guarantee of authenticity.370 But Berenson was
363
For instance, previously unknown artworks can be discovered or lost artworks rediscovered. In
the context of scientific research, such discoveries can place evidence in another factual context:
current assumptions about which canvas or pigments a given artist used must constantly be
reconsidered (for instance, because materials were earlier available for use than initially thought).
This can change a prior scientific conclusion that a given work was (in)consistent with what had
previously been considered to be characteristic materials in an artist’s œuvre.
364
Charney (2015), p. 23, Demarsin, Proefschrift (2008a), p. 91 and Demarsin, Handel in
kunstvoorwerpen, p. 108.
365
Ibid. p. 24 and Tromp (2010), p. 30.
366
Ibid, and Tromp (2010), p. 19.
367
Bandle (2015), p. 381.
368
Spencer (2004a), p. v.
369
Charney (2015), p. 24. For Berenson’s biography see Secrest (1980). See further Secrest (2004),
Samuels (1979) and Cohen (2013b).
370
Ibid. and Partsch (2010), p. 108.
involved in various authentication scandals, a case in point why reliance on con-

noisseurship alone can be troublesome. Berenson worked most closely with Sir
Joseph Duveen, the leading art dealer in Europe in the first half of the twentieth
century, and Berenson was tasked with attributing previously unattributed Renais-
sance works to renowned artists, securing Duveen a considerable profit.371 However,
their business relationship ended over an authentication debate concerning the work
Allendale Nativity or The Adoration of the Shepherds (circa 1505), which Duveen
attributed to Giorgione, but Berenson thought to be by Titian.372 The distinction
between works by Giorgione and Titian has ever since divided scholars: due to the
fact that both were pupils of Giovanni Bellini, their early works are not easily
distinguishable and some historians even argue that Giorgione may have never
existed and that his existence is merely a pseudonym for the young Titian.373 The
main difference, however, is that Titian lived well into his eighties and created over
100 paintings, while Giorgione died at the age of 32, having produced only 12 paint-
ings, of which five survive, and one drawing.374 Therefore, a work by Giorgione is
far more valuable and understandably, Duveen favoured an attribution to Giorgione.
Ironically, even though Berenson refused to agree with this attribution, the painting
has ever since been attributed to Giorgione.375
Back in the 1920s, figures like Duveen and Berenson openly scoffed at scientific
evidence and questioned its worth in matters of attribution and authentication.376 It is
furthermore suggested that Duveen decided to take part in what is called a “show
trial” against the Hahns because it allowed him to openly parade traditional
connoisseurial expertise and to educate the public in the ways of connoisseurship.377
From a scholarly perspective, it is even claimed that Duveen—who relished risk—
wanted to assert the legal validity of his connoisseurship which was central to his
business and which he saw challenged by new scientific techniques.378 At trial,
Duveen’s testimony rested entirely on visual connoisseurship; he explicitly rejected
documentary evidence and provenance—even though it would have favoured his
371
Charney (2015), p. 25, Cohen (2013b), p. 4 and Secrest (2004), p. 320.
372
Secrest (2004), p. 444. The painting is now displayed at the National Gallery of Art in
Washington D.C. See further Gibbons (1978), pp. 23–34.
373
Ibid. and Joannides (2001), p. 46. The problem is that there is no primary source evidence that
Giorgione existed other than a death document dated October 1510 and two other documents
referring to one of his paintings, which are lost. Moreover, the only two principal sixteenth century
sources, Marcantonio Michiel’s Notes of a Connoisseur and Vasari’s The Lives of the Artists are
both considered unreliable and inadequate, with each doing little to verify or clarify the information
provided by the other.
374
Ibid. See Brown and Ferino-Pagden (2006), pp. 42f.
375
Gibbons (1978) and Joannides (2001). See also the Washington National Gallery of Art’s
website https://www.nga.gov/collection/art-object-page.432.html [last visited March 30 2022].
376
Brewer (2009), p. 5.
377
Brewer in Antal et al. (2015), p. 98 and Hahn v. Duveen 133 Misc. 871, 872, 234 N.Y.S. 185
(Sup. Ct. N.Y. Co. 1929).
378
Ibid.
case—because he considered the picture to be “wrong” and for him, this was in itself
a sufficient reason for his finding of inauthenticity.379 Moreover, Duveen disparaged
the use of X-rays, chemical analysis and ultraviolet light for dating and analysing
artworks on the ground that they concerned the object itself and did not address the
picture’s quality and the spirit or genius that is associated with the work of a great
master.380 However, not all experts reacted in the same spirit as Duveen: in 1924, art
historian Jacob Baart de la Faille called for the creation of an “official authentication
bureau” in each country that would research, certify and register works of art.381
Affiliated experts would work free of charge and the price of an assessment or
certificate would no longer be based on the price the authenticated work was
expected to command.382 Moreover, experts were advised to consult technicians,
if necessary, and issue well-documented reports. Dutch art critic Cornelis Veth
supported de la Faille’s idea since shared responsibility among experts would
make their opinions more authoritative, and acknowledged that scientific evidence
could provide much-needed objective support.383 Ever since, connoisseurs have
come under growing professional pressure to deploy a combination of both con-
noisseurship and science and have to respond to the growing sentiment that inno-
vations in science and technology can solve problems that had previously been
invisible, even for the “trained eye”.
As a result, developments in authentication processes since the twentieth century,
advances in scientific testing, and research into provenance have come to support
connoisseurship, which was initially considered to be the only way of determining
authorship.384 These means shifted the focus from solely trusting the opinion of
experts, even though they are usually only employed as a secondary means if experts
disagree or if doubts about a work’s authenticity have been raised.385 While these
tools are complementary in the sense that a connoisseur’s opinion should be
supported by archival or scientific evidence, the market reality foremost trusts the
opinion of its acclaimed experts and their reputation, causing many practical short-
comings, as illustrated by the case studies above.
379
Okil in Weiss and Chartier (2004), p. 228.
380
Brewer (2009), p. 98.
381
Tromp (2010), p. 34.
382
Ibid.
383
Ibid. p. 35. See further Veth (1932).
384
Ragai (2015), p. 191. See also Whitmore (2003), pp. 27ff. Available at https://nap.
nationalacademies.org/read/11413/chapter/4 [last visited March 30 2022].
385
Bandle (2015) p. 381.
3.4.4.1 Scientific Analysis
The trial against Otto Wacker in 1932 was the turning point which brought attention
for the first time to the role of scientific investigation in authentication cases.386
Wacker claimed to represent a Russian collector who, after having escaped the
Communists, was forced to sell his collection of 30 Van Gogh paintings. However,
several buyers argued that the works were forgeries and accused Wacker of fraud.
The authenticity of Van Gogh’s œuvre had already become a source of dispute
directly after his death387 and at Wacker’s trial, two renowned experts, Jacob Baart
de la Faille and H.P. Bremmer, could not agree which if any of the paintings were
authentic.388 De la Faille is the author of the first catalogue raisonné on Van Gogh
and Bremmer was an art expert who had the reputation that “even if Odilon Redon
himself would declare one of his paintings to be the best, Bremmer would still know
that it was a forgery, because declaring authenticity was Bremmer’s job and not the
artist’s.”389 During the proceedings, the police identified Wacker’s brother as the
forger behind the paintings since a number of unfinished “Van Goghs” were found in
his studio. In addition, Martin de Wild, a chemist and probably the first forensic
investigator in art authenticity revealed that the oil paint contained resin and lead,
which causes the oil paint to dry faster, but was in fact never used by Van Gogh.390
The Wacker trial was thus important for pointing out the limitations of traditional
expertise and the growing relevance of scientific evidence: objective results of
scientific research were employed to reveal, and prove, what experts were not able
to detect or at least agree on.391
However, one of the most obvious deficiencies of scientific testing is that it can
only exclude positive attributions and confirm already existing doubts, but it is not
able to give definitive answers about authorship. The younger an artwork and the
more attention its creator, in this case its forger, has paid to selecting correct and
authentic material, the harder, if not impossible, it will be to draw conclusions based
on scientific research. There are several scientific methods used in the process of
authentication and historical interpretation and with advances in technology, new
386
Charney (2015), p. 26 and Leach (2004), p. 289. See also Rathbone et al. (2013), p. 9.
387
Tromp (2010), p. 25. Controversies over the authenticity of Van Gogh’s works have been raging
for more than a century. After his death in 1890, Vincent van Gogh left an œuvre of uncharted
proportions. Unfortunately, his brother Theo, who had knowledge of the size of the œuvre and who
would have inherited the droit moral, died soon after. As a result, the first documentation of his
work was not published before 1928. See further Hendricks and van Tilborgh (2011), p. 145.
388
Charney (2015), p. 27, Nici (2015), p. 174, Partsch (2010), p. 185 and Leach (2004), p. 289.
389
Tromp (2010), p. 43.
390
Charney (2015), p. 27. Wild’s analysis also led to the dismissal of a “Van Gogh” that was
acquired from Wacker by the renowned American collector Chester Dale. Although this painting
was found to contain resin, too, Dale stubbornly insisted that the painting was genuine: “I know of
course that this is a controversial painting, but as long as I am alive, it will be genuine.” In Ecksteins
(2012), p. 225.
391
Brewer (2009), p. 155.
methods are added, and older ones improved. The following section gives a brief
overview of some examination techniques and highlights the difficulties of their
practical application. First of all, X-radiography is used to analyse the composition
of a painting, in particular underdrawings and pentimenti: an alteration in the
composition of the painting as evidenced by traces of the previous work is seen as
an expression of a true creative process.392 Since X-rays penetrate down to the
support layer of a painting, the structure of the panel or the support on which the
respective work is painted can also be examined. Second, infrared reflectography
(IRR) has proven to be a versatile, non-invasive scanning technique used to disclose
structures that lie beneath the paint surface: the resulting image and the contrast of
absorption of different materials reveals the layers of paint which are not visible to
the naked eye, such as underdrawings and compositional changes.393 However, it
must be taken into account that none of these factors are absolute and that it is up to
the researcher to give weight to the interrelationship and interpretation of the
findings. Infrared imaging, for instance, cannot approximate the effects of aging or
the varied thicknesses and mixtures of paint. Moreover, even if researchers’ inves-
tigations reveal that the underdrawings are in fact another painting which was
overpainted, it is almost impossible to draw further conclusions from these results
since it remains unclear who painted the original image and no information regard-
ing the materials used underneath can be deducted from such radiographs.394
Nevertheless, it is advocated that these investigations should be mandatory in
preceding second sources of information that concern the analysis of the material
composition.395
One of the most straightforward methods of investigation is ultraviolet radiation,
which is used to determine surface anomalies. Varnishes fluoresce differently
depending on their age and composition: under ultraviolet light, naturally aged
varnish appears greenish yellow, while newer synthetic varnishes appear milky to
purple.396 In addition, chromatography and mass spectrometers can be used to
determine the organic components of paint, by dissolving a paint sample and
analysing the released gas.397 Since the majority of techniques are complex, time-
consuming and expensive, it does not come as a surprise that research into
392
For more details regarding the different methods see Art Institute Chicago, Examination
Techniques, available at http://www.artic.edu/collections/conservation/revealing-picasso-conserva
tion-project/examination-techniques/x-radiography [last visited March 30 2022]. See also
Whitmore (2003), p. 29.
393
Whitmore (2003), p. 29 and Faries (March 2003), p. 103.
394
For an interesting study of Francesco Guardi’s The Marcus Place in Venice with the Orologio,
which in fact reveals such an overpainting, see Schreiner et al. (2004), available at https://citeseerx.
ist.psu.edu/viewdoc/download?doi=10.1.1.278.7341&rep=rep1&type=pdf [last visited March
30 2022].
395
Faries (2003) and Whitmore (2003), p. 29.
396
Ibid. See also Ragai (2018), pp. 142ff.
397
Charney (2015), p. 271. For an extensive discussion of new developments in this field see Bronk
et al. (2001).
authenticity does not yet include them as standard components. Furthermore, as has
been already hinted at, scientific analysis is able to provide information about the
materials used and to assess the characteristics of a painting but cannot give a
positive statement about authenticity and authorship. The finding of anachronistic
material or other inconsistencies may simply lead to the suspicion that the analysed
work is a forgery. Therefore, scientists stress that, in the quest for authenticity,
“absolutely [. . .] both sets of skills” are needed, implying that their profession alone
is not capable of ensuring complete success against art forgers, nor are classical
non-scientific methods.398
Case Study: Fingerprint Analysis in the Context of Authentication
So far, forensic science has been presented as objective and verifiable—in contrast,
to the seemingly subjective and unverifiable results achieved by connoisseurship.
But contrary to what one might expect, there are unexpected similarities between
these seemingly conflicting forms of knowledge.399 A case in point is the following
dispute, which presents the juxtaposition between art connoisseurship and forensic
science: a painting that was bought at a yard sale for $5 remarkably resembled
Jackson Pollock’s drip paintings. IFAR, the primary organisation still authenticating
Pollocks at the time, denied authenticity based on the lack of provenance, physical
details and its connoisseurial judgement about the quality of the painting.400 Subse-
quently, the painting was analysed by Peter Paul Biró, who had pioneered the use of
forensic scientific techniques in art authentication. In fact, he detected a fingerprint
on the canvas which could be matched with a fingerprint found in some paint in
Pollock’s studio that had been preserved as a historic site.401 Yet, IFAR still denied
authenticity and soon there were allegations that Biró had forged the fingerprint and
specifically located it on the disputed Pollock. Interestingly, that brought the whole
case into the realm of forensic analysis and required a third form of expertise:
namely, the ability to distinguish whether a fingerprint was imprinted naturally by
a human finger or whether it had been placed on the canvas by artificial means. It is
argued that this expertise is a form of connoisseurship, too and in fact, a U.S. judge
had already before compared fingerprint experts to art appraisers:
[. . .] like art connoisseurs, fingerprint examiners (and forensic scientists from several other
disciplines as well) do not have a set of hard rules or strict quantitative measurements that
determine when their visual assessment of two print images leads them to reach a conclusion
that two images derive from the same ‘hand’. Instead, like art connoisseurs, fingerprint
examiners’ conclusions are characterized as expert judgements that are vouched for by long
398
Stafford (7 September 2011).
399
Cole (2010), p. 85.
400
Ibid. and Grann (July 12, 2010).
401
Ibid. The Pollock-Krasner House was declared a National Landmark in 1994 and is open for
visits by the public, see https://www.stonybrook.edu/commcms/pkhouse/housestudio.php.
experience looking at print images. As David E. Bernstein has noted, ‘much of forensic
science testimony is actually connoisseur testimony disguised as science.’402
In addition, the National Academy of Science also acknowledged that the assess-
ment of fingerprints is largely subjective, based on human interpretation and that the
method does not specify a standard test protocol.403 Furthermore, despite not always
being fully accepted, fingerprint identification is also not infallible but inherently
probabilistic.404 In sum, the result seems to speak less to the correctness of one
version of the truth, than to the limitations that all forms of expert knowledge,
whether connoisseurial or scientific, have in producing “what we tend to think of
as truth”.405 Instead, it made clear that both the examination of a painting’s author-
ship as well the identification of a fingerprint require an entirely different level of
empirical support than experts’ mere reliance on their experience-based way of
seeing. As a result, it should be acknowledged that every subjective form of expertise
brings about a certain uncertainty that needs further scrutiny and if possible,
supporting evidence.
3.4.4.2 Practical Implications in Recent Forgery Cases
In order to determine authorship and attribution, scientific evidence has to be

supported and supplemented by the knowledge of a connoisseur.406 An example
that illustrates these complexities is the case of Lempertz v Trasteco, involving the
Beltracchi/Campendonk forgery Rotes Bild mit Pferden (1914).407 Scientific analy-
sis found traces of titanium white in the paint layer, a straightforward anachronistic
component to the alleged date of creation.408 During the proceedings, the court
summoned four experts to testify on the painting’s authenticity. Lempertz had relied
on the positive opinions of Andrea Firmenich, author of the catalogue raisonné, who
confirmed the painting’s authenticity. Furthermore, Lempertz argued that scientific
analysis was not a standard procedure prior to sales and that its absence could not be
equated with the lack to exercise due care.409 After Trasteco had subjected the
painting to scientific analysis, Firmenich herself also instructed the Doerner Institute
to analyse the paint: even though the tests revealed the same titanium white, the
scientists drew a different conclusion and did not arrive at a clear verdict. Due to the
painting’s good condition and the fact that the resin acid layer of the varnish did not
allow for proper analysis, the Institute decided to leave the final word to art
402
United States v. Llera Plaza, 179F. Supp. 2d 492. E.D. Pa. 2002.
403
National Research Council (2009), p. 139.
404
Cole (2010), p. 87.
405
Ibid.
406
The Economist.com (5 August 2008).
407
408
Maak (16 September 2010).
409
historians.410 A second analysis was conducted by Nicholas Eastaugh who con-

firmed the existence of titanium white and concluded that the painting was, with a
probability of 99.8%, not painted in 1914.411 At the same time, Firmenich provided
the court with her conclusion that the painting was authentic, based on the assump-
tion that Campendonk himself could have added the titanium white later, during a
visit to his friend Alfred Flechtheim’s gallery.412 In line with this, the court-
appointed museum curator Sabine Roeder (Kunstmuseum Krefeld) assented to
Firmenich’s conclusion and confirmed the painting’s authenticity. It was only
when the Sammlung Alfred Flechtheim label was analysed, did the scientists dis-
cover that the glue used to affix the label was anachronistic and that caffeine was
used to artificially age the paper.413 Hence, the conclusion was drawn that not only
the label, but also the painting itself must be a modern forgery.
This example perfectly demonstrates that even four experts—art historians as
well as scientists—were not able to produce a conclusive and unanimous opinion.
Despite scientists’ finding that some of the pigments were anachronistic, art histo-
rians nevertheless concluded otherwise. Being convinced of the painting’s other
characteristics, including its stylistic features, condition, and provenance, they went
so far as to consider the idea that the artist himself added the titanium white some
20 years later, when reworking the painting in Flechtheim’s gallery. Seine (Brücke
mit Frachkähnen, 1935), another Beltracchi/Max Ernst forgery is also an example
serving the same purpose. Even though scientists detected phthalocyanin, a blue
pigment, not yet available in 1935, this finding did not raise any suspicion as it was
again taken into consideration that the blue pigment could have been added during
later restoration works.414 Consequently, there should be a constant dialogue and
knowledge-sharing between scientists and fine art experts to come to conclusive
judgements. According to Nicholas Eastaugh, involving scientists is increasingly
becoming part of the due diligence process, but while there is a variety of services
offered, the level and quality of the services are incredibly varied. In addition,
scientists also developed an algorithm which is said to be capable of ascribing
410
Ibid. The research was conducted at the Doerner Institute, which also supervises the inventory of
the Bayrische Gemäldesammlung.
411
Ibid. p. 25 and White (May 21, 2015). Available at https://privateartinvestor.com/art-risk/art-
crime/dr-nicholas-eaustaugh-how-i-uncovered-the-forger-of-the-century/ [last visited March
30 2022]. According to Nicholas Eastaugh, “People were developing titanium white in the second
decade of the 20th century but in essence no artist was actually using it that early, and we don’t
really find it in paintings until the 1940s and 50s”.
412
413
Ibid. p. 28.
414
Ibid. p. 44. Dr. Erhard Jägers, head of the laboratory in Bornheim, was asked by Henrik
Hanstein, owner of Kunsthaus Lempertz, to examine whether the paint contained titanium dioxide.
The result was negative, and the anachronistic blue pigment which was found under a thick coat of
varnish was not assessed as evidence of a possible forgery because “it could have been applied at a
later time, for example through restoration work”.
authorship to a painting based on brushstrokes and its texture.415 The rationale

behind this method is to enable computers to instantly recognise an artist’s finger-
print by checking it against a previously developed database which contains as many
scans of an artist’s œuvre as possible. Yet in the end, relying purely on computers
remains debatable and no matter how precise such algorithms become, art experts
should always have a say in the determination of authorship since neither of them is
immune to mistakes nor flaws. In particular, scientists’ potential success in dating
materials as well in identifying artworks’ internal and external structures is ques-
tionable when it comes to contemporary art: the best forgeries of contemporary art
are not stroke-by-stroke copies of already existing works, but rather new composi-
tions, (usually) created from authentic material, with an own character that is paired
with elements and characteristics of the forged artist.
It is now known that the paintings La Horde and La Mer, which Werner Spies
authenticated as genuine works by Max Ernst, were in fact painted and forged by
Wolfgang Beltracchi. However, Spies concluded that these paintings were actually
missing from the œuvre of Max Ernst,416 implying that Wolfgang Beltracchi man-
aged to create forgeries which are absolutely in conformity with Max Ernst’s style
and technique. Furthermore, it is stressed that “the best way to protect the art
market—and address the issue of regulation—is that of scholarship [. . .] because,
in the end, the experts are the only candidates who can provide the adult supervision
the market desperately craves”.417 It is obvious that a combination of the different
authentication processes should provide the strongest argument for credible deter-
mination of authenticity—however, in practice, the art world primarily still relies on
art expertise, despite its inherent subjectivity and well-documented flaws.418 In the
end, experts might err in their opinion, either in good faith or negligently, or are
unable to arrive at clear decisions. The previous section exemplifies that neither art
experts nor scientists alone can give a definite and waterproof opinion on
authenticity.
3.4.4.3 The Role of Provenance
The word provenance derives from the French verb “provenir” which means “to
originate”.
An ideal and complete provenance provides a documentary record of owners’
names, dates of ownership, methods of transference and location of an artwork, from
415
The Economist.com (5 August 2008) and Elgammal (November 13, 2017). Available at https://
arxiv.org/pdf/1711.03536.pdf? [last visited March 30 2022].
416
“Für mich waren das Bilder, die im Werk von Max Ernst fehlten”, in Stern 8/2012, pp. 134f.
417
Maneker (February 2012).
418
Charney (2015), p. 32 and Conley (2004), p. 54.
the time of its creation until the present day.419 Despite its important role in the
authentication process, a complete provenance, i.e. the paper trail of historical
documents, only rarely survives intact over the centuries. In fact, it is more common
for an artwork to have an incomplete history of ownership than a complete one.
Therefore, provenance research is essentially a kind of detective work. This is
because many archives have suffered damage, the records of short-lived galleries
and auction houses have not been preserved and private owners have not saved or
not even created purchase records.420 And even those records that exist may provide
inadequate, incorrect and conflicting information. Complicating this situation even
further is the fact that such gaps in provenance can be used by forgers and fraudsters
to fill them in with their own creations. Forgers are notorious for creating false
documents as well, thereby intentionally corrupting the historical record.421
As a consequence, one must be mindful that provenance, including exhibition
labels and bills of sale can be faked as well. Hence, gap-free provenance should not
be considered as sole and conclusive evidence of authenticity. There is universal
consensus among art trade participants that provenance is of fundamental impor-
tance. In fact, even a New York federal judge stressed that “it is a basic duty of any
purchaser of an object d’art to examine the provenance for that piece”.422 However,
it is far from clear whether there are any standards regarding provenance.423 As
mentioned before, provenance is intended to be a “chain of title” that lists every
owner of a work since its creation, but in practice it is often a “non-exclusive listing
of interesting facts” such as prominent former owners (at least those who agree to
having their identity disclosed) and the inclusion in prestigious museum or gallery
exhibitions.424 Yet, more often than not, provenance will be incomplete, inaccurate
or not present at all.425 With the market’s aforementioned characteristics, it has
become obvious why aspiring to conduct more extensive into the ownership history
is often an impossible task. In addition, the variety of means by which the transfer of
an artwork’s ownership can take place complicates provenance research even fur-
ther. An artwork can be transferred by gift, sale or inheritance and particularly for
works of lesser monetary value at the time of transfer, it is not unlikely that no
records were created.426 The IFAR Provenance Guide and The AAM Guide to
Provenance Research recommend to gather as much information from the primary
419
IFAR (International Foundation for Art Research), Provenance Guide, p. 1, available at http://
www.ifar.org/Provenance_Guide.pdf [last visited March 30 2022].
420
Ibid.
421
Ibid. p. 2.
422
Davis v. Carroll, F. Supp. 2d, 2013 WL 1285272 (S.D.N.Y. March 29, 2013) at 35.
423
Spencer and Sesser (2013)
424
Ibid. p. 2 and Conley (2004), p. 55.
425
The case of John Myatt and John Drewe exemplifies that forgers can also corrupt official
archives by inserting their forgeries, giving them a history that appears to be legitimate and genuine.
See Salisbury and Sujo (2010). For further examples of how forgers manipulated literature and
exhibition catalogues see Effinger and Keazor (2016).
426
IFAR, Provenance Guide, p. 1.
source, i.e. the artwork itself.427 Inscriptions on the back of a painting, exhibitions
stickers, dealers’ and collectors’ marks as well as transport and customs stamps often
provide valuable information.428 As a second step, institutional and collection
records and catalogues raisonnés can be a source of further useful provenance
information. The IFAR Provenance Guide includes an overview of historical
resources, the most important photo archives and digitised databases that can ease
research.429
As a general remark, art litigation usually falls within three categories: disputes
concerning authenticity, value and ownership.430 In this respect, the provenance of a
work can have an influence on each of these three categories: provenance bolsters
claims of authenticity, but since forgers can falsify information such as ownership
marks, exhibition labels and collectors’ stamps, it is seldom accepted as the sole
proof of authenticity.431 Besides being a factor in establishing authenticity, a fully
documented provenance also has a positive impact on a work’s value. The same
holds true if a work has been part of a prominent collection: for instance, in 2016,
Eric Clapton sold three works by Gerhard Richter for a total of $77.3 million—in
2011, he had acquired the three works together for $3.4 million.432 Finally, prove-
nance helps in proving ownership if legal title is contested.433 In this context, certain
“red-flagged” names can indicate that an artwork was probably stolen, subjected to a
forced sale or otherwise misappropriated during wartimes, especially during the Nazi
Era.434 For instance, in 2013, Sotheby’s was sued for having failed to disclose in its
description that “H.W. Göring, Berlin” had owned the work in question.435 This
provenance is considered deadly as Göring and his personal curators are well known
for having raided European collections and confiscating valuable artworks for
Göring’s own collection which was displayed at Carinhall, his country home.436
Conversely, inaccuracies or incompleteness in provenance can also be interpreted as
representing circumstantial evidence that the work is a forgery. This again leads to
the question whether there are any industry standards or a methodology for prove-
nance research. Should galleries and auction houses who hold a work on consign-
ment, but do not own it, be included in provenance and to what extent does a seller
incur potential liability if the provenance provided to the buyer is inaccurate in a
427
Yeide et al. (2001). See also Flescher (2015) in Courtney (2015), p. 59.
428
429
Ibid. pp. 5f.
430
Ibid.
431
432
Freeman (December 28, 2016).
433
Ibid. and Demarsin, Proefschrift (2008a), p. 97. See also Demarsin, Handel in
kunstvoorwerpen, p. 116.
434
Ibid.
435
Brooks v. Sotheby’s, 2013 WL 1156067 (Cal. Super 2013).
436
For more information see Amore (2015), pp. 4ff. For a thorough discussion see Anton (2010),
pp. 576ff.
material respect or at least incomplete? And is it even realistic to expect an owner to

have full knowledge of provenance? In addition, attributions generally result from a
consensus among art experts and scholars.
However, it is not uncommon that this consensus changes because new informa-
tion, on provenance of medium, for instance, becomes available and this changing
nature of attribution and authentication has profound legal consequences for the
parties involved. Usually, art dealers and auction houses warrant the authenticity of
the artworks they sell in unequivocal wording. For instance, both Christie’s and
Sotheby’s warrant to the buyer for 5 years after the date of the sale that work is by the
artist identified in their catalogue.437 If consensus changes and experts no longer
deem an artwork authentic or attribute it to a specific artist, the disappointed buyer
can bring a claim for breach of warranty. When enforcing such warranties of
authenticity, US courts will decide whether the seller had a reasonable basis in fact
for making such a warranty at the date of the sale.438 In Dawson v Malina,439 the
New York Federal Court established the standard for breach of warranty claims in art
cases. In the case at hand, a New York gallery had sold Chinese ceramics and jade
objects, unequivocally attributing each work to a certain period of Chinese antiquity.
After the sale, experts expressed doubts as to the periods warranted by the seller.
Since the seller did not accept return of all objects, the buyer brought a suit alleging
breach of warranty. At trial, the experts expressed different opinions but agreed that
the attribution of a work to a particular era of Chinese antiquity is a “subjective
judgment [. . .] based on elusive characteristics such as the quality, character, for or
feel of the piece.”440 On the issue of whether there had been a breach of warranty, the
court held that the proper standard for determining such as breach should be whether
representations by the seller to the buyer had “a reasonable basis in fact” at the time
that these representations were made.441 The court found that the seller had not
undertaken investigation sufficient to have had a reasonable basis in fact for the
warranty and hence, the buyer was entitled to rescind the sale. In particular, the court
concluded that the seller’s language was “unequivocal and unqualified” even though
the nature of these Chinese artworks meant that it would be almost impossible for
any determination to be made with the level of certainty exhibited by the seller.442
Subsequently, the standard developed in Dawson v Malina was adopted in the
following four cases: Levin v Gallery 63 Antiques Corp,443 Levin v Dalva
437
Christie’s, Conditions of Sale: Buying at Christie’s, section E (2) Our Authenticity Warranty.
438
See further Sesser and Levine (2010).
439
Dawson v Malina, 463F. Supp. 461 (S.D.N.Y. 1978).
440
Ibid. at 463.
441
Ibid. at 467.
442
Sesser and Levine (2010). Such an attribution should have been qualified with “probably” or
“possibily”.
443
Levin v. Gallery 63 Antiques Corp., No. 04 CV 1504 KMK, 2006 WL 2802008
(S.D.N.Y. 2006).
Brothers,444 Inc., 459 F. 3d 68, Christie’s Inc. v SWCA, Inc.445 and Balog v Center
Art Gallery-Hawaii.446 As regards the contractual limitations of the warranty of
authenticity, the consensus of experts at a specific point in time is crucial.
Christie’s and Sotheby’s limit their warranty for authenticity if their catalogue
description corresponded to the generally accepted opinion of experts at the date of
sale and this warranty is further limited if authenticity can only be demonstrated by
means of scientific process not generally available or accepted for use at the time of
the sale, or a process that was unreasonably expensive. However, Spencer argues
that a buyer who insists on scientific testing after the sale, can rely on this evidence to
prove that the seller breached his warranty.447 Next to that, there is also the case that
not the consensus of scholars changes, but that a seller is sued for selling an artwork
with only incomplete provenance. Spencer and Seller cite the claim against an art
dealer who was accused of having provided incomplete provenance that did not
include all owners going back to the artist.448 Interestingly, the plaintiff did not
contend the painting’s authenticity, but rather that it would be harder to re-sell
without a complete provenance. He considered this omission to be material since
the provenance included a gallery that was part of a well-publicised forgery scandal
and claimed that a verifiable provenance would be necessary to re-sell the work.
However, the very same painting had been sold at auction with the same provenance
the dealer subsequently provided to the current buyer. The dealer did not have any
reason to investigate the completeness of the provenance, but also if he had tried to
do so, previous owners did not want their identity disclosed and hence, a more
complete provenance was not even feasible.449 Nevertheless, the buyer tried to
revoke the sale based on the incomplete provenance, arguing that the provenance
constituted a warranty under the Uniform Commercial Code (UCC) because it was
part of the basis of the bargain.450 The dispute was settled out of court, but according
to Spencer and Sesser, if provenance is indeed found to be part of the basis of the
bargain, and this is question of fact for a jury to decide, it will be hard to argue that
the respective sections of the UCC are not phrased broadly enough to encompass
provenance. This means that if the seller did not include an express disclaimer as to
444
Levin v. Dalva Brothers, Inc., 459 F. 3d 68.
445
Christie’s Inc. v. SWCA, Inc., 867 N.Y.S.2d 650 (N.Y. Sup. Ct. N.Y. County 2008).
446
Balog v Center Art Gallery-Hawaii, 745 F.Supp. 1556 (D. Haw. 1990). In addition, § 13.01
(2012) N.Y. ARTS & CULT. AFF. LAW was added, stating that a written confirmation of
authenticity is presumed to be part of the basis of the bargain and hence, creates an express warranty
for the material facts.
447
Sesser and Levine (2010).
448
Spencer and Sesser (2013), p. 3.
449
Ibid.
450
The applicable sections of the UCC provide that “any affirmation of fact or promise made by the
seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an
express warranty that the goods shall conform to the affirmation or promise” (§2-313 (1) (a) and
“any description of the goods which is made part of the basis of the bargain creates an express
warranty that the goods shall conform to the description” (§2-313 (1) (b)).
provenance’s completeness and accuracy in the agreement, the issue whether the
provenance provided in the sale constitutes a warranty can be subject of lengthy
litigation.451 Moreover, Spencer and Sesser stress that in such situations, the buyer
will certainly produce an expert who testifies about the importance of provenance in
the art trade, supporting the argument that the respective provenance was in fact part
of the basis of the bargain. And in addition, a claim for breach of warranty does not
depend on proof of the seller’s negligence or other culpability.452
This highlights the potential risk a seller assumes by providing a provenance that
he has not even a valid reason to doubt: if the provenance is found to be a warranty
and the inaccuracy or omission negatively affects a work’s value, the seller may
incur liability for this difference, irrespective of his good faith or lack of knowledge
of the error.453 Again, Spencer and Sesser provide an illustrative case in point
involving the purchase of a painting that had purportedly been part of a celebrated
1960s exhibition at a New York museum. The inclusion in the exhibition was an
acknowledgment of both the work’s value as well as its importance in the artist’s
œuvre.454 However, after further investigation, it was discovered that while the work
was supposed to be in the exhibition, eventually another work was selected. To make
matters more complicated, there were even documents indicating that the painting
was part of the exhibition, while in fact it was not. Even though the seller had no
intention to mislead or defraud the buyer, this new information made the work less
valuable than at the time of purchase. Unfortunately, this dispute was also settled
before any lawsuit was filed and hence, it remains unknown whether the court would
find that an erroneous exhibition history constitutes a breach of warranty.455 Until
now, there has been no judicial decision addressing the question whether an incom-
plete provenance and exhibition history give rise to a claim of breach of warranty
under the UCC. However, the Dawson standard makes clear that unqualified attri-
butions that do not have a reasonable basis in fact constitute a breach of the warranty
of authenticity. Thus, it should be a concern for sellers and buyers to define what is at
stake when such information is provided, especially when it is questionable whether
a complete chain of title and possession is achievable with no title registry for
personal property, given the great importance of anonymity and discretion prized
by collectors, not to mention the confidentiality of private sales. In addition to gaps
in provenance which concern a great number of artworks due to lost documentation
during wartime or as result of having been stolen or dispossessed during Nazi times,
the nature of the contemporary art market does not ease research into provenance: as
451
Ibid.
452
UCC §2-714 (2) states that “the measure of damages for breach of warranty is the difference at
the time and place of acceptance between the value of the goods accepted and the value they would
have had if they had been warranted, unless special circumstances show proximate damages of a
different amount”.
453
454
Ibid.
455
Ibid.
the case studies concerning Helge Achenbach456 and Yves Bouvier457 have illus-
trated, many art transactions are still characterised by a handshake mentality and
even when agreements are documented, this will usually be done in simple invoices
rather than in detailed contracts.
Furthermore, it often remains unknown whether the buyer is indeed the real buyer
or merely acting as principal or agent for a collector who prefers to remain anony-
mous. As regards more sophisticated art market participants such as international
auction houses, their conditions of sale include express disclaimers against liability
for faulty or inaccurate information, but this is not necessarily the case for smaller
galleries and dealers.458 Since it should not be overlooked that sellers are strictly
liable for errors and omissions they could not reasonably have foreseen or detected,
it is advocated that sellers should make this clear in a sales agreements—even though
this “much like a prenuptial agreement - [. . .] spoils some of the romance associated
with the purchase of fine art”.459 While this section gives an overview of the role of
science and provenance in authentication matters, it equally shows that these factors
cannot constitute single factors in the determination of authenticity. Therefore, the
next part will discuss the prominent role of art experts who still play a central role in
the process of authentication.
3.5 The Central Role of Art Experts
In questions of authenticity and attribution, the art market still calls on experts and
their knowledge and skill. This structure is characterised by reliance on a single
expert authority. As a consequence, market consensus only recognises the opinion of
specific individuals or committees, creating a seeming universal consensus on a
work’s authenticity and attribution, while in fact ignoring other experts’ potential
dissenting opinions.460 Leading art experts are frequently solicited to authenticate
artworks in the context of a sale and according to William Grampp, Professor of
Economics at Illinois University, the opinion of experts is one of the principal
determinants of price.461 It is suggested that “art experts make it their business to
acquire, increase and maintain their authority” with the goal of attaining “intellectual
456
Neuendorf (March 16, 2015a) and Keuchel (March 16, 2015).
457
Ramsay (2017), Fontevecchia (March 12, 2015) and Kinsella (March 30, 2016a).
458
Demarsin, Proefschrift (2008a), p. 282, and Demarsin, Handel in kunstvoorwerpen, p. 359ff.
In such cases, an object is sold “as is” and it is the buyer’s responsibility to assure himself of the
quality and condition.
459
460
Bandle (2015), p. 381 and Von Brühl (2008), pp. 47ff. In the German literature, this phenom-
enon is called “Meinungsmonopol” and “Zuschreibungsauthorität”.
461
Grampp (1989), p. 31 and Orenstein, p. 905. See also Schack (2017) in Weller et al. (eds)
(2017), p. 9.
3.5 The Central Role of Art Experts 179
ascendancy over a public of colleagues and laymen.”462 Since it is estimated that a

certain number of artworks by pre-modern artists are lost—implying that some of
them might indeed be found, including all artworks that were destroyed, stolen,
misplaced or are still un- or misattributed, the re-emergence of lost works seems
entirely possible and plausible. It is therefore understandable that many art historians
dream of re-discovering lost masterpieces, but occasionally surrender to wishful
thinking and overenthusiasm which lead to erroneous attributions.463 However,
there are also cases where experts and historians’ wishful thinking is proven right:
Rembrandt’s Unconscious Patient (Sense of Smell), Van Gogh’s Sunset at
Montmajour464 and da Vinci’s Salvator Mundi465 are just some examples of positive
re-attributions that hit the headlines and affected the artworks’ valuations tremen-
dously. Due to the vast information gap between the expert and most other market
participants, experts are considered to have “unique opportunities to use their
opinions advantageously or to wield them recklessly”.466
On the other hand, art experts are said to derive their authority from “the idea that
their sole interest is that of pursuing the truth”.467 While the art market recognises
experts as the unique and main point of reference for the validation of an artwork’s
authenticity, this system bears the risk that experts may abuse their power and enter
into a conflict of interest when they have a financial interest in the work they
authenticate.468 To make matters more complicated, it is usually not possible in
the opaque art market to establish experts’ interest or motivation behind their
decisions.469 The disputes over the authenticity of works by Van Gogh illustrate
the struggle of determining who can claim the title of authoritative expert and the
personal motives of the experts concerned.470 Involved in this struggle were Jacob
Baart de la Faille, an auctioneer, dealer curator and art critic, who published the first
catalogue raisonné on Van Gogh; H. P. Bremmer, a painter, collector, patron,
curator and advisor; A. M. Hammacher, also a critic, museum director and curator;
and lastly, V. W. van Gogh, the owner and caretaker of the largest Van Gogh
462
Tromp (2010), p. 16.
463
Charney (2015), p. 61.
464
Ragai (2018), pp. 3 and 58f.
465
Martin Kemp, who is an expert on Da Vinci, attributed the work to the artist because, among
other characteristics, “it had that kind of presence that Leonardos have . . . that uncanny strangeness
that the later Leonardo paintings manifest”. See Goldstein (November 17, 2011).
466
Orenstein (2005), p. 907.
467
Ibid. p. 17.
468
Bandle (2015), p. 382. Cf. the court in Lempertz v. Trasteco, where it was remarked that
specialists who are affiliated with an auction house are not acting independently and that their
opinion might be biased in favour of business decisions.
469
Ibid.
470
Conspicuously, art experts have so far been absent from sociological discussions of the art world.
But social aspects are increasingly used to attempt to explain why certain experts (in their capacity
as curator, dealer or collector) arrive at their respective decision.
collection.471 In many cases, these experts passed contradictory judgements on

questions of attribution and authenticity and it is suggested that part of this can be
explained by differences in knowledge and methodology, but that another part has to
do with social factors. Depending on their background, each expert will see the truth
according to his own perception.
As a result, there is a discrepancy between the art expert in the person of an art
critic or museum director as a promoter of art, and the dealer or auctioneer, who is
interested in making a profit. Adding to this, some collectors strive to enhance their
reputation and to immortalise themselves by means of their collection and hence,
fakes and forgeries would severely threaten their undertaking. Thus, it comes as no
surprise that curators, advisors and others affiliated with such collections have strong
interests in not having any forgeries detected in their holdings. Unlike medical
specialists, lawyers and accountants, art experts have no organisation of their own
to admit persons to their profession by a legal admission standard.472 This entails
that the profession of art expert or appraiser is not protected and that there is no
mandatory training or education.473 However, the French system, for instance,
recognises a droit moral, which vests the right to authenticate in an artist’s
heirs.474 The holder of an artist’s droit moral has the moral right to authenticate
and to challenge in court the authenticity of any work said to be by the artist in
question, whether his opinion has been sought or not.475 However, a court can
decide that the opinion of the holder of the droit moral is not definitive and that
other experts must be consulted as well.476 Obviously, conflicts of interest arise if the
holder of the droit moral both deals in and authenticates works of the same artist.477
This was the case in Findlay v Duthuit, where Marguerite Duthuit, Henri Matisse’s
daughter, was accused of manipulating her father’s market by disparaging works in
471
Tromp (2010), p. 19. Hammacher even made a successful appeal to the Dutch state to keep rival
experts from publishing their own catalogue raisonnés.
472
Ibid. p. 18.
473
Demarsin, Proefschrift (2008a), pp. 87f and Demarsin, Handel in kunstvoorwerpen, pp. 103ff.
See further Sanders (2016), p. 183. In Germany, experts can become public appointed after
successfully completing a training: these are “öffentlich vereidigte und bestellte Sachverständige”
(§36 Gewerbeordnung). Büttner and Finke in Hausmann (2014), p. 243.
474
This is based on the consideration that those closest to an artist are also likely to be the most
knowledgeable about his work. However, this system brings about the risk that the market is
disrupted by the interference of disappointed or venal spouses, children or grandchildren, whose
opinion is “clouded by their estrangement” and lacks professional judgement.
For an extensive discussion of the French system see Reeves in Spencer (2004), pp. 227ff.
475
Ibid. p. 194.
476
This was the case in Cour de Cassation, Case No. 93-11.418, judgment of 7 November 1995,
Jean Fautrier. The court concluded that the holder of the droit moral’s determination of authenticity
was incorrect and that the auctioneer who had relied on the opinion acted negligently because he did
not obtain other opinions.
477
Apart from financial motives, there can also be more subjective reasons why an artist’s heir
would deny the authenticity of certain artworks. For instance, purely personal motives can prompt
an heir to disapprove of particular works or a particular period.
the hands of rival dealers.478 Besides being active as a major collector and interna-
tional seller of her father’s works, Marguerite Duthuit also issued certificates of
authenticity as Matisse’s heiress and holder of the moral right.479 In addition, expert
opinions inevitably contain a high degree of subjectivity and this gives rise to
discontent, especially if the opinion expressed is based on poor or no justification,
unfortunately a common scenario. Strikingly, the fact that “connoisseurs seem to
have an almost supernatural sensibility in which authentic works communicate with
them” is accepted by other market participants.480 Whether it is the “uncanny
strangeness” which Martin Kemp finds in late Leonardos, Mina Gregori’s “imme-
diate and instinctive reaction” to an authentic Caravaggio or Whistler’s swooning
when confronted with a genuine Velasquez,481 the element of mysteriousness seems
to be always inherent in the connoisseur’s analysis.
But apart from relying on his personal instincts, an art expert should be expected
to perform a thorough examination, involving consulting all source materials and
other specialists, conducting appropriate scientific analysis, avoiding financial con-
flicts of interest, and, of course, being equipped with the necessary qualifications
rendering him competent to advance such an opinion.482 In this sense, the expert
would back up his own personal interpretation with scientific proof and hence,
transform a subjective opinion into an objective and substantiated expertise. If he
fails to live up to this standard, he runs the risk of facing a lawsuit for professional
malpractice. As exemplified by the previous discussion, the prevailing system,
however, instead undermines the critical assessment of attributions and discourages
scholarly debate.483 This is especially worrisome when seen in combination with
other recent developments such as the disbanding of several authentication commit-
tees and experts’ refusal to express opinions because of their fear of being sued.
478
Findlay v. Duthuit, 446 N.Y.S.2d 951, 953 (N.Y. App. Div. 1982).
479
The case was dismissed for lack of jurisdiction. For more information see King and Levin
(2006), p. 252.
480
Charney (2015), p. 67. To cite art expert Werner Spies, it is not possible to sell a painting by Max
Ernst without his confirmation of authenticity: “Ohne meine Expertise kann man einen Max Ernst
nicht verkaufen. Das ist so. Und ich habe mich nur siebenmal täuschen lassen. Ich habe gehört, dass
er [Beltracchi] über 200 Bilder gefälscht haben soll. Ich kann aber ganz fest ausschließen, dass es
noch weitere Max-Ernst-Bilder sind”. Interview in Stern 8/2012.
481
A lady once asked James McNeill Whistler to view her Velazquez painting. The artist glanced at
the canvas and announced it to be a fake. “But you hardly looked at it”, said the lady in protest.
“Madam”, replied Whistler, “I always swoon when I see a Velazquez.” In Levy (1991).
482
Ibid.
483
Bandle (2015), p. 382.
3.5.1 Shortcomings of Expert Opinion
As authenticity can only rarely be established with absolute certainty, there are many
examples where a change in expert opinion or a new evaluation of facts leads to a
change in attribution.484 Nevertheless, opinions on authenticity are rendered as
absolutes: an artwork either is or is not by the hand of a given artist and the canvas
or pigments analysed either are or are not consistent with the canvas and pigments
which are known to have been used by the artist in question. There is thus a conflict
between the inherent indefiniteness of authenticity opinions and their presentation
formulated as being absolute and certain. It is further worth noting that until recently,
connoisseurs and specialists in authentication and attribution remained strongly
convinced that every forgery is, or at least will be, detectable.485 The reason for
their confidence was that the nature of art was considered to make a perfect fake
necessarily impossible: it is said that in art, the author always leaves “irrepressible
traces of his own subjectivity, even when imitating as closely as possible the style of
others”.486
However, this form of reasoning has ever since been contradicted by the existence
of forgeries, most recently by Wolfgang Beltracchi or by the famed Getty Kouros,
which some say is ancient and others modern. In the latter case, scholars had to
recognise that their present level of knowledge leaves them unable to assign a
sculpture to either the sixth century BC or the twentieth century AD.487 So far, the
art market lacks effective means to resolve this dilemma. In general, if a commercial
setting requires factual disputes to be resolved with clarity, the solution is usually
based on all presently known information and without regard to future develop-
ments.488 Otherwise, a market would not be able to operate efficiently. Hence, there
is an imbalance between experts’ over-confidence and the fact that if there are
some—there must be many—forgeries still hanging on the walls of museums,
galleries, and private collections. Yet, the market does not seem to accept that, in
some scenarios at least, it will be factually impossible to answer questions of
authenticity with absolute certainty. Expert opinion in itself is prone to erroneous
conclusions. As a result, experts and those volunteering their opinions can be sued
on a variety of grounds. The following section will therefore take a closer look at the
legal regimes that apply to experts’ liability in different jurisdictions.
484
Hoogcarspel and Schieveld (2017), p. 1086. See also Van De Wetering (2001).
485
Lenain (2011), p. 15. Cf. the opinion of Friedländer who strongly believed that forgeries cannot
stand the test of time and that a new generation with “fresh eyes” will be able to distinguish between
fake and authentic works. Friedländer in Spencer (2004c), p. 40.
486
Lenain (2011), p. 15.
487
Ibid. p. 17. See further Kimmelman (August 4, 1991) and True (1987), pp. 3–11.
488
Similarly, in civil proceedings, questions of fact are answered by a preponderance of evidence, in
other words, by what is more likely than not true.
3.5.2 Erroneous Authentication and Attribution: Threats

of Liability
What happens if an attribution or authentication decision is later found to be

erroneous, an expert wrongly asserted that the artwork is or is not authentic, and
making use of complementary means of authentication such as scientific analysis or
science is simply of no assistance? And how is the expert’s standard of care defined
when giving an opinion or making an appraisal? Usually, an expert’s opinion is
requested for transactional purposes in the context of a sale and if the expressed
assertions inhibit a potential buyer from purchasing the work or cause him to have
the work returned and the purchase rescinded, the aggrieved owner may sue the
expert for failure to exercise reasonable care, breach of contract, fraud and misrep-
resentation as well for the common law torts of defamation and product
disparagement.489
In addition, a contractual relationship between the owner and the expert implies
that the expert owes the owner a duty of care, which depends on the circumstances of
the case.490 In the absence of a contract between the expert and the person suffering
damage from the erroneous expertise, an opinion that is given negligently, or an
intentional misattribution, can give rise to liability in tort. As will be discussed
within the framework of the catalogue raisonné in section 5, contractual liability of
the author of a catalogue raisonné is hardly relevant since in most cases, there is no
contractual relationship between the author and the owner of an artwork who
contests a decision.491 Usually, the author will publish a catalogue raisonné on his
own initiative or by order of a third party. Generally, exposure to legal liability can
benefit a profession by providing an incentive to maintain high professional stan-
dards. But in the art market, experts have shown a willingness to act unethically
despite the reputational risks involved and increasingly, are refusing to voice an
opinion altogether for fear of being sued.492
3.5.2.1 Introduction
Questions concerning liability for professional advice and expert opinion play an
increasingly important role in an art market that has become more complex and
litigious.493 Liability in this field is generally based on two poles: contractual
liability and tort liability. Although faulty statements which are rendered within
the scope of an information contract do not pose any problems regarding the ground
489
For more information see Spencer in Spencer (2004d), pp. 143ff, Orenstein (2005), pp. 906ff and
Demarsin (2004), p. 107.
490
Ibid.
491
Bert Demarsin, Expertise, veiling en certificaten in de kunsthandel, p. 136.
492
493
Häret in Weller and Kemle (2015).
for liability,494 it is in the non-contractual area that the basis for liability is a topic of
discussion. For instance, Swiss and German tort law have adopted the principle of
restricting tortious liability to absolutely protected property, so that pecuniary
property is not protected against negligent impairment but only against intentionally
inflicted harm.495 This plays a particular role in the context of the negligent provision
of incorrect advice: since only ownership and other absolute rights are protected, a
liability restriction arises in Swiss and German tort law. This has to do with the fact
that specific professional liability, in contrast to general professional liability,496
does not involve physical infliction of harm, but rather causes harm to arise because
of the contracting party or a third party following faulty advice.497 Since the harm
involves negligent interference with fortune, it is not directly protected by tort law.
Consequently, there have been extensive discussions and proposals on how to
escape this situation in these legal systems: they range from construing an implied
contract, the presumption of quasi contractual relationships (the theory of culpa in
contrahendo) to the suggestion to adopt the Anglo-US approach which requires only
the existence of an expert-client relationship.498 Apart from Germany and Switzer-
land, the United Kingdom and the United States, the following section will also
discuss the approaches taken by the French and the Dutch legal systems. In addition,
how tort law, with its objective parameters and reference points, deals with experts’
non-contractual liability will also be discussed.
3.5.2.2 Germany and Switzerland
To begin with, it is important to distinguish art experts’ liability from what is

normally understood from the term “expert liability” (Expertenhaftung). In the
past, the German Bundesgerichtshof [BGH] developed a specific liability scheme
for lawyers, public accountants and tax accountants, but unfortunately, did not have
an opportunity to determine whether this regime also applies to art experts.499
Generally, German law distinguishes between Experten and Sachverständigen.500
494
In cases of contractual liability, the focal point is on determining the concrete scope of the duty
of care.
495
Heinrich Honsell, Liability of Professional Advisors under Swiss and German Law, p. 2,
available at http://www.honsell.at/pdf/FSBaerKarrer.pdf [last visited March 30 2022].
See the general clauses in OR 41 (Swiss Code of Obligations) and §823 Abs. 2 BGB
(Bürgerliches Gesetzbuch).
This means that a case like Hahn v. Duveen would not have been possible in Germany as it lacks
the violation of a protected right. See Häret in Weller and Kemle (2015) and Brewer (2009).
496
For instance, this refers to a doctor’s liability for a faulty operation or a faulty performance of
repair work.
497
Honsell, p. 2.
498
Ibid. p. 3.
499
Blume Huttenlauch (2004), p. 118.
500
See BGH NJW 1984, 2365.
A definition was developed in case law and a Sachverständiger is a person with

exceptional knowledge in his area of expertise, which he offers to everybody in an
independent and objective manner.501 In addition, there is a publicly appointed
Sachverständiger (öffentlich bestellter und vereidigter Sachverständige).502 A
Sachverständiger has to adhere to several additional provisions, for instance, that
his appraisal must be in writing, independent and substantiated. While there is no
general definition for either of them, it is understood that an Experte is primarily
responsible for art historical examinations with the purpose of authentication or
attribution (Expertise), while a Sachverständiger is primarily tasked with estimating
and assessing the value of an artwork (Gutachten).503 In addition, German law
recognises the concept of Sachkenner.504
For instance, an auction house such as Kunsthaus Lempertz is considered to fall
under this definition and hence, clients can reasonably rely on their knowledge and
expertise, also with regard to their consignor’s trustworthiness.505 In this regard, it
must be taken into account that an art historical or stylistic expertise is issued in order
to confirm or deny the examined artwork’s authenticity and base its persuasive
power on the academic authority of the author.506 As mentioned before, liability
for a faulty expertise can have its basis in contract or tort law and importantly, an
expert can also incur liability vis-à-vis a third party with whom he does not have a
contractual relationship.
Contractual Liability
Contracts which provide for the rendering of an expert opinion, or the provision of
information are usually qualified as mandates (Aufträge) and contracts to manufac-
ture or repair goods (Werkverträge) in both Germany and Switzerland.507 In the
context of art experts, the work result owed is a professional report which expresses
an opinion. Of course, the expert opinion has to be free of defects of title and material
defects (§633 Abs. 1 BGB and OR 321a I and 321e). If this is not the case, the
principal may demand that the defect be remediated or else, may claim damages. For
a claim for damages to succeed, the defect must be attributable to the expert, i.e. it
See Mustersachverständigenordnung der Deutschen Industrie- und Handelskammer (Stand

26.03.2012).
501
“[. . .] eine Person mit überdurchschnittlichen Fachkenntnissen auf ihrem Spezialgebiet, die sie
jedermann auf Antrag persönlich, unabhängig, unparteilich und objektiv zur Verfügung stellt”.
502
See §132a Abs. 1 Nr. 3 und Abs. 2 StGB, §§ 3 und 4 UWG.
503
Senn (2013), p. 128. See also Fischer (2013), p. 42. In this regard, the terms Expertise or
Gutachten are generally used interchangeably.
504
This was established by the Bundesgerichthof in 1980, see BGH NJW 1980, 1619 at 30.
505
Trasteco v Lempertz at 85.
506
Blume Huttenlauch (2004), p. 120 and Siehr (2013), p. 44.
507
Blume Huttenlauch (2004), p. 120. For Germany, see §§631 and 675 BGB, for Swiss law see OR
364 I and OR 398 I.
must be proven that he acted either intentionally or negligently (§276 BGB). The
important question then arises as to when an expertise can be considered defective. It
might be obvious that an expertise is faulty if it is incomplete and lacks essential and
relevant information. What is more complicated, however, is the issue if an expertise
can be considered defective if the opinion contained in the expertise is later proven
wrong. In such case, it must be determined whether the expert violated his duty of
care towards the principal. As regards the standard of care, German law provides that
professionals have to apply the “due diligence of a prudent merchant” as laid down
in sections 347 (1) and 384 (1) of the German Commercial Code.508 In detail, this is
the level of care that a prudent and considerate member of the relevant business
circle would apply (Sorgfalt eines ordentlichen Kaufmanns).509 By way of analogy,
such a standard could also be applied to art experts. Consequently, the level of due
care would be defined according to the diligence and skill that may be expected from
a competent professional acting under the same circumstances, taking into account
the information that was reasonably available.510 In particular, this means that an
expert has to perform a “thorough examination” (eingehende Untersuchung) before
concluding that an artwork is authentic or a forgery.511 In deciding whether an
examination is “thorough”, the time spent evaluating a work is not decisive.512
However, experts have to base their expertise on objective facts (nachweisbare
Tatsachen),513 must request information on all relevant circumstances from the
principal,514 and must check the correctness of that information.515 Importantly,
the expert must document the underlying reasons for his conclusion clearly and
convincingly.516 It is a characteristic of an art historical or stylistic expertise that it
does not always comply with this last requirement: frequently, experts do not state
the basis of their considerations and hence the expertise lacks traceability.517 This
fuels the important question whether a lack of traceability can amount to a material
defect of the expertise. There seems to be an agreement in the legal literature that
508
Kurtz et al. (2016), p. 28.
509
LG Köln, Case 2 O 457/08, judgment of 28 September 2012, at 75 and 78.
510
Bandle (2015), p. 386 and Blume Huttenlauch (2004), p. 124. The expert must act to the best of
his knowledge (nach bestem Wissen und Gewissen).
511
OLG Saarbrücken, Case 2001, 145, judgment of 7 February 2001.
512
Kammergericht Berlin, Case WRP 1994, 185–191, judgment of 13 August 1993.
The court takes into account that experts, based on their experience, are able to reach their
conclusions rather quickly.
513
BGH NJW 1998, 1059.
514
Ibid. NJW 1984, 355.
515
BGH NJW 1998, 1059.
516
517
As mentioned before, it is not uncommon that an expertise merely states that the work is
authentic or not, without giving an explanation.
experts’ opinions are inherently subjective and it is an acknowledged difficulty that

experts are often unable to verbalise them properly.518
Moreover, an expertise is generally formulated as a subjective opinion with the
consequence that the opinion expressed in the expertise cannot be judged right or
wrong.519 Siehr and Huttenlauch conclude that attribution and authentication deci-
sions in an expertise cannot be judged according to absolute and material criteria:
instead, an expertise is a Werturteil520 in the sense that it is an expression of personal
opinions.521 To make this clear, an expertise will generally state that it has been
compiled to the expert’s best knowledge (nach bestem Wissen und Gewissen).522
Therefore, experts in Germany are not exposed to a high risk of liability: traceability
of their opinion is not a prerequisite and only carelessness in evaluating the factual
basis could establish liability—523 but then again, an expertise is seen as an expres-
sion of opinions which are not actionable. At this time, there is no case known where
a German or Swiss court found an expert liable in damages.524 On the other hand,
Gutachten are usually verifiable based on objective criteria. For instance, it can be
evaluated whether a scientific report has been compiled correctly and accurately.525
In this regard, faultiness is relative to the prevailing state of the art if, at the time of
the examination, a certain discovery was scientifically impossible (but later possi-
ble), which will not automatically render the report defective. As regards the
standard of care pursuant to Swiss law, the same standard that also applies to an
employee under an employment contract applies and liability arises “on the basis of
the professional risk, degree of education or technical knowledge demanded by the
518
According to Max Friedländer: “the way in which an intuitive verdict is reached can, from the
nature of things, only be described inadequately. A picture is shown to me. I glance at it, and declare
it to be a work by Memling, without having proceeded to an examination of its full complexity of
artistic form”.
See Ragai (2015), p. 19.
519
Blume Huttenlauch (2004), p. 123. However, Senn argues that subjective methods can also be
performed according to objective criteria, for instance, according to accepted scientific standards.
See Senn (2013), p. 171.
520
KG Berlin, Case WRP 1994, 185–191, judgment of 13 August 1993.
521
Blume Huttenlauch (2004), p. 121, Siehr (2013), p. 51, Senn (2013), p. 171 and von Brühl
(2008), p. 20. According to Fischer (2013), p. 44, an expertise is a Wahrscheinlichkeitsurteil, since
it is based on a consideration and a weighing of facts rather than on absolute terms. See also Butin
(2020), pp. 213ff. This confirms Hoogcarspel and Schieveld’s theory that statements on authenticity
are not falsifiable.
522
Ibid. p. 46. However, as will be discussed further on, such general statements cannot be
interpreted as excluding liability altogether.
523
For instance, if the expert refers to provenance or other objective facts, he must check their
accuracy before he can rely on them.
524
Siehr (2013), pp. 50f and Schrembs (2017), p. 17.
525
Blume Huttenlauch (2004), p. 123. This includes, for instance, the correctness of both the kind of
methods employed and their execution, and the completeness of the circumstances considered.
work [. . .]”.526 The provision leaves room for the consideration of individual
circumstances and can be interpreted flexibly. Therefore, the prevailing doctrine
places higher requirements on an independent contractor than on an employee.527
The independent contractor must exercise the degree of care necessary and must
possess the average abilities of members of the same profession.528
Non-Contractual Liability
Are experts also liable towards a third party who relied on the correctness of their
expertise? Usually, an expertise will be given in the context of the contractual
relationship between the principal and the expert. Since the third party is not a
party to the contract, the claim would have to be based on tort liability. However,
while tort provisions also apply to third parties, their restriction is limited by §823
Abs. 2 BGB and OR 41.529 In order to close the gap left by the restrictive nature of its
tort law, German case law developed the doctrine of contracts with protective effect
for third parties (Vertrag mit Schutzwirkung zugunsten Dritter).530
This means that an advisory agreement can include third parties in its protective
effect who normally would have been excluded from the contract’s scope of
application. In particular, this applies if the information is designated for use by
the third party. For instance, if expert opinion is provided in the context of a sale, the
information is also intended for potential purchasers who rely on the expertise when
making their purchase decision. Consequently, they fall under the contract’s protec-
tive effect.531 The literature criticises this approach as leading to virtually unlimited
liability since it extends liability to each and every potential purchaser. Moreover,
critics refer to the fact that, usually, the protective effect of a contract is based on an
increased fiduciary duty by the party who claims a special degree of trust.532
However, while such an increased fiduciary duty will only arise under certain
circumstances, experts’ liability must stem from the interpretation of the contract
itself. This poses a problem because it cannot be assumed that experts would have
526
Honsell, p. 4. This approach has been criticised for various reasons: for instance, it fails to reflect
the need for different standards of liability for compensated and uncompensated work and it fails to
consider the differences between dependent and independent work, as well as the much greater
intensity of direction in the case of an employment contract.
527
Ibid.
528
Ibid. p. 5.
529
Siehr (2013), p. 52. As mentioned before, the application of the general tort provisions is limited
to the protection of only a number of rights.
530
Blume Huttenlauch (2004), p. 125 and Honsell, p. 10. §676 BGB denies liability for incorrect
information if no contract or tort exists.
531
532
Wiegand (1991), p. 222.
voluntarily entered into legal relationships with potential third parties as well.533
Therefore, legal fiction assumes such intent in order to achieve quasi contractual
liability: a scenario which is criticised because no expert or professional would
willingly subject himself to such an unlimited, unpredictable and no longer calcu-
lable or insurable risk of liability.534 With a view to keeping the risk of liability
calculable and insurable, it is advised that the number of protected third parties
should be limited and experts can do so by stipulating that their expertise is intended
for a specific purpose only and may not be transferred.535
As a consequence of the above, the literature suggests that liability should instead
be based on the doctrine of culpa in contrahendo, the presumption of a relationship
with a protective duty, now codified in §311 Abs. 3 BGB.536 In fact, Siehr argues
that after the reform of the law of obligations (Schuldrechtsreform) in 2002,
non-contractual liability can only be based on §311 Abs. 3 BGB.537 This type of
liability is considered to be based on trust (Vertrauenshaftung) and holds an expert
liable because he claims a special degree of trust and influences a third party to enter
into a contract with the principal.538 Hence, an expert will be liable towards a third
party, who is not a party to the contract, because the expert decisively influenced the
conclusion of the underlying agreement. On the other hand, the Swiss literature
bases the culpa in contrahendo on Art. 2 Civil Code and the presumption of such
protective duty relationship must involve a contact of a contract-like intensity.539
Yet, experts are able to make use of disclaimers and waivers in order to limit their
liability: under Swiss law, Art. 100 Obligationsrecht (OR) allows disclaiming
liability for simple negligence.540 Similarly, German law allows limitation of liabil-
ity based on §276 Abs. 3 BGB. However, since liability for intentional infliction of
harm may not be disclaimed, general disclaimers are legally void.541 Hence, an
expert can exclude liability for simple negligence and can limit the amount of
533
Ibid. p. 125, and Honsell, p. 12. According to §§133 and 157 BGB it must be evident from the
contract that the parties wanted to include the third party in the contract’s protective effect. See also
Sanders (2016), p. 185 who argues that an expert who gives an appraisal or opinion claims a certain
level of trust and has a direct interest in a successful transaction.
534
Honsell, p. 12. In other words, “the constructive intent of the party is the vehicle for a constant
expansion of compensatory damage liability”, a development which Honsell describes as a “dan-
gerous erosion of basic structures of the law of obligations”.
535
536
Ibid. p. 126 and Siehr (2013), p. 50. See also Ehinger (2015), p. 135.
537
Siehr (2013), p. 50. However, the courts did not yet have a chance to comment on the proper
basis for liability.
538
Ibid.
539
Honsell, p. 14.
540
Ibid. p. 5. Liability for gross negligence cannot be excluded.
541
Siehr (2013), p. 51 and Blume Huttenlauch (2004), p. 127. General statements that limit liability
such as “Für jedwede Mängel aus diesem Gutachten wird nicht gehaftet”, “Meine Angaben mache
ich nach bestem Wissen und Gewissen, jedoch ohne materielle Verantwortlichkeit”, and
“Eventuelle Rechtsansprüche gegen mich können aus diesem Gutachten nicht hergeleitet werden”
are therefore invalid.
damages for which he might be liable.542 Moreover, liability can also be limited
vis-à-vis third parties. Based on §311 Abs. 3 BGB, a third party is protected up to the
extent to which the expertise has justified reliance on it. This means that if it is clear
to the third party that the expert has limited his liability in the expertise, then this
limitation also applies to the third party.543 At times, information or advice might be
provided without a contract and free of charge. As regards Swiss law, the Swiss
Federal Supreme Court has developed a consistent body of case law which stipulates
that contractual liability can only arise if advice is provided in the exercise of a
business operation or in exchange of consideration.544 Subsequently, additional
criteria were developed in order to construe a contract: the economic interest on
the part of the party providing advice, the prior business relationship and the advice’s
economic importance for the recipient.545 German case law works with the fiction of
an “information contract by silence” (Stillschweigender Informationsvertrag).546
This means that case law developed the presumption of a contract concluded by
silence and the BGH has consistently expanded this approach, in particular as
regards incorrect information given by tax consultants and accountants to creditors
of clients or to potential purchasers, i.e. third parties with whom no contractual
relationship exists.547 In an exceptional case, the Swiss Federal Supreme Court
followed a similar approach: the Zurich branch of Sotheby’s had given a free
appraisal of a Jugendstil lamp (at CHF 8000–12,000) and the lamp was sold for
CHF 16,500. However, the actual value was later determined to be CHF 250,000.
The court presumed the existence of a mandate and held Sotheby’s liable for the
damage the client suffered.548 Drawing conclusions from this examination, it seems
that experts’ non-contractual liability in Germany is still subject to lively debate.
However, whichever path is followed, the differences mainly pertain to the con-
struction of liability and not to the legal consequences.
3.5.2.3 The Netherlands
In the Netherlands, if an art expert fails to live up to the expected standard of care, he
will encounter contractual liability based on Art. 6:74 of the Civil Code (Burgerlijk
Wetboek, or BW) and non-contractual, third-party liability on the basis of Art. 6:162
542
According to Huttenlauch, the expert may not invoke the disclaimer against a third party who
trusted the correctness of his expertise.
543
Siehr (2013), p. 51.
544
Honsell, p. 13.
545
Ibid.
546
Ibid.
547
Ibid.
548
Ibid. BGE 112 II 347. The court stated that it was not obliged to deal with older case law in which
it was held that information which is given neither in a professional context nor for compensation
cannot give rise to contractual liability.
BW.549 If there is a contractual relationship between the owner of an artwork and the
expert providing the opinion, Art. 7:401 BW obliges the expert to live up to a certain
duty of care: the applicable standard is the diligence of a reasonable and skilled
member of the same profession.550 Importantly, all relevant circumstances are
considered This means that the peculiarities of the art market play a significant
role in the determination of how the reference person of a reasonable and skilled art
expert would have acted: for instance, it is accepted practice in the context of
authentication and attribution that the first assessment is done based on visual
inspection and that scientific analysis is a supplementary means of authentication.
If there is no contractual relationship between the expert and the owner of an
artwork, Art. 6:162 BW names five conditions as a prerequisite for liability towards
third parties: unlawfulness (onrechtmatigheid), culpability (toerekenbaarheid), cau-
sation (causaal verband), loss (schade) and relativity (relativiteit). In Roubroucks v
The Van Gogh Museum, the owner of a purported Van Gogh painting, Stilleven met
pinksterrozen, sued the Stichting Van Gogh Museum, claiming that the Stichting
unlawfully denied an attribution to Vincent Van Gogh.551 The court of Amsterdam
concluded that the Stichting did not act negligently and hence, not unlawfully when
it decided that the painting in question could not be attributed to Van Gogh.552 In
particular, the court took into account that authentication is not an exact science and
that courts can only determine whether an expert, in forming his opinion, acted
according to the required duty of care:
Toeschrijving van een schilderij aan een bepaalde schilder is geen exacte wetenschap, maar
een beoordeling die moet worden overgelaten aan deskundigen. Daarbij komt het aan [. . .]
op een optelsom van elementen, zoals de herkomst, de voorstelling en de stijl van het werk.
De rechtbank overweegt dat de uitkomst van die optelsom afhangt van hoe de verschillende
elementen worden gewogen en geïnterpreteerd. Dat betekent dat verschillende deskundigen
tot verschillende uitkomsten kunnen komen, zoals in het onderhavige geval ook is gebleken.
[. . .] De rechtbank is er niet om in dit wetenschappelijk discours partij te kiezen, laat staan
om zich zelfstandig een oordeel te vormen over de vraag of het Schilderij wel of niet aan Van
Gogh moet worden toegeschreven.553
549
Hoogcarspel and Schieveld (2017), p. 1087.
550
Ibid.
551
Gerechtshof Amsterdam 22-09-2015, ECLI:NL:GHAMS:2015:3920 (Roubrocks v. Van Gogh
Museum). See also Koldehoff and Timm (22 July 2012).
552
A positive finding on negligence (onzorgvuldigheid) would have meant that the criterion of
unlawfulness (onrechtmatigheid) was fulfilled. As regards the other requirements, Roubroucks
would have needed to prove that he suffered financial damages resulting from the Van Gogh
Museum’s decision and that the damage was attributable to the latter.
The decision was upheld by the Dutch Supreme Court in decision HR 17-02-2017, ECLI:NL:
HR:2017:282 (Van Gogh).
553
Ibid. at 4.6. This translates to “the attribution of a painting to a certain artist is not an exact
science, but an assessment that must be left to experts. This process involves a number of factors
such as the provenance, the representation, and the style of the artwork. The court considers that the
outcome of this assessment depends on how the various elements are weighed and interpreted. This
means that different experts can arrive at different results, which happened in the case at hand. The
As a result, the courts will not take sides in the content of a decision but will rather
assess whether a decision was adequately researched and motivated. The applicable
standard is the diligence of a reasonable and skilled expert who is specialised in
authentication:
[. . .] de zorgvuldigheid die verlangd kan worden van een redelijk handelend en redelijk
bekwaam, gespecialiseerd vakgenoot in het authenticiteitsonderzoek van schilderijen.554
In the case at hand, the Van Gogh Stichting lived up to this duty of care by evaluating
the provenance, iconography and style, the technique, canvas, paint, signature and
other peculiarities and by outlining this in a detailed and consistent reasoning
(“voldoende duidelijk, begrijpelijk en innerlijk consistent”).555 Furthermore, the
court took into account that the Stichting Van Gogh Museum is a respected authority
for attribution decisions and hence, that they are subject to a correspondingly higher
standard of care.556 Consequently, courts in the Netherlands acknowledge that
experts can come to different conclusions and that it is not up to a court to take a
side in questions of authentication.557 For the determination of liability, it is impor-
tant whether an expert or institution has lived up to the required level of care when
forming an opinion and this includes that an expertise outlines the reasons for its
conclusion.
3.5.2.4 France
Contractual and Tort Liability
In France, experts’ liability is also based on the general provisions of contract and
tort law.
In the absence of a contractual relationship, an expert incurs tortious liability if he
acted negligently (Art. 1383 Code Civil). To determine negligence, the same
objective standard as in contractual liability applies, namely that of a bon père de
famille.558 Importantly, an expert is also liable against a third party: the Cour de
Cassation ruled in 2006 that violation of a fiduciary duty can also be based on a
court should not take sides in this scientific discussion, let alone form an independent opinion on the
question whether or not the artwork must be attributed to Van Gogh”.
554
Ibid. at 3.2. This translates to “the care that can be required of a reasonably acting and skilled
specialist in the authentication of paintings.”
555
Ibid. at 4.5.
556
Ibid. at 3.2. “Op het VGM rust de verplichting om, gegeven zijn status als (bijna monopolistische
gespecialiseerde) expert ten aanzien van de werken van Van Gogh zorgvuldig onderzoek te doen.”
This translates to “the VGM has an obligation, given its status as a (near monopolistic) specialised
expert body, to conduct careful research on the works of Van Gogh.
557
Ibid.
558
Babusiaux (2013), p. 67 and Sanders (2016), p. 186.
contract with another party. In other words, a third party can rely on the breach of the
contract if he suffered damage as a result.559
Hence, a buyer who purchased what is later determined to be a forgery, can base
his claim on Art. 1383 Code Civil, arguing that the expert violated his duty of care
against the principal.560 The fact that the third party merely suffered pecuniary
damage is not a factor since, unlike the German and the Swiss approach, Art. 1383
Code Civil does not limit the scope of protected rights.561 As regards contractual
liability, Art. 1147 Code Civil provides that in order to be liable there must have
been a failure to fulfil the contract.562 If the debtor owes a result (obligation de
résultat), the non-fulfilment already occurs when the result is not delivered. On the
other hand, if the contract involves an official duty (obligation de moyens), the
principal must prove that the debtor violated his duty of care.563 The standard
applied is that of a bon père de famille. Given that an expert’s opinion involves
issues that are imponderable, an expert’s duty is that of an obligation de moyens,
meaning that he has to live up to the standard that can be expected of a bon père de
famille.564 Moreover, experts’ liability is limited to the standard and the knowledge
available at the time of the examination (the state of the art). For instance, scientific
findings which only become available after an expertise has been issued cannot be
used to hold the expert liable for failure to consider them.565 In cases of a contractual
relationship, French law differentiates between an expert opinion provided in the
context of a sale (avis) and the decision to include or not include a work in the
catalogue raisonné.566 To employ the example of Werner Spies, who played a
significant role in the Beltracchi scandal, Spies was not only considered to be the
leading expert for Max Ernst’s œuvre, he was also a close friend of the artist, former
director of the Centre Pompidou, and was honoured with several awards, among
which the German Bundesverdienstkreuz and the French Orde de Commandeur de
la Légion d’Honneur.567 As previously stated, he erroneously authenticated several
of the forgeries in the wake of the Beltracchi scandal and based his assessment on a
stylistic examination only, without making use of supplementary means of authen-
559
Cour de Cassation (ass. plén.), Case No. 05-13.255, judgment of 6 October 2006.
560
In this case, it is presumed that the position of the third party was influenced by the contract
between the parties. See Babusiaux (2013), p. 67.
561
Sanders (2016), p. 186.
562
Babusiaux (2013), p. 66.
563
Ibid.
564
For instance, the Cour d’Appel in Paris did not hold an expert liable who had failed to subject the
examined object to X-radiography, since this kind of analysis was not considered standard.
Cf. F. Duret Robert, Droit du marché de l’art, Dalloz, Paris (2004), p. 57
565
Ibid. p. 58.
566
Sanders (2016), p. 186.
567
tication.568 In the case at hand, Spies had attributed the Beltracchi forgery
Tremblement de terre to Max Ernst: in 2002, he declared on the back of a photograph
that the respective painting would be included in the forthcoming catalogue
raisonné. Trusting the correctness of his expertise, S.A. Monte Carlo Art (MCA)
subsequently bought the work from the Paris-based gallery Cazeau-Béraudière.569 In
2009, MCA consigned the painting to Sotheby’s where it was sold for $1.1 mil-
lion.570 Around this time, the Beltracchi scandal had come to light and in the course
of the investigation scientific analysis confirmed that also Tremblement de terre was
a forgery.571 Sotheby’s took the work back, but sued MCA for restitution of the sale
proceeds. In turn, MCA sued Spies and the gallery’s director de la Béraudière for
negligently confirming the painting’s authenticity without further examination.
Since there was no contractual relationship between MCA and Werner Spies, the
court of first instance in Nanterre based liability on Art. 1383 Code Civil and ordered
payment of €652,833, the purchase price, as damages.572 The fact that Spies had
expressly confirmed the authenticity was regarded a sufficient ground for liability.
However, the Versailles Court of Appeal overturned the ruling in December
2015.573 Importantly, the Court stated that:
[. . .] the author of a catalogue raisonné who expresses an opinion outside of a determined
transaction cannot be charged with a responsibility equivalent to that of an expert consulted
in the context of a sale [and it] cannot be required of the author of a catalogue raisonné to
subject each work in a catalogue published under his responsibility to the execution of a
scientific expert assessment, which requires the removal of fragments of the work and
represents a significant cost.574
Hence, the court made a distinction between the opinion given in the context of a sale
and a general opinion expressed by the author of a catalogue raisonné: the latter
cannot be held to the same standard of care as an expert consulted in the context of a
sale. In the case of Tremblement de terre, Spies did not provide his opinion in a
transactional context; he had authenticated the work several years prior to its sale and
according to the court, a less rigorous standard of care must be applied in such
568
Werner Spies confirmed in an interview in Stern 8/2012 that he was deeply convinced of the
paintings’ authenticity and in his opinion, that to date there is no visual evidence that the works are
forgeries: “Ich war zutiefst von der Echtheit überzeugt. Einen Beweis der Unechtheit habe ich bis
heute nicht. Visuell, also nach den Kriterien die ich mit den Augen prüfen kann, gibt es für mich bis
heute keinen Zweifel an der Echtheit der Bilder. Sie sind eben so verblüffend gut gefälscht.” See
further Meinhof (15 June 2011a).
569
Schöne and Robra (2016), p. 82.
570
Schrembs (2017), p. 18.
571
572
Tribunal de grande instance de Nanterre, Case No. 11/03520, judgment of 24 May 2013 and
Williams (July 11, 2013).
573
Cour d’appel de Versailles, Case No. 13/06134, judgment of 3 December 2015 and Fournol
(9 December 2015).
574
Ibid.
cases.575 Moreover, Spies’s assessment was—at the time—plausible and convincing

because the scope of Beltracchi only unfolded later on and shocked the whole art
world.576
The judgment is interpreted as a sign of relief for the authors of a catalogue
raisonné—at least in France—and this favourable approach was confirmed in the
Metzinger case with the court’s conclusion that the freedom of expression as
provided for in Article 10 of the European Convention on Human Rights (ECHR)
enables an author of a catalogue raisonné to freely decide whether or not to include a
specific work in the catalogue.577 In the Metzinger case, Bozena Nikiel, the
recognised expert on Jean Metzinger’s œuvre and holder of the droit moral, had
refused to include a painting in the catalogue raisonné and was sued by a collector-
owner who claimed that he could not sell the work without its inclusion in the
catalogue raisonné and hence, demanded €140,000 in damages.578 Previously, a
court-appointed specialist, who was not particularly specialised in Metzinger’s
work, had appraised the painting and determined it to be genuine. Following this
conclusion, the lower court found against Nikiel and ordered her to include the work
in the catalogue and to pay a fine to the owner.579 However, the Cour de Cassation
overturned this decision on the grounds that it violated Articles 9 and 10 of the
European Convention on Human Rights which guarantee the freedom of thought
and expression and stressed that any expert enjoys the freedom of refusing to include
a given work in the catalogue raisonné.580 With this decision the Cour de Cassation
departed from earlier case law as it is the first time that it considered experts’
freedom of expression to be an absolute right and declined to engage in a balancing
exercise of the differing expert opinions.581
As a result, experts in France may feel more confident in voicing their opinions
again and it is hoped that this ruling will also have a persuasive effect on US courts
that are confronted with disputes concerning authentication. Yet, it remains debat-
able that French courts make a distinction between an expert who is the author of a
catalogue raisonné and an expert who is consulted in the context of a sale, with the
575
Bouchardeau and Roellinger (2015), available at https://ial.uk.com/the-spies-ernst-case-art-
experts-in-france-can-breathe-a-sigh-of-relief/ [last visited March 30 2022].
For instance, it is not mandatory for an expert to subject a work to scientific analysis before
including it in a catalogue raisonné.
576
577
Adam (21 February 2014). The same applies in Germany, where the author of a catalogue
raisonné cannot be compelled to include a work. Doing so would be a violation of his right to
freedom of expression. See Siehr (2013), p. 55.
578
Ibid.
579
Ibid.
580
Cour de Cassation, Case No.12-35.264, judgment of 22 January 2014. See also WAN advocats,
Authenticité d’une œuvre et catalogue raisonné, la position inédite de la Cour de Cassation, 1 June
2015, available at https://wan-avocats.com/authenticite-dune-oeuvre-et-catalogue-raisonne-la-posi
tion-inedite-de-la-cour-de-cassation-2/ [last visited March 30 2022].
581
Schindler and Wilson-Milne (September 15, 2014).
latter being subject to a higher duty of care. As noted earlier, the decision to include
an artwork in the catalogue raisonné is perceived as equivalent to the finding that it
is authentic—and likewise, non-inclusion is equated with inauthenticity. Therefore,
it would seem to be more comprehensible to apply the same standard to experts
acting in both capacities. Conversely, the current situation seems to be an unneces-
sary complication to an already complicated and intricate position of the profession
of art experts.
Jurisprudence Créative: Experts’ Liability in the Context of Auction Sales
In contrast to the aforementioned liability regime, art experts who give their opinion
in the context of auction sales are subjected to a form of warranty liability, a much
higher level of liability. Therefore, experts can be held liable even though they are
not at fault and did not violate their duty of care. This regime of strict liability was
developed by the Cour de Cassation in two fundamental judgments. In the Herbin
decision (1995), the Cour de Cassation found an expert liable who had erroneously
attributed a painting to Auguste Herbin. The expert incurred liability even though the
court-appointed specialist did not find fault in his assessment, as the inauthenticity
could not have been detected at the time of the examination.582 According to the
court, the expert had nevertheless violated Art. 1147 Code Civil because he had
asserted the authenticity in an absolute manner, without indicating any reservation or
qualification. The Dufy decision (2007) concerned an expert’s tortious liability
vis-à-vis the third-party buyer who had purchased the painting which the expert
had attributed to Jean Dufy.583 Again, at the time of examination, there was no
reason to doubt the authenticity. It was only 10 years later that new scientific
methods had become available which enabled another expert to conclude that the
painting was in fact a forgery. Based on an obligation de moyen or négligence, the
expert would not have incurred liability because at the time of examination, it would
not have been possible to objectively detect the forgery.
However, the Cour de Cassation confirmed that it was irrelevant that the expert
was objectively not able to detect the forgery at the time of the examination.584
Again, the court found it sufficient that the expert asserted the authenticity in an
absolute and unqualified manner, without indicating any reservations.585 Even
though this interpretation of expert liability is contrary to the legal regime, it has
been confirmed in subsequent judgments.586 In fact, courts have developed a
warranty liability, a strict liability which holds experts liable even though they are
582
Cour de Cassation, Case No. 93-11.418, judgment of 7 November 1995.
583
Cour de Cassation, Case No. 05-12.238, judgment of 3 April 2007.
584
Ibid. and Babusiaux (2013), p. 68.
585
Cour de Cassation, Case No. 05-12.238, judgment of 3 April 2007. According to the court, the
expert’s assertion that a work is genuine is a sufficient ground for liability.
586
Ibid.
not at fault. There are two reasons why case law has chosen this form of extended
liability. First, an expert is considered to have assisted the auctioneer in the sale of
the object and hence, he is liable based on the function he assumes.587 The second
argument is based on a decree, a document from 1981 which aims to counteract
fraud in art market transactions.588 In fact, this document, which primarily concerns
an auctioneer’s duties towards his clients, has become a ground for liability for art
experts as well.589 This has to do with the fact that experts are considered to assist
auctioneers:590 since an auctioneer is bound by the decree vis-à-vis his clients, he has
to ensure that the expert’s expertise also lives up to the decree’s specifications.
Hence, if an expert authenticates a work, this statement must have the same status in
the auctioneer-expert relationship as in the auctioneer-client relationship.591 As a
result, experts’ liability has become rather unlimited regarding the purchaser of an
artwork that is later determined to be a forgery. This becomes particularly clear when
the type of damages and the statute of limitations are concerned. As regards the type
of damages for which the expert is liable, this encompasses both material and
immaterial damage (réparation intégrale).592 Consequently, the purchaser of a
forgery can claim damages not only for his monetary loss, i.e. the purchase price
and the loss of his investment, but also for the disappointment he felt when the work
was determined to be a forgery (préjudice de l’amateur abusé and sentiment d’avoir
été trompé).593 The specific amounts will be estimated by the court and the expert
can be held liable for damages that represent multiples of his fees. The court’s
extension of expert liability is also visible in the applicable statute of limitations.
According to the general statute of limitations, a claim can be brought until
5 years after a purchase.594 However, the Cour de Cassation refuses to apply this
regime: instead, it applies the regular statute of limitations of 5 years but stipulates
that it only applies from the day that the entitled person detected or should have
detected a work’s inauthenticity.595 This de facto extends the statute of limitations
substantially, with the consequence that an art expert can incur liability for a much
longer and indeterminate period of time. Considering the foregoing, Babusiaux
587
Ibid. p. 69.
588
Décret no 81-255 du 3 mars 1981, sur la répression des fraudes en matière de transactions
d’œuvres d’art et d’objets de collection. Version consolidée au 30 septembre 2001. See also
Demarsin, Proefschrift (2008a), p. 457, and Demarsin, Handel in kunstvoorwerpen, p. 585.
589
Babusiaux (2013), p. 69.
590
Ibid. p. 65. Until 2000, the French auction market was regulated by the state’s monopoly. Until
then, both auctioneers and experts had to be licensed by the state. However, with the market’s
liberalisation, the licensing system was abandoned and ever since, the majority of experts are self-
employed and work for auction houses on a contractual basis. See also Mauger-Vielpeau (2008)
Lazzaro and Moureau (2013) and Bandle (2016), p. 83.
591
Ibid.
592
Ibid. p. 70.
593
Ibid.
594
Ibid. p. 71.
595
Ibid.
concludes that purchasers’ protection comes at the cost of experts. Since transactions
are concluded on the basis that an expert’s assessment is correct, he will be liable if a
work is later found to be a forgery—no matter whether he was at fault with the
misattribution. The basis for this is a creative jurisprudence ( jurisprudence créative)
which aims at combatting fraud in the art market—even if this means that general
legal provisions on liability are ignored. The obvious contradiction with legal
grounds is a topic of discussion in French legal doctrine and clearly, the recent
scenario is considered to contradict the legislators’ will, which was to liberalise the
structure of the art market and especially the position of auction houses and
auctioneers.596
3.5.2.5 The United Kingdom
Similar to the approach in the Netherlands, the English system also acknowledges
that authentication and attribution are matters of opinion and not of fact. Hence, an
incorrect determination does not automatically give rise to legal redress.597 In the
case of a contractual relationship between the expert and the plaintiff, section 13 of
the Supply of Goods and Services Act 1982 stipulates that a contractor has to act
with reasonable care and by way of analogy, this also applies to art experts.598 It is in
the context of experts’ liability towards third parties that the particularities of English
law become apparent: since English law does not recognise contracts with protective
effects towards third parties, tort law applies and in particular, the tort of negli-
gence.599 Comparable to German law, the first condition is that a legally protected
interest was violated. Pure economic loss requires the existence of a duty of care,
which in turn requires proximity, as famously established by Lord Atkin in
Donoghue v Stevenson.600
Hence, German and English law protect property only under certain circum-
stances; the protection of property outside of a contractual relationship needs a
justification. Therefore, proximity is a prerequisite for expert liability in the UK: a
special relationship between the parties enables tort law to extend to property
596
Ibid. In fact, the French legislature had abolished the state monopoly on the auctioneer profes-
sion in order to open up the market.
597
Christopherson (2014), p. 57.
598
Sanders (2016), p. 187.
599
Ibid.
600
Donoghue v Stevenson [932] A.C. 562, [1932] UKHL 100, 1932 S.C. (H.L) 31, 1932,
S.L.T. 317, [1932] W.N. 139. Lord Atkin established the following: “the rule that you are to love
your neighbour becomes in law you must not injure your neighbour, and the lawyer’s question
‘Who is my neighbour?’ receives a restricted reply. You must take reasonable care to avoid acts or
omissions which you can reasonably foresee would be likely to injure your neighbour. Who then in
law is my neighbour? The answer seems to be persons who are so closely and directly affected by
my act that I ought reasonably to have them in contemplation as being so affected when I am
directing my mind to the acts or omissions which are called in question.”
damage and to override contract law’s limitations that only recognise contracts with
consideration.601 A court will therefore evaluate whether the research that underlies
a decision was negligent, considering the expertise of the experts and the resources
available. In the context of sleepers, Luxmore-May v Messenger May Baverstock is
the leading attribution case, with the judge expressly formulating that “[as with many
other ‘sleepers’], perhaps the mystery will never be conclusively solved”.602
The Scope of the Standard of Care
In Luxmoore-May v Messenger May Baverstock, the defendant auctioneer had

valued the claimant’s paintings at £30, based on visual inspection and X-rays.
However, the paintings were subsequently attributed to the celebrated painter of
animals George Stubbs and sold for £88,000. Consequently, the claimant sued the
auctioneer for negligence. In order to prove negligence, it must be established that
the defendant breached his duty of care to the claimant, i.e. that the defendant failed
to act as a reasonable professional. In determining the standard of care, the court
applied the same distinction that is made between a doctor who is a general
practitioner and one who is a specialist. It concluded that the standard of care
expected from a provincial auction house is only that of a general practitioner.603
The court stated that widely differing views on the paintings were reasonable and
that it could not be said that a competent valuer would have been able to spot their
Stubbs potential.604 In particular, Slade LJ stressed that the valuation and attribution
of pictures:
[. . .] pre-eminently involve[s] an exercise of opinion and judgment [. . .] since it is not an
exact science, the judgment in the very nature of things may be fallible and may turn out to
be wrong. Accordingly, provided that the valuer has done his job honestly and with due
diligence, I think that the court should be cautious before convicting him of professional
negligence.605
Hence, no negligence was established and the expert and was not found liable. A
similar case was brought against Sotheby’s by Mr. Thwaytes who sued the auction
house for breach of contract and negligence for its decision to attribute his painting
601
Ibid.
602
Luxmoore-May v. Messenger May Baverstock ([1990] 1 All ER 1067).
603
Ibid. at 1020, citing the judgment of Lord President Clyde in Hunter v Hanley 1955 S.L.T. 213,
217: “In the realm of diagnosis and treatment there is ample scope for genuine difference of opinion
and one man is clearly not negligent merely because his conclusion differs from that of other
professional men. . . The true test for establishing negligence in diagnosis or treatment on the part of
a doctor is whether he has been proved to be guilty of such failure as no doctor of ordinary skill
would be guilty of it if acting with ordinary care [. . .]”.
604
Ibid. at 1023.
605
Ibid.
to a follower of Caravaggio and not to the artist himself.606 Sotheby’s had carried out
research into the painting, including visual examination, examination under UV light
and X-radiography and concluded that the painting was a seventeenth century copy
by a follower of Caravaggio. The judgment is a significant contribution to the
growing body of case law on the complex and often controversial topic of
attribution.607
The parties agreed that the test to be applied was the same for both causes of
action and since no issues of validity and interpretation of the contract were alleged,
the court focused on the negligence claim. In particular, the case concerned the
question whether the standard of care owed to Mr. Thwaytes was that of a “normal”
or a “special” enquiry.608 Referring to Luxmoore-May, the court confirmed that
Sotheby’s as a leading auction house must be held to a higher standard than a
provincial auction house.609 In determining in what ways that higher standard of
skill and care must be manifested, the court developed a four-part standard of
care test:
(i) Consignors can expect that their property is assessed by highly qualified people
with access to the opinions and services of art historians at the highest level of
scholarship.610
606
Lancelot Thwaytes v Sotheby’s [2015] EWHC 36 (Ch). The painting The Cardplayers was sold
as (After) Caravaggio for £42,000 (above its estimate of £20,000–30,000) and was later attributed
by Sir Denis Mahon to Caravaggio himself. With this new attribution, its value was estimated at £50
million.
607
Paintin (2 July 2015), pp. 101f. The case is only the third in modern times which involved a
consignor suing an auction house over its attribution decision. More cases were brought by buyers
who sued auction houses because it was revealed that the work in question had been mis-attributed
or was a forgery. While the standard of care issue remains the same, some of the cases involved
contractual claims only.
608
Lancelot Thwaytes v Sotheby’s, at. 68.
Auction houses also make a distinction between a Standard and a Specialist Examination. For
instance, Bonhams provides in their Conditions of Business that if a lot is consigned at any
saleroom, except New Bond Street, Bonhams will carry out a Standard Examination: a “visual
examination of the lot by a non-specialist member of our staff. The degree of skill and care
exercised will be proportionate to an examination of this limited nature.” (See Section 1.2.1
(1/01/2014). Only at New Bond Street, its headquarters, will a specialist of the lot carry out a
visual examination, “the degree of skill and care involved will increase proportionately to the level
of skill and care that would reasonably be expected from a specialist on the lot”. However, this
examination will not involve investigation or research into the lot, nor tests on it. Research or tests
on the lot can be arranged for, if the client is prepared to the pay the additional expenses or for
Bonhams’ own benefit, without further costs, but will not form part of any Standard or Specialist
Examination.
609
Ibid. at 73. On the other hand, a provincial auction house cannot be expected to have access to
the same kind of leading expert opinion.
610
Ibid. at 76.
(ii) The auction house must examine the respective work properly and
thoroughly.611
(iii) It will be much more difficult for a leading auction house to rely on the poor
condition of a work as the reason for failing to recognise its true potential.612
(iv) An art expert must know his or her own limitations and when an outside expert
should be consulted.613
Moreover, the court addressed the “difficulty of determining the prevailing standard
of conduct when there are only two generally accepted auction houses of this stature
at least as regards Old Masters, namely Sotheby’s and Christie’s”.614 According to
the court, “merely because Christie’s and Sotheby’s can be shown to act in a
particular way does not automatically mean that that way is not negligent.”615
Consequently, an auction house can potentially be found negligent even if it follows
the accepted practice of its profession—this consideration is an important one when
it comes to protecting the interests of clients. In conclusion, Sotheby’s was entitled to
rely on its “expertise and connoisseurship.” There was no obligation to carry out
further analysis and importantly, even if it had carried out infra-red analysis for
instance, the court was of the opinion that they would not have found anything that
should have caused them to question their assessment of the painting.616 Thwaytes v
Sotheby’s is highly specific in the context of Old Masters paintings, in particular of
those attributed to Caravaggio or his studio, and the court primarily addressed the
question whether the painting contained any features or red flags that should have
been spotted by Sotheby’s by way of visual or technical examination. While the
court concluded that Sotheby’s was allowed to rely on the skill and connoisseurship
611
Ibid. at 77. In Luxmoore-May, it appeared from the evidence that the valuer gave the paintings a
rather cursory examination. This in itself was not considered negligent, but is far from what would
be expected of Sotheby’s, for instance.
612
Ibid.
613
Ibid. at 78. While this applies to provincial and international auction houses alike, the bar for
where the threshold is crossed is set at a much higher level in Sotheby’s case.
In Avrora Fine Arts Investment Ltd. v. Christie’s Manson and Woods Ltd. [2012] EWHC 2198
(Ch), Christie’s was sued for selling what turned out to be a forgery and even though the judge
considered the negligence claim merely marginally (the contractual claim was successful), he held
that Christie’s would not have been negligent by virtue of the fact that it did not consult an external
expert because it had good reasons for reaching its decision on attribution. Further, in William Duke
Coleridge 5th Baron Coleridge of Ottery St Mary v. Sotheby’s [2012] EWHC 370 (Ch.), the court
concluded that it would have been commercially unrealistic to have expected the valuer from
Sotheby’s to consult specialist dealers for their opinions on the object’s value, as this would have
undermined their positions if they had wanted to bid for the piece.
614
Ibid. at 79.
615
Ibid. This reasoning is once again very similar to the court’s finding in Lempertz v. Trasteco that
business usage cannot be invoked in order to justify behaviour that would otherwise be considered
negligent.
616
Ibid. at 166.
of its specialists, it also stressed that auction house specialists must know their
limitations and when to bring in and consult with outside experts.
Therefore, the decision does not preclude cases in which a court could find that
there were “red flags” or other circumstances that should have put the auction house
or expert under “special enquiry” obligations. The court also considered the question
of what would have happened if Sotheby’s had concluded that they should not assess
the painting themselves, but should call for expert assistance.617 It found that
Sotheby’s would have received a number of both positive and negative opinions
by Caravaggio scholars, but that the views of those scholars who expressed a
negative view of the painting would have carried much more weight and hence,
that Sotheby’s would have maintained their own very strong doubts about the status
of the painting.618
Applying the Standard of Care to Art Experts’ Responsibilities
The case law discussed so far concerns the standard of care that is expected from
auction houses and their specialists. Since these specialists are by their very nature
also experts in their field, the four-part test developed in Thwaytes v Sotheby’s could
in part also apply to individual experts to assess whether they acted negligently in the
course of their assessment. As regards the second part of the test, it should be clear
that experts must give each work a proper examination, devoting enough time and
research to arrive at a conclusive view. This means that merely authenticating a work
based on a photograph or briefly looking at it are likely to amount to negligence.619
Moreover, the court stressed in part four of the test that each expert must know his
or her limitations. In the context of auction house specialists, this refers to their duty
to consult external experts if they realise that internal expertise is insufficient. The
bar for external consultation is set rather high and an international auction house
might be expected to consult an external expert only when there are doubts about a
work’s attribution, internal differences or gaps in internal expertise.620 For individ-
ual experts, “knowing their limits” and consulting “external expertise” could mean
that they are under an obligation to employ supplementary means of authentication
and attribution in order to give credibility to their opinion. Yet, it frequently
happened in practice that experts did not refer to technical examinations such as
X-radiography, infrared imaging, or pigment analysis—not even in cases where this
measure would have been justified by the high value of the artworks under
617
Ibid. at 167f. The court acknowledged that “the ability to navigate the difficult water of seeking
scholarly views on attribution is an important skill for an auction house senior specialist to have”.
618
Ibid. at 180 and 187.
619
At times, experts might not examine a work properly because they trust their gut feeling that it is
or is not genuine.
620
Paintin (July 2015), p. 105.
examination and in particular, by the doubts that experts should have had regarding
their genuineness.621
3.5.2.6 United States
In the United States, actions against art experts for malpractice usually involve
claims for breach of contract, negligence, defamation and disparagement.622 An
expert’s failure to exercise reasonable care and skill can constitute the tort of
negligence and a breach of an express or implied term of his contract with the
client.623 Historically, an action for professional malpractice required privity of
contract, that is a contractual relationship between the plaintiff and defendant.624
However, there is the tendency to recognise a duty of care beyond the confines of
privity and thus, to open up the possibility of liability to third parties. In determining
whether liability without privity would be appropriate, the courts use different
approaches: among the factors considered are third-party beneficiary analyses,
balancing tests considering the extent to which the transaction was intended to affect
the plaintiff, foreseeability of the harm, and whether recognition of liability would
impose an undue burden on the profession concerned.625
Liability for Negligence
To incur liability for negligence, the following four elements must be fulfilled. There
must be: (i) a duty to possess and exercise ordinary skill and knowledge; (ii) a breach
of that duty (negligence); (iii) a causal connection between the negligent conduct and
the resulting injury; and (iv) loss or damage.626 Generally, an art expert, like other
professionals, is required to possess a certain minimal knowledge and skill. When
performing services for a client, an expert “has the duty to have that degree of
learning and skill ordinarily possessed by reputable members of the profession,
621
From case law, it appears that an auction house must have sufficient doubts about an attribution
before more expensive analysis needs to be carried out. Courts will also take into account that
scientific analysis can merely prove the negative and not a positive attribution. For instance, such
doubts would be reasonable if experts are confronted with a potential (re-)discovery of long-lost
collections.
622
Levy (1991), p. 618.
623
Ibid. As regards the amount of damages under tort liability, a plaintiff is entitled to compensation
for injuries actually sustained, hence the amount necessary to restore his former position. Under
contractual liability, the plaintiff is also entitled to “the benefit of the bargain”, the benefit he would
have received if the contract had been faithfully performed.
624
Ibid. p. 607 and Clark and Ansay (2002), p. 191
625
Baez III (2010), p. 35.
626
Brüggemeier (2006), pp. 95ff.
practicing in the same or a similar locality and under similar circumstances”.627

Failure to possess these qualifications constitutes negligence. According to Levy,
this rule is easily stated, but not applied.628 Because unlike physicians or attorneys,
art experts are not subject to any licensing system or governmental control and are
not even required to meet any minimal standards. What is obvious, though, is that an
expert cannot be considered negligent for failing to do something that would exceed
the scope of his employment.629
Moreover, and in light of the fact that expert opinions are always subject to new
revelations that might change prior assessments, an art expert is not necessarily
negligent if his conclusion is later challenged or proven wrong.630 Given the lack of
any accepted legal or professional definition of art expert competence, courts have
utilised a variety of factors in order to assess negligence: the expert’s qualifications
and training, his experience (although this cannot be objectively gauged), whether he
performed a thorough examination, referred to all available source materials, con-
ferred with specialists, and performed appropriate scientific tests.631 This means that
an expert is not only expected to possess the required qualifications, he must also
utilise this competence in a reasonable manner: that is, to “use the care and skill
ordinarily used in like cases by reputable members of his profession and to use
reasonable diligence and his or her best judgement in the exercise of his professional
skill”.632 The profession of art expert makes it particularly clear that the reference
point usually used in tort law—the reasonable man of ordinary prudence, the bonus
paterfamilias, der ordentliche Hausvater or l’homme prudent et avisé—can serve
only as a starting point that needs further interpretation by the courts.633 Courts
generally refer to the “state of the art”, that is the due diligence or best practice
standards of the respective profession. However, this proves to be difficult for a
profession whose standards and working methods are far from being unambiguous.
Therefore, US courts will also consider an issue that is very reminiscent of the fourth
part developed by the English court in Sotheby’s v Thwaytes, namely that an expert
may be guilty of malpractice if he fails to consult with another specialist in cases
where an assignment is outside the limits of his skill or knowledge: “like any other
professional, he must recommend the assistance of a specialist if under the circum-
stances a reasonably careful and skilful art expert would do so”.634
627
Cal. Jury Inst. Civ., BAJI No. 6.37 (7th ed. 1986).
628
Levy (1991), p. 600.
629
Ibid. p. 599.
630
Ibid. p. 632. According to Levy, art experts are “constantly re-evaluating the world’s inventory
of art” and hence, “opinions about authenticity or value that are indisputably correct today may be
deemed clearly erroneous tomorrow”.
631
Kaufman (2000), pp. 870ff and Lerner and Bresler (2013), p. 517.
632
Levy (1991), p. 605 and Brüggemeier (2006), p. 52.
633
Brüggemeier (2006), p. 58.
634
Levy (1991), p. 603. This is also stressed in several organisations’ codes of conduct: for instance,
the College Art Association stresses that scholars should render opinions only on works which are
within their competence (cf. A Code of Ethics for Art Historians and Guidelines for the Professional
While there is no limit to the variety of acts and omissions that can give rise to an
allegation of malpractice, a few situations recur with sufficient frequency to present a
constant risk.635 First and foremost, experts who render opinions on the basis of
photographs only or on visual examinations without the benefit of scientific tests,
always run the risk of being accused of falling below the standard of care if their
opinion is later challenged and proven wrong.636 In actual practice, it is not uncom-
mon for experts to merely require photographs for their assessment and it depends on
the specific case whether this will be regarded as negligent. As regards scientific
testing and its ever-increasing acceptance as a tool in matters of authentication and
attribution, experts must not only keep track of the availabilities and capabilities of
relevant methods, but also, in the exercise of reasonable care, be able to recognise
when there is a need for additional data and when science can provide that data at a
reasonable cost.637 Another aspect is that experts will be vulnerable to malpractice
lawsuits if they fail to set forth the reasoning and material factors behind their
opinions and when they do not express this in “clear, concise and unequivocal
language”.638 Without stating the basis for its considerations, an opinion will be
merely a guess. To avoid liability, experts can include an exculpatory release or
disclaimers in their contracts. Such a stipulation will be considered void if it seeks to
exonerate a party from liability for wilful or grossly negligent acts.639 However, to
the extent that it excludes liability for simple negligence, it will be enforceable if it is
clearly and explicitly drafted and does not affect the public interest.640 Since the
employment and the scope that is expected from the expert’s services are usually
spelled out in a written or oral agreement, the expert is able to include specific
limitations on his assignment. For instance, he can specify that he will perform a
visual inspection only without the assistance of scientific tests. Therefore, he will not
be liable for failure to do something that is beyond the scope of these specifications.
According to Levy, the fact that an opinion conformed to the prevailing view at
the time of examination is another defence which art experts can rely on (the anti-
Practice of Art History (2014) §11(e)), while the Appraisers Association of America also provides
that an appraiser who discovers that he is not qualified to carry out the full appraisal himself, must
recommend an appraiser who would be qualified to do so.
However, it should be kept in mind that consulting another specialist might help to assure
compliance with the standard of care, but does not necessarily ensure an accurate result.
635
Ibid. p. 609.
636
Ibid.
637
Ibid. p. 613. Since the time of Hahn v. Duveen, experts still seem to be reluctant to use scientific
evidence as complementary means to their connoisseurship. Werner Spies in the Beltracchi case
was yet another example. See Meinhof (June 15, 2011).
638
Ibid. p. 614. Cf. Gerechtshof Amsterdam 22-09-2015, ECLI:NL:GHAMS:2015:3920
(Roubrocks v. Van Gogh Museum). Here, the museum’s detailed statement was one of the reasons
why the court found that the museum had not acted negligently when forming its opinion on
attribution.
639
640
Baez III (2010), p. 129.
hindsight defence): “the art expert who possesses and utilises ordinary care and skill
in formulating his opinion in accordance with then-current knowledge will not be
guilty of fraud if later on, in hindsight, he is deemed to be wrong”.641 This means that
experts cannot be held liable for not anticipating future changes in opinion, based on
advances in scholarship or science. However, the opinion must have been rendered
according to the applicable standard of care at the time, considering the factors
described above. Failure to do so will most likely give rise to malpractice claims. Art
experts would be well advised to simply abstain from acts and omissions that might
prima facie indicate that their examination fell below the applicable standard of care.
These is, for instance, the practice of rendering opinions based on photographs only
or the refusal to supplement visual examination with data from scientific findings.
Defamation and Disparagement
Increasingly, art experts have also been sued for the torts of defamation and
disparagement by disappointed clients and non-clients who were affected by their
opinions.642 As mentioned before, Hahn v Duveen643 is still the classical disparage-
ment case and ever since, the two torts were perceived as experts’ primary exposure
to disputes, resulting in the fact that many experts now refuse to publicly express
their opinions.644 An expert who publicly proclaims that a certain artwork is
inauthentic or negatively comments on its value runs the risk of being sued for
defamation or disparagement.645 While defamation refers to the invasion of an
individual’s personal reputation, disparagement concerns an invasion of an individ-
ual’s interest in property.646
Defamation is defined as a false and unprivileged communication which is
categorised as either libel or slander, depending on whether it was expressed in a
permanent or rather transitory form.647 Disparagement relates to an intentional
falsehood that degrades the quality or authenticity of the plaintiff’s property and
results in pecuniary damage. While it is possible for the two torts to overlap in certain
situations (the plaintiff can decide to proceed under either or both of the theories),
disparagement is more difficult to prove as the plaintiff bears the burden to demon-
strate the falsity of the disparaging comment and the existence of special damages in
the form of pecuniary loss.648 Consequently, the injured client or third party must
641
Levy (1991), pp. 632f.
642
Lerner and Bresler (2013).
643
Hahn v. Duveen 133 Misc. 871, 872, 234 N.Y.S. 185 (Sup. Ct. N.Y. Co. 1929). See Brewer
(2009) and Secrest (2004).
644
See Brewer (2009) and Secrest (2004).
645
Kaufman Akst (1977), pp. 906f.
646
Merryman and Elsen (2002), p. 971.
647
648
Ibid. p. 21.
prove that the expert maliciously communicated a false statement which caused
special damages in form of lost market value. With regard to disparagement in the
context of authentication, the following conditions exemplify how difficult it is to
apply legal standards to art cases.649 First of all, it must be proven that the statement
is false.650 As the foregoing analysis has shown, authenticity is seldom conclusively
provable; even if scientific tests reveal the existence of anachronistic pigments, art
historians may nevertheless come to a different conclusion651 Second, the expert’s
statement must be published with actual malice, with the standard being that the
defendant had knowledge of the alleged false statement or reckless disregard for its
falsity.652 Again, this is difficult to prove as reckless disregard of falsity presupposes
proof of falsity. Third, as regards the requirement of publication, authentication
boards or artists’ foundations are more vulnerable to disparagement claims since
they usually publish their research in some form.653
Auction houses and private appraisers have fewer opportunities for publication
since their findings are normally not communicated to third parties and hence, cannot
cause loss in marketability.654 While the scope of application of disparagement is
rather limited—the plaintiff must after all prove falsity of the statement and actual
malice on part of the expert—the mere threat of a lawsuit and the possibility of
intimidating litigation costs have a “freezing effect on scholarship” in the United
649
Kirby v. Wildenstein, Christie’s, Manson & Woods (784 F. Supp. 1112 (S.D.N.Y. 1992)
exemplifies the difficulty of proving that an expert’s publication was indeed the cause of a
plaintiff’s loss: when Christie’s was commissioned to auction the plaintiff’s painting by Jean
Beraud, the Wildenstein Institute, author of the catalogue raisonné, was asked to authenticate the
work. Wildenstein concluded that the work was either a copy or an original badly damaged by
restoration. However, Christie’s managed to obtain documents that directly traced the work back to
the artist. Wildenstein agreed to include the painting with a comment on the abusive restoration.
After the painting failed to sell, the owner sued the Wildenstein Institute for product disparagement.
While the court acknowledged that the act of sharing the opinion with Christies’ amounted to
publishing, no causal link could be established between the publication and the damage since none
of the third parties were potential purchasers. As regards the condition of damage, this must be
“pecuniary or economic losses that are the natural and immediate consequence of the defendant’s
wrongful disparagement”. In this context, this would be the loss of marketability, for instance
potential purchasers who lost interest due to the disparagement.
650
Kaufman Akst (1977), p. 908.
651
Cf. the discussions about the Beltracchi forgeries Rotes Bild mit Pferden and Seine mit
Frachtkrähnen.
652
Charles Atlas, Ltd. v. Time-Life Books, Inc., 570 F. Supp 150, 154 (S.D.N.Y. 1983), Orenstein
(2005), p. 911, and Kaufman Akst (1977), p. 910.
653
654
Just on the contrary, if an auction house considers an artwork to be inauthentic, it will not offer it
for sale and hence, it will not be included in the published catalogue. On the other hand, the decision
not to include an artwork in a catalogue raisonné or in an exhibition would be considered
publication. See for instance Gumowitz v. Wildenstein & Co. (No. 10229-92 (N.Y. Sup.
Ct. 1992). As confirmed in Kirby v Wildenstein,784 F. Supp. 1112, 1113 [SD NY 1992],
non-inclusion in a catalogue raisonné suggests that the work is not genuine.
States.655 In other words, the cost of litigation is so great that experts cannot afford to
wait for the jury to confirm that they acted without actual malice.656 Ultimately, the
question of liability depends on balancing the parties’ competing interests: freedom
of speech on the one hand and the plaintiff’s reputation and protection of his
property rights on the other hand.657 However, owners seeking the authentication
of their artworks are becoming increasingly imaginative: plaintiffs have sued authen-
tication boards on the basis of anti-trust laws, for conspiring to exclude authentic
pieces from the market in order to increase the value of their own collection.658
Therefore, the next section assesses how experts can limit or avoid the risk of both
liability and litigation. The previously identified problem of a “freezing of scholar-
ship” is especially prevalent in the United States and since the majority of lawsuits
have been brought in New York State, the defences discussed will focus on this
jurisdiction in particular.
3.5.3 Safeguarding Against the Risk of Litigation: Possible

Defences and Remedies
Litigation involving disappointed owners and art experts over diverging opinions is
not a recent phenomenon. Already in 1929, in the since notorious court case, Joseph
Duveen was sued for defamation as he characterised the painting La Belle
Ferronière, in the possession of Mrs. Hahn, as a copy of the original painting in
the Louvre.659 In 1929, Duveen’s defence amounted to that of a “fair comment
privilege”: relying on his right of free speech, Duveen claimed that he was allowed to
make statements in good faith.660 In this respect, “a fair comment” or criticism on a
matter of public interest is not actionable as long as the comment is not motivated by
actual malice and can be invoked if: (i) the publication is an opinion; (ii) it relates not
to an individual, but to his or her acts; (iii) it is fair, i.e. the reader sees the factual
basis for the comment and can draw an own conclusion; and (iv) the publication
655
Adam and Pryor (2011). See also Amineddoleh (2015), p. 426.
656
By taking great care in the authentication and attribution process and by documenting the
reasons on which a decision is based, the expert can favourably control the appearance and the
evidence for malice and hence, the requirement of malice is the expert’s key to an early dismissal of
the lawsuit.
657
Levy (1991), p. 639.
658
In Kramer v. Pollock-Krasner Foundation, 890 F. Supp. 250, 253 (S.D.N.Y. 1995), the plaintiff
accused the Pollock-Krasner Foundation of conspiracy to increase the value of some paintings by
excluding others from the artist’s catalogue raisonné. The same claims were brought forward in
lawsuits against the Andy Warhol and Keith Haring authentication boards.
659
Hahn v. Duveen 133 Misc. 871, 872, 234 N.Y.S. 185 (Sup. Ct. N.Y. Co. 1929). The case was
eventually settled with Duveen paying the substantial sum of $60,000 in damages.
660
DuBoff and King (1984), p. 63.
relates to a matter of public interest.661 This means that an art expert, provided that
he fulfils the aforementioned conditions, can protect himself against an action for
defamation even if his opinion causes the plaintiff to suffer monetary loss. However,
an expert must still act according to the duty of care that is to be expected from his
profession. Thus, if he fails to live up to this standard and does not conduct adequate
research when determining a work’s authenticity, he may be liable on the basis of
professional negligence.662 In Travis v. Sotheby Parke Bernet, the court acknowl-
edged the aforementioned difficulty which an expert faces when authenticating an
artwork:
[. . .] what we are dealing with here has no objective standards. Each of the experts bases his
opinion on his personal aesthetic considerations and experience. [. . .] In short, we have
experts making what they consider to be educated guesses about what transpired over two
hundred years ago.663
The distinction between opinion and fact is crucial regarding the question whether an
expert can invoke the “fair comment” defence or can claim protection under the First
Amendment. According to the U.S. Supreme Court, it is, however, not an automatic
defence in a defamation case to claim that the defendant was merely expressing an
opinion.664 At the one extreme, experts’ views are clearly an opinion if they relate to
an antique artwork, with no information on provenance or background, while the
other extreme concerns an artwork by a contemporary artist. The difference is that in
the latter case, the expert’s pronouncement of authenticity is a statement of fact as it
is objectively verifiable as long since the artist is around to confirm it.665
In addition, authentication is a unique scenario because experts are restrained
from charging a fee that would reflect their litigation risk if their opinion is disputed
or turns out to be incorrect.666 If experts may not ethically charge a fee that is related
to the value of the work in question, why would they, for a modest fee of $500 or
$2500, risk a million-dollar lawsuit from a disappointed owner? Furthermore,
Spencer argues that “certain legal theories seem to have a persistent appeal to
owners, despite their general lack of success in litigation against experts”.667
This means that disgruntled owners are likely to sue an expert and it is exactly this
fear of being sued, with the ensuing litigation costs, that causes experts to
661
Ibid.
662
This was illustrated in Travis v. Sotheby Parke Bernet, Index No. 4290/79, Slip Op (N.Y. Sup.
Ct. Nov. 11, 1982).
663
Ibid. See also Jendwine v. Slade 170 Eng. Rep. 459 (P.C. 1797), where the court remarked that
the fact that experts disagreed as to the authenticity of a painting was a matter of opinion and not
of fact: “the pictures were the work of artists some centuries back, and there being no way of tracing
the picture itself, it could only be a matter of opinion whether the picture in question was the work of
the artist whose name it bore or not.”
664
Milkovich v. Lorain Journal Co.,110 S. Ct. 2695 (1990).
665
Levy (1991), p. 647.
666
Spencer and Wallace (2015) in Courtney (2015), p. 28.
667
Ibid. p. 31.
increasingly withhold their opinions. In addition to Spencer’s argument, it should

also be kept in mind that even if courts deliver a judgment on authenticity, the art
market is certainly not compelled to accept the court’s determination. After all, the
standard in civil litigation is “more likely than not” and the finding that there is a
51 percent likelihood that a work is genuine is far from sufficient to make it
saleable.668 However, art experts have certain options open to them to defend
themselves, such as concluding a no-sue agreement with the party demanding an
opinion, covering the risk by taking out professional indemnity insurance and in US
cases, invoking the protection given to opinions under the First Amendment to the
U.S. Constitution. In addition, there have been recent statutory reform plans in the
State of New York to offer more protection to art experts and authenticators. As will
be seen below, the majority of cases were brought in New York, where most of
artists’ foundations and authentication boards were established. Therefore, the pro-
posals for statutory reform were specifically tailored to the law of the State of
New York.
3.5.3.1 The First Amendment Defence
The First Amendment to the U.S. Constitution is one possible defence for art experts.
There is a well-established body of case law relating to expressions of opinion that
could also be applied in a context involving art.669 In 1974, the U.S. Supreme Court
established that expressions of opinion, which cannot be proven true or false, are
constitutionally protected under the First Amendment and may not be the subject of
private damage actions.670 According to Ronald D. Spencer, it is the expert’s idea,
based on his connoisseurship, which is at risk from a (perceived threat) of prolifer-
ation of legal claims over the authentication of visual art.671 In the context of art
authentication and attribution, ideas are equated with and usually stated as
“opinions”.672
As a general principle, Spencer stresses that an idea can never result in liability for
the person expressing it because ideas are inherently personal and subjective and
should be seen as beneficial to society. In Ollman v. Evans and Novak, a U.S. Federal
Court of Appeals determined that there is a difference between pure opinion, which
is regarded as incapable of being adjudged true or false in any objective sense of
those terms, and hybrid opinion, which is far more common, reflects the author’s
668
Ibid. This topic will be discussed further in section six of this chapter.
669
Spencer and Wallace (2015) in Courtney (2015) p. 37.
670
This was established in Gertz v. Robert Weich, Inc., 148 U.S. 323 (1974) and later clarified in
Mikovich v. Lorain Journal, 497 U.S. 1 (1990).
671
Spencer (2013), p. 2 and Spencer (2004b), p. 184. See further Ragai (2018), pp. 95ff.
672
Ibid. Notwithstanding the circumstances in which experts determine the authenticity of artworks,
i.e. when publishing a catalogue raisonné, curating an exhibition or in the context of a sale, their
conclusion is usually worded as an opinion. Cf. the legal situation in Germany, where experts’
assessments are also regarded as Werturteile.
deductions, but is “laden with factual content”.673 According to Spencer, an expert’s

statement about the authenticity of a painting is not pure, but hybrid opinion since it
at least implicitly “suggests the existence of specific underlying facts and conveys
the author’s judgement upon, or interpretation of, those facts”.674 As a consequence,
the question is whether these kinds of statements, that both contain the author’s
judgement and facts which warrant the conclusion, fall within the absolute privilege
for opinion.675 After all, each judgement is based on express or implied facts that can
be proven true or false and hence, the judgement can be actionable for negligence,
defamation or disparagement.676 But case law also suggests that hybrid opinions can
be entitled to the protection typically granted to pure opinions if the statement of
opinion is accompanied by a recitation of the facts on which it is based.677 Hence,
court decisions suggest that there is Constitutional protection for an opinion if the
expert is willing to reveal the factual information on which he based his determina-
tions and conclusions. As regards pure opinions, it was held in several cases
concerning bond rating agencies that pure opinion statements about a matter of
public concern which are made publicly, are not actionable, unless they are made
with actual malice.678 However, in all other cases, where a statement is probably
false, First Amendment protection for a statement about a matter of public concern
means that a plaintiff must prove that the defendant rendered the opinion with
“actual knowledge of its falsity or with reckless disregard of the truth”, namely the
Constitutional “actual malice” standard.679
Drawing conclusions from the rating agency cases, Spencer states that the author
of a catalogue raisonné, which is, by its very nature, always published for a public
audience, would receive “actual malice” protection as a hybrid opinion under the
First Amendment as a matter of “public concern”.680 On the other hand, an opinion
provided to a limited number of owners or buyers would not receive the protection
because it is not disseminated to the public at large and hence, is not considered “a
matter of public concern”.681 Experts who provide an opinion in a private context are
therefore well advised to make a full recitation of the facts on which they base their
opinions. By doing so, the experts provide a reasonable basis in fact for their opinion
673
Ollman v. Evans and Novak, 750 F. 2d 970, 1021-022 (D.C. Cir. 1984).
674
Spencer (2013), p. 2.
675
Ibid.
676
Ibid.
677
Steinhilber v. Alphonse, 68 N.Y.2d 283 (1986) at 289. Cf. the court’s finding in Roubroucks
v. Van Gogh Museum, where the artist’s foundation gave an elaborate and clear reason for its
conclusion and hence, did not act negligently in forming its opinion (Rechtbank Amsterdam, 08-01-
2014, ECLI:NL:RBAMS:2014:9).
678
Compuware Corp. v. Moody’s Investor Services, 499 F. 3d 520 (6th Cir. 2007). The rating
agencies’ defence was that judgements about creditworthiness are comparable to unprovable pre-
dictions about future events.
679
Spencer (2013), p. 4.
680
Ibid.
681
Ibid.
and the court is unlikely to involve itself in weighing up wrong facts against right
facts.682 Moreover, giving reasons will provide experts with a First Amendment
defence since a disappointed owner would have to prove that the expert acted with
actual malice, i.e. did not believe his opinion or had no factual basis at all for his
opinion.683 Consequently, scholars should be aware of the distinction between
“private” and “public” opinions because opinions which are shared with a select
group only have more limited Constitutional protection. However, a First Amend-
ment defence involves substantial legal work and in the current situation, with no
substantial fee-shifting statutory proposal on the horizon, experts are probably not
likely to be comforted by this possibility.684
3.5.3.2 No-Sue Agreements
Private experts and scholars who are not affiliated with an institution can obtain the
same waivers which artists’ foundation and authentication boards require or did
require, such as obligations not to sue and the recognition that their opinion is not a
warranty.685 These agreements have been held legally enforceable since Lariviere
v. Thaw.686 In this case, the court confirmed that the plaintiff waived his right to sue
the board by signing the application form, including the covenant not to sue.
Moreover, the court ordered the plaintiff to pay the costs of the expert’s legal defence
and in an unprecedented move, to also pay financial damages for bringing a frivolous
action. This case marks the first time that a court ordered monetary sanctions in an
authentication case.687 As a consequence, art experts should feel more at ease when
publishing their opinions since the threat of monetary sanctions for frivolous claims
is likely to have an inhibiting effect on potential claims by disappointed owners.
Such stipulations are a cost-effective option, but experts often fail to uniformly
request these agreements and informally offer opinions to clients.688 Furthermore,
experts compiling a catalogue raisonné can be inclined to attract submissions, which
might trump their liability concerns. Eventually, disappointed owners might not be
deterred by the risk of legal fees they face when violating the terms of such an
agreement.689 Consequently, no-sue agreements are of limited avail if experts do not
682
Ibid.
683
Ibid. Cf. Steinhilber at 289. See also Orenstein (2005), pp. 92 f.
684
Spencer (January 2013), p. 4.
685
686
Lariviere v. E.V. Thaw, the Pollock-Krasner Authentication Board, et al., 2000 N.Y. Slip Op,
5000(U), 2000 WL33965732 (N.Y.Sup.), and 2000 N.Y.Misc. LEXIS 648, NY Sup. Ct., NY
County, index no. 100627/99 (June 26, 2000). See also Conley (2004), p. 62.
687
Spencer in Spencer (2004b), p. 218.
688
Wallace (2015), p. 2.
689
This was the case in Simon-Whelan v. The Andy Warhol Foundation for the Visual Arts, Inc.
consistently insist on a written agreement with the party requesting their opinion or if
they volunteer opinions in their scholarly work.
3.5.3.3 Statutory Reform: The 2014 Proposal to Amend the New York
Arts and Cultural Affairs Law
Hahn v Duveen is said to have forever established in the minds of people that
opinions are a dangerous thing to give.690 This unsolicited-opinion-gone-wrong
case was the first lawsuit brought against an art expert for disparagement. Even
though none of the lawsuits that followed have resulted in a judgment against an
expert or authentication board, the sheer amount of litigation costs has caused them
to cease or sharply curtail their authentication activities.691
The recent announcements of several high-profile institutions and experts that
they would cease their authentication services has led to the impression that this was
caused by the increase in art values, fraud and litigious owners in the past years.692
However, the same reasoning had already prompted a discussion about legal reform
in 1966 when New York State Attorney General Louis J. Lefkowitz advocated a
state law granting immunity to accredited art experts who issued negative opinions
on authenticity, unless the owner could prove bad faith by the expert.693 Interest-
ingly, there was the same impression at the time that the law should offer more
protection to art experts in order to encourage them to offer their opinions more
freely.694 The bill would have introduced a certification system for art authenticators:
experts licensed under the system would have been granted immunity from suit if
they erroneously declared a work to be a forgery.
Yet, the proposal failed due to the Art Dealers Association of America’s oppo-
sition for the reason that it excluded dealers from the proposed accreditation and
immunity and because it was regarded as having the potential to facilitate fraud.695
In 2014, the New York Bar Association’s Art Law Committee drafted another bill
designed to protect art experts against frivolous lawsuits.696 The bill was introduced
to amend §13.04 of the New York Arts and Cultural Affairs Law by providing
690
Spencer (2004b), p. 217.
691
Kurtz (2015). Available at https://silo.tips/download/contents-vol-iii-litigation-and-arbitration-
1-litigation [last visited March 30 2022].
692
Ibid.
693
See Esterow (November 19, 1965).
694
Ibid. State Attorney General Lefkowitz was of the opinion that “under present conditions, many
art experts are reluctant to give opinions”.
695
See Levy (1991), p. 600.
696
Senate Bill No. S06794, A.9016, 2014 Sess. (N.Y. amend. §13.04. Arts & Cul. L., intro. Mar.
6, 2014, entitled “An act to amend the arts and cultural affairs law, in relation to opinions
concerning authenticity, attribution and authorship of works of fine art”. The full text of the
proposal is available at http://www2.nycbar.org/pdf/report/uploads/
ArtAuthenticatorProposalArtLawReportFINAL12.19.13.pdf [last visited March 30 2022].
certain procedural safeguards to authenticators. In summary, the bill defines an

authenticator as a person who: (i) is recognised in the visual arts community for
his expertise regarding the artist or work of fine art at issue;697 (ii) has no financial
interest in the work of art at issue or in any transaction involving the piece; and (iii)
acts in good faith. The procedural changes include that the factual allegations against
the authenticator must be: (i) specified with “particularity” (rather than by short and
plain statement), and that each element of the claim must be: (ii) proven “by clear
and convincing evidence” (rather than by a preponderance of the evidence); and that
a losing plaintiff must (iii) bear the authenticator’s legal costs (rather than each party
bearing their own fees). By introducing a higher standard of pleading (“with
particularity”) the plaintiff must prove that the expert made a specific statement,
the specific reasons why it was false, why he relied on the statement, and the way in
which it caused him financial harm. Usually, in a typical civil claim, a plaintiff would
have to prove that the claim is more likely than not true.698 According to the bill,
such a claim would have to be proven by clear and convincing evidence—a much
higher standard.699 Lastly, the fee-shifting provision would reimburse the prevailing
defendant.700 This is in clear contrast to the general rule in US litigation which
stipulates that each party has to bear its own legal fees. As regards the current state of
the proposed legislation, the bill failed in 2014 due to opposition by the New York
State Trial Lawyers Association, as it was deemed to hinder the filing of lawsuits.
Hence, the bill was redrafted and the provision that a losing plaintiff must cover the
defendant-expert’s legal fees was abandoned, making the decision on fee-shifting a
task for the court. Moreover, the burden of proof was lowered again: the amended
version requires plaintiffs to merely demonstrate a “preponderance of evidence”.701
At this time, the New York State Assembly has not yet passed the bill and it is
questionable whether the weakened version would still be of any added value. But
already in its first version, the bill was criticised because many art scholars would not
be willing and able to expend funds to take a case to trial to recover legal fees.702
697
This section entails that experts must defend their credentials and that less established experts
would be more vulnerable to not enjoying this level of protection as they may not yet be fully
“recognized [...] for their expertise”.
698
In civil cases, plaintiffs must prove their case by a preponderance standard: if a plaintiff can show
that a fact is 51 percent likely to have occurred, the court proceeds on the basis that it is true. See
Spencer (2004d), p. 143.
699
The standard “clear and convincing evidence” is considered to fall somewhere between the
“preponderance of the evidence” (more likely than not standard) and the “beyond any reasonable
doubt” standard which applies in criminal cases.
700
In the US, each party usually bears their own attorneys’ fees unless there is statutory authority
that provides otherwise. See Amineddoleh (2015), p. 426. In the Netherlands, for instance, Art.
1019h Wetboek van Burgerlijke Rechtsvordering contains a provision against frivolous lawsuits:
based on the consideration “bezint eer ge begint” (think well before you act).
701
Halperin (1 July 2015).
702
3.5.3.4 Risk Mitigation by Means of Insurance
Another way for experts to mitigate their risk exposure in the context of authentica-
tion is concluding Professional Indemnity (PI) insurances which indemnify the
policyholder for damages and claimant’s expenses, up to the sum insured, arising
out of any negligent act, error or omission.703 The principal benefit is that insurance
for authentication services also covers the costs of a legal defence—the most
immediate concern for a defendant-authenticator as damage awards are exceedingly
rare in such cases.704 Therefore, insurers began to market professional liability
insurance for art experts—legal defence costs incurred in a dispute with a disap-
pointed owner are far more likely than court-ordered damages and the risk of these
costs alone can place a significant burden on independent art scholars.705 However,
this type of liability insurance also presents several challenges for insurers’ under-
writing process because tailoring art authentication activities to the criteria tradition-
ally used for calculating risk has proven to be a difficult task: in order to obtain
approval and a price quote, the expert must indicate the artists in which he special-
ises, the number of opinions rendered per year, the value of the artwork, and his
procedures.706
This in itself is a time-consuming process and in addition, experts must provide a
protocol, i.e. an outline of their activities in advance and must act within the scope of
these activities as a condition of coverage.707 Generally, insurers have difficulties
assessing what factors are actual indicators of risk.708 This is mainly due to the
following reasons: firstly, the number of art authenticators is not considered large
enough for the insurer to reliably calculate the likelihood of a claim. Secondly, with
prices for art at peak level, potential claims would be equally high: indeed, in many
cases the amount is in the range of six- or seven-digit figures.709 Thirdly, the main
techniques relied upon in authentication are subjective and, as illustrated by recent
forgery cases, also error-prone. Fourthly, art experts do not form part of a legally
regulated body or consistently follow certain industry guidelines.710 As a result, the
insurer would either set the insurance premium very high or limit the sum insured—
and both scenarios do not render this type of insurance an economically attractive
option for art experts. As an example, Lloyds offers this type of insurance in
London.711 When determining art experts’ credentials and capabilities, the insurer
703
Hoener Ross (2006), p. 78 and Neuhaus (April 2014), p. 71.
704
705
Wallace (March 2015), p. 2.
706
Ibid. and Neuhaus (2014), p. 72.
707
Ibid.
708
Ibid.
709
Hoener Ross (2006), p. 78.
710
Neuhaus (2014), p. 72 and Rahm (June 18, 2013). This article hints at the fact that the profession
of art experts remains unregulated.
711
Ibid. See http://www.lloyds.com/lloyds/about-us/what-is-lloyds [last visited March 30 2022].
assesses an expert’s age, qualification, number of years’ experience, area of exper-

tise, revenue, and any membership of a recognised organisation.712 The last lends
credibility to the expert as it establishes professionalism and peer recognition.
Importantly, it is advised that the expert pay special attention to territorial and
jurisdictional limits of liability.713 In a truly global market, an expert’s opinion
might be requested outside of the United Kingdom or the European Union and
hence, territorial limits can apply. Therefore, experts are best advised to conclude
business agreements with their clients which state that the authentication will be
governed by and interpreted according to, for instance, English law.714 In sum,
experts must be aware that insurance will only cover their activities if this has been
approved in advance. In other words, insurance companies will generally require that
insureds undertake procedural safeguards to manage risk—including formal and
written agreements and procedures.715 Hence, insurance cannot be considered a
substitute for standardised, formal procedures and agreements, but instead, should
be seen as complementary to these practices. This should send a positive signal to art
experts since it exemplifies that clearly defined and transparent procedures can
benefit their work in many ways. Ironically, the availability of malpractice insurance
in the United States was regarded as having increased the chances of an expert being
sued because plaintiffs were more likely to incur the expenses and uncertainties of a
lawsuit if they were aware of the availability of substantial assets to pay a judg-
ment.716 Nevertheless, given the onerous costs of defending a lawsuit, even one that
proves to be groundless in the end, insurance is seen as a prudent investment. That,
plus a thorough familiarity with the standard of care and an awareness of the limits of
one’s own competence, can go a long way towards alleviating liability concerns.717
The defences discussed so far are not bullet-proof shields that protect experts from
being sued. However, it is also clear that the more difficult it becomes for a plaintiff
to succeed, the fewer lawsuits will be filed in the first place. The fact that a US court
fined a plaintiff for bringing a frivolous suit can be seen as a step in the right
direction. While there is a strong case to be made that art experts’ opinions are
712
Hoener Ross (2006), p. 72.
713
Ibid.
714
Ibid. However, it should be kept in mind that this applies only to contractual liability. For
liability arising from a tort, the choice of law does not apply.
715
Wallace (March 2015), p. 3. For instance, insurers generally insist that experts view an artwork
in person instead of relying on images alone. Furthermore, insurers will ask experts to state the
reasons underlying a decision - both for the opinion letter and possibly for a memorandum to file.
716
Levy (1991), p. 651.
717
Ibid.
valuable contributions to both scholarship and the market, it may be challenging to

convince the legislature that art scholars should be entitled to a unique protection in a
way that doctors, financial analysts and journalists are not.718 However, what is
expected from art scholars’ expertise is significantly different than what is expected
from medical doctors: the latter’s opinions are known to be in the “probably” or
“likely” variety, but this kind of opinion is not acceptable from an art scholar. The
client requesting an expertise would not be satisfied with the statement that a
painting “is likely by Picasso”—and neither would the market.719 As an aggravating
factor, art experts usually cannot be expected to have the necessary funds to defend
themselves in a lawsuit. Whether they are affiliated to an institution or working
independently, their income is in no way comparable to the financial exposure they
face when defending a lawsuit for malpractice. In practice, the 2014 proposal to
amend New York’s cultural affairs law did not pass as it was opposed by the
lawyers’ lobby and the 2015 proposal is considered to do “more harm than good”
as it undercuts the key art buyer protection under the Arts and Cultural Affairs
Law.720
Hence, qualified immunity is not a perfect fix as the expert would still have to
fund his defence in an ongoing case. According to Wallace, the qualified immunity
for experts proposed in 1966 would be ideal, especially since there are also potential
models in other areas of New York law, such as not-for-profit directors and officers
who enjoy qualified immunity unless they acted grossly negligently or intentionally
caused harm.721 The same applies to claims against architects and engineers: in order
to survive the motion to dismiss, a plaintiff must show a “substantial basis in law” for
the claim that the professional’s negligence caused injury.722 Qualified immunity, as
codified in the 1966 proposal, would have meant that expert opinions are statements
of pure opinion, made in the public interest, and that the same standard would apply
to opinions, irrespective of whether they were made in the context of a sale or in an
academic and unsolicited context.723 With the art market flourishing, there is no
indication that the pressure on art experts and other authentication bodies will
decrease in the near future. On the contrary, it seems that experts are increasingly
becoming involved in litigation involving authenticity-related claims. Thus, it is vital
for experts to take precautionary measures to shield themselves from such litigation.
Yet, the closure of authentication boards and experts’ refusal to issue opinions
altogether cannot be an advisable precautionary measure. Regarding their duty to
diligently perform authentication tasks, it is key that experts incorporate “hard facts”
718
719
Ibid.
720
Wallace (January 2016), p. 5.
721
New York Not-for-Profit Corp. Law Section 720-a.
722
CPLR 3211(11)(h).
723
provided by technical and scientific methods in their processes.724 Technical anal-

ysis can underpin conclusions that were previously based solely on personal knowl-
edge and instinct. Furthermore, experts should strictly avoid having any interest in
the outcome of the authentication since the appearance of venality can destroy their
reputation.725 Similar to the general operation of the art market, the authentication
process is often also perceived as opaque and arbitrary. This impression is further
reinforced when experts and authentication boards do not provide any reasons and
do not explain how they arrived at a certain decision. It is therefore crucial that
experts communicate to their clients a better understanding of the processes
employed and speak freely of the limitations, i.e. that absolute certainty in authen-
tication cases can only rarely be achieved: “the expert’s opinion must not only be
honestly arrived at, but it must appear to have been honestly arrived at”.726 In this
context, the standards expected in authentication differ considerably: while judges in
civil litigation of art cases employ the threshold of “more likely than not”, collectors
and buyers of art want to be assured that authenticity is established “beyond any
reasonable doubt”.727 Whether art historians, supported by scientific means of
authentication or not, will ever be able to live up to this standard is more than
questionable, and before proceeding to litigation, disappointed parties should realise
that what they are actually asking for might unachievable.
Moreover, art experts are well advised to set out the terms of business in writing.
This agreement should stipulate the scope of work being undertaken, the responsi-
bilities of the parties, any limitations to the expert’s liability, and the applicable law
and jurisdiction.728 Without a written agreement, experts are at a severe disadvan-
tage to prove their case in court. Finally, it is suggested that each expert should
consider the necessity and economic viability of taking precautionary measures such
as PI insurance to alleviate some of the risks incurred. Such insurance can cover legal
defence fees but might be extremely expensive and would certainly impose
formalised business procedures on any expert’s authentication activities. However,
in the field of art assessment, the development of a clear standard of care that
incorporates the importance of observable and reportable facts together with gener-
ally accepted guidelines is seen as a benefit that the threat of liability can bring
about.729
724
Thomas (2011), p. 10, available at https://authenticationinart.org/pdf/literature/general-
meeting-2011.pdf [last visited March 30 2022].
725
Neuhaus (2014), p. 73.
726
Spencer, Authentication in Court, Factors Considered and Standards Proposed in Spencer
(2004b), p. 209.
727
Ibid.
728
Neuhaus (2014), p. 73.
729
Ibid. p. 74, and Levy (1991), p. 650.
3.6 Authentication Boards 219
3.6 Authentication Boards
Artists’ estates are often managed by a foundation that aims to safeguard the artist’s
legacy as well as by authentication boards entrusted with the task of protecting the
oeuvre from forgeries and erroneous attributions.730 Authentication boards’ deci-
sions on authenticity have a very high standing in the art market and frequently,
artworks can only be sold with their approval, for instance in the form of a
confirmation of authenticity. Hence, the closure of numerous authentication boards
has affected the market significantly: works that have already been authenticated in
the past can still be bought and sold but works which are yet without a formal seal of
approval are destined to exist in limbo because the authorities that could have
authenticated them have ceased to exist. Before, it was considered an advantage
that these boards guarded against the subjectivity of an individual expert such as the
former “one-man authentication committee Bernard Berenson”.731 However, there
are also certain shortcomings associated with authentication boards that are directly
affiliated with an artist’s estate. In the case of Jean-Michel Basquiat, the former
authentication committee declined to authenticate a painting for moral reasons. The
respective work was painted on a steel door which once belonged to the artist’s drug
dealer.732 Next to that, the former Andy Warhol authentication board once authen-
ticated the signature and dedication on a print, but not the print itself.733 Examples
like this and their legal aftermath are discussed in the following case studies.
3.6.1 Case Studies
Over the past years, an unprecedented number of authentication boards and com-
mittees have been dissolved and have ceased their authentication activities. One of
the main reasons for this development is that these organisations had increasingly
become targets of authentication-related disputes. Faced with an enormous increase
in legal defence costs, the authentication committees of Keith Haring, Andy Warhol,
Roy Lichtenstein, Jean-Michel Basquiat, Jackson Pollock, and Robert Motherwell
decided to shut down their services.734 The following section takes a closer look at
730
Charney (2015), p. 74.
731
Ibid.
732
Ibid. p. 75. Basquiat died of a heroin overdose. For that reason, there were moral reasons to not
authenticate the piece in order to prevent its sale.
733
This has led lawyers Charles and Thomas Danziger to comment that “for now, it doesn’t matter if
you have a court ruling or a videotape of Andy Warhol himself painting the Soup Can in your living
room, if the work wasn’t approved by the (now defunct!) Andy Warhol Authentication Board, it
isn’t a Warhol.” See Danziger (May 8, 2014).
734
Kinsella (January 24, 2012).
Just like the Andy Warhol and Keith Haring authentication committees, the estate of Jean-Michel
Basquiat and the Authentication Committee were also faced with a lawsuit seeking $10 million in
the Keith Haring and the Andy Warhol authentication boards in particular and
assesses their modes of operation as well as the legal disputes which eventually
led to their demise.
3.6.1.1 The Keith Haring Studio, LLC
While it was still in operation, the Keith Haring Studio, LLC, a Delaware limited
liability company (the “Studio”), rendered opinions on whether submitted works
were authentic works by Keith Haring. To have a work considered, the owner was
requested to submit an Examination Agreement (formerly called Certification,
Release and Indemnity Agreement).735
The Examination Agreement stipulated that the Studio shall examine the work,
free of charge as a public service and shall render an opinion. It was expressly agreed
that the opinion is not intended as a statement of fact and may not be treated as such;
will represent only the Studio’s own opinion as to the authenticity of the work, based
on the information known to the Studio at the time; may state that no opinion is
provided if the Studio is unable to form an opinion as to the work’s authenticity due
to a lack of relevant information; may be changed or withdrawn by the studio after
the opinion is issued, if the studio, in its sole discretion, deems this to be appropriate
as the result of new information, changed circumstances or otherwise; and will
constitute a public document that the Studio in its sole discretion may provide to
any third party for any purpose. The remaining terms of the examination were set
forth in the “Standard Terms” attached to the agreement as “Exhibit A”.736
According to the Standard Terms, the owner had to accept that it is in the Studio’s
discretion to disclose the opinion to any third party, including auction houses, art
dealers, museums and law-enforcement officials.737 Moreover, the Studio
emphasised that a decision was not intended as a statement of fact, but only
represented an opinion based on the information available at the time and therefore,
could be reconsidered if new circumstances arose or new information was discov-
ered.738 The owner was thus under the obligation to use reasonable best efforts to
advise any potential subsequent owner of any revised opinion.739 Importantly, an
applicant was also requested to acknowledge that neither the Studio [. . .] makes any
warranty, guarantee or representation as to the correctness of the opinion and must
damages for its refusal to authenticate a painting attributed to the artist. The case was settled in late
2008 and the painting was declared authentic ever since. Nevertheless, the Authentication Com-
mittee was dissolved in 2012.
735
A copy of the Keith Haring Studio, LLC Examination Agreement is available to the author and
will be quoted from in this section.
736
A copy of the Standard Terms is available to the author and will be quoted from in this section.
737
Standard Terms, para. 3 (PUBLIC DOCUMENT).
738
Standard Terms, para. 4 (CHANGE OF OPINION).
739
Ibid.
release and discharge the Studio from and against any and all claims, liabilities,
losses and damages, and all costs and expenses, including without limitation court
costs and attorney’s fees, arising out of, based upon or resulting from the opinion
(or lack thereof) or any submission or examination of the work.740 Lastly, the
applicant had to agree to protect, defend, indemnify and hold harmless the Studio
from and against any and all claims [. . .] in connection with any loss or damage
claimed to be caused by the opinion, including without limitation any claim that the
opinion has diminished or harmed the value of the work [. . .].741
As will be seen, comparable covenants not to sue were also part of the Andy
Warhol Authentication Board’s submission agreement, which, in essence, stipulated
similar terms. Even though the Keith Haring Studio was dissolved in 2012, it was
afterwards sued by a group of plaintiffs for having publicly labelled 80 artworks in
their possession as fake and for refusing to re-evaluate them.742 In 2007, the
Foundation rejected the works’ authenticity without explanation and refused to
consider new evidence subsequently provided to establish the provenance. There-
fore, the lawsuit sought $40 million in damages on the ground that the Foundation
was considered to continue to have a harmful effect on the market’s reaction to Keith
Haring works and for “limiting the number of Haring works in the public domain,
thereby increasing the value of the Haring works that the members of the foundation
own or sell”.743 As will be seen in the following section, the allegations against the
Haring Studio mirrored a lawsuit brought against the Warhol Authentication Board
while it was still in operation. However, in contrast to the case against the Warhol
Board, a district court judge ruled that the Studio’s refusal to authenticate the
paintings could not be spun into an antitrust conspiracy to control the Keith Haring
market.744 The allegations were too broad to make it past the pleading stage, since
“any refusal by an auction house, dealer or gallery to sell a Haring without authen-
tication by the foundation could be a conspiratorial act”.745 In addition, the Haring
Studio ceased its official authentication activities prior to the lawsuit so that it could
not plausibly be alleged that it still controlled authentication of Haring’s work.746
Therefore, the Haring Studio did not have to defend its position—in contrast to the
740
Standard Terms, para. 6 (RELEASE).
741
Standard Terms, para. 7 (REPRESENTATIONS AND WARRANTIES: INDEMNITY.
742
Weiser (February 21, 2014) and Kinsella (February 26, 2014a).
743
Ibid. For instance, the Foundation filed its own lawsuit against the organisers of the exhibition
“Haring Miami: A Celebration of the Life & Art of Keith Haring” arguing that most of the paintings
on display were fakes. Even though it no longer authenticates Haring’s works, the foundation is still
the successor-in-interest to and owner of the intellectual property of Keith Haring.
744
Boucher (March 10, 2015) and Adam Klasfeld, Keith Haring Foundation Dodges $40M
Lawsuit, Courthouse News Service, March 9, 2015, available at https://www.courthousenews.
com/keith-haring-foundation-dodges-40m-lawsuit/ [last visited March 30 2022].
745
Boucher (March 10, 2015). In other words, auction houses and dealers can have legitimate and
lawful reasons to unilaterally decide not to sell an artwork.
746
Ibid.
Andy Warhol Art Authentication Board which had to plead in several lawsuits and
faced substantial legal defence costs.
3.6.1.2 The Andy Warhol Art Authentication Board, Inc.
In early 2012, the Board of Directors of the Andy Warhol Foundation for the Visual
Arts, Inc. dissolved the Andy Warhol Art Authentication Board, Inc. after a series of
legal disputes over its authentication processes had cost the Foundation millions of
dollars in defence costs.747
Before, an applicant seeking to have his purported Warhol artwork authenticated
had to accept that the Board, after having formed an opinion, was allowed to have an
identification number and a stamped or written legend to be written, stamped or
otherwise affixed to the work.748 Alternatively, the Authentication Board could
deliver a photograph of the work with such legend that or other endorsement affixed
to it. The legend would indicate the Authentication Board’s opinion, or that the
Authentication Board could form no opinion, as to the authenticity of the work.749 In
general, the Board would issue three different opinion letters, attached to its General
Terms as Exhibits A, B and C, respectively.750 A letter such as the one attached as
Exhibit A will be delivered if the opinion of the Authentication Board is that the
work is a genuine work created by Andy Warhol; a letter such as the one attached as
Exhibit B will be delivered if the opinion of the Authentication Board is that the
work is not a genuine work created by Andy Warhol; and a letter such as the one
attached as Exhibit C will be delivered if the Authentication Board is unable at any
time to form any opinion as to whether the work is a genuine work created by Andy
Warhol.751 Moreover, the applicant had to acknowledge that forming an opinion as
to the authenticity of a work purporting to be by Andy Warhol is often very difficult
and will in most cases depend upon subjective criteria which are not capable of proof
or certainty and that the conclusion, if any, reached by the Authentication Board
respecting the work is an opinion only, is in the absolute discretion of the Authen-
tication Board and, to the extent that the opinion is that the work is authentic, shall
not be deemed or held out by owner or any other person or entity to be a warranty of
any kind.752 Importantly, the agreement includes a covenant not to sue, which also
excludes the potential claim that the opinion expressed by the Authentication Board
747
Ragai (2018), p. 95 and Butin (2020), p. 215.
748
A copy of the Andy Warhol Art Authentication Board, Inc. General Terms is available to the
author and will be quoted from in this section. See p. 2.
749
Ibid.
750
A copy of the Andy Warhol Art Authentication Board, Inc. Opinion Letter (Exhibit B) is
available to the author and will be quoted from in this section.
751
Andy Warhol Art Authentication Board, Inc. General Terms, p. 2.
752
Ibid., p. 3 (i).
is not correct.753 However, this covenant was attacked in court and successfully set
aside in legal disputes. Lastly, like the Haring Studio, the Board stressed that new
information could cause it to re-consider a previous decision and to issue a revised
opinion.754 In such a case, the Authentication Board will deliver a substitute letter
expressing the Authentication Board’s revised opinion and the owner must promptly
return to the Authentication Board the original copy of any letter for which a
substitute letter is issued. In line with this, the owner must use reasonable efforts
to advise a buyer or any subsequent owner of such a change and if the Authentication
Board’s prior opinion was to the effect that work is authentic and this opinion
changes, owner must take any steps within owner’s power to correct the prior
legend, or endorsement, if any, on the work.755 In addition, it is also expressly stated
in the opinion letter denying a work’s authenticity (Exhibit B) that the Board’s
decision is merely an opinion based upon an inspection of the work and circum-
stances known to the authentication board at this time. Neither the Authentication
Board nor the Andy Warhol Foundation [. . .] shall have any liability whatsoever to
anyone by reason of the foregoing opinion.756
All in all, the terms of the submission agreement resemble to a great extent those
stipulated by the Keith Haring Studio. In summary, opinions were not intended to be
statement of facts, but rather the committees’ subjective opinion which could be
altered after new information or advances in scholarship led to a different conclu-
sion. Additionally, applicants had to sign covenants not to sue, thereby waiving their
right to sue the committee in case they considered the (negative) opinion to be
incorrect. For instance, in Thompson v Andy Warhol Found. for the Visual Arts,
Addison Thompson sued the Foundation for inter alia breach of contract after the
Board denied authenticating a drawing on three subsequent occasions.757 Each time,
Thompson provided additional information which, in his opinion, bolstered the
claim that the drawing was authentic. However, the court concluded that the
covenants not to sue in the agreement with the Authentication Board barred his
claims for breach of contract and negligence.758 Moreover, the court stated that there
was no special relationship between the parties that would give rise to a tort claim759
and referred to the court’s previous observation that the market is the appropriate
place to resolve authentication disputes.760 However, it was the legal fees incurred in
connection with such lawsuits that made the Authentication Board untenable. In
753
Ibid., p. 3 (iii).
754
Ibid. pp. 3f.
755
Ibid., p. 4.
756
Andy Warhol Art Authentication Board, Inc.: Opinion Letter (Exhibit B).
757
Thompson v Andy Warhol Found. for the Visual Arts, Inc. 2011 NY Slip Op 52046(U).
758
Thompson v Andy Warhol Found. for the Visual Arts, Inc. 2013 NY Slip Op 01159.
759
Mandarin Trading Ltd. v Wildenstein, 16 NY3d 173, 944 NE2d 1104, 919 NYS2d 465 [2011].
760
Thome v Alexander & Louisa Calder Found., 70 A.D.3d 88 890, N.Y.S.2d 16 [2009].
2010 alone, legal fees and defence costs amounted to $7 million.761 An illustrative
example is therefore the case of collector Joe Simon-Whelan who accused the Andy
Warhol Authentication Board and the Andy Warhol Foundation for the Visual Arts,
Inc. of conspiracy and market monopolisation. In particular, he alleged that the
Foundation conspired to restrict the market for authentic Warhols as a way of
limiting supply and creating artificial scarcity to drive up the value of its own
collection.762 The claim was based on the fact that the Foundation itself had
significant holdings of Warhol artworks.763
3.6.1.3 Simon-Whelan v. The Andy Warhol Foundation for the Visual

Arts Inc.
After the Andy Warhol Authentication Board, Inc. denied the authenticity of a work
purported to be by the artist, the owner of the work Joe Simon-Whelan brought an
antitrust lawsuit against the Foundation and the Board on the grounds that these
institutions had “complete control over the authentication of Warhol artworks by
virtue of the Board’s status as sole recognised authentication authority for Warhol
works” and that the Board “has denied authentication as means of retaliation”.764 In
particular, Simon-Whelan sued the Board for a violation of section 1 of the Sherman
Antitrust Act,765 which prohibits conspiracies in restraint of trade and section
2, which prohibits monopolisation.766 In essence, the case centred on a painting by
Andy Warhol (Self-Portrait, from a series of seven), which Simon-Whelan had
purchased in 1989. Purportedly, the work was created in 1965 and the Board had
previously authenticated other paintings from the series.767 The silkscreen in ques-
tion was endowed with a hand-written confirmation of authenticity by Fred Hughes,
who had been Warhol’s business manager for more than 25 years.768 When Simon-
761
Antiques Trade Gazette, Legal costs kill off Andy Warhol Foundation’s vetting board, October
25, 2011.
762
Simon-Whelan v. The Andy Warhol Foundation for the Visual Arts, Inc., No. 07 Civ. 6423
(LTS), 2009 WL 1457177, 2009 U.S. Dist. LEXIS 44242, F.Supp.2d (S.D.N.Y. May 26, 2009).
763
The Foundation was established shortly after Warhol’s death in 1987 and received artworks
worth hundreds of millions of dollars from his estate in 1991. The value of the collection was
estimated at $400 to $500 million. See Dorment (October 22, 2009) and Vogel (October 19, 2011).
764
Simon-Whelan v. The Andy Warhol Foundation for the Visual Arts, Inc., at 3. This refers to the
fact that, generally, dealers and auction houses only accept artworks for sale which are included in
the artist’s catalogue raisonné or have previously been authenticated by a commonly accepted
expert or authentication body.
765
Sherman Antitrust Act § 1, 15 U.S.C. §1 (2006).
766
Sherman Antitrust Act § 2, 15 U.S.C. §2 (2006).
767
Ibid. at 3–4.
768
Zeitz (1 August 2007). It should be kept in mind that Warhol and his “factory” produced a vast
output of prints and therefore, an authentic artwork must not necessarily have been touched by
Warhol himself.
Whelan wanted to sell the painting in 2001, he submitted it to the Authentication

Board, which denied its authenticity, but offered to consider it again with additional
documentation. Consequently, the painting was resubmitted in 2003 and the Board
“fraudulently denied the authenticity again”.769 The case was the first antitrust
lawsuit against an authentication board to survive the defendant’s motion to dismiss,
therefore suggesting potential liability exposure under the Sherman Act for pro-
fessionals who render opinions on the authenticity of artworks.
In the past, boards that denied authenticity usually risked tort liability for dispar-
agement, defamation, or negligence. Importantly, the District Court for the Southern
District of New York denied the defendants’ motion to dismiss the complaint for
failure to state a claim, basing its decision on the submission agreement, including
the covenant not to sue, because the action “includes allegations that the Submission
Agreements were utilized in an effort to conceal, and to protect defendants from
recriminations arising from, intentional, illegal action”.770 In addition, the antitrust
claims were allowed to proceed since the allegations sufficiently satisfied the
plausibility standard to defeat the motion to dismiss and the plaintiff adequately
alleged antitrust injury.771 Although the case was eventually dismissed with preju-
dice, it is nevertheless the first case to survive a motion to dismiss and hence,
provides useful analysis as to what elements need to be proven in order for a case
to move to discovery.772
Details of the Claim and the Motion to Dismiss
Until Simon-Whelan, no plaintiff who had attempted an antitrust claim against an

authentication board had ever survived the defendant’s motion to dismiss.773 In
addition, antitrust litigation is tremendously complex774 and before dragging a
defendant through discovery, the plaintiff must successfully allege: (i) “sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face
769
Simon-Whelan v. The Andy Warhol Foundation for the Visual Arts, Inc., at 5–6. As a result, the
painting was stamped “denied” twice. Examples of the evidence Simon-Whelan produced are letters
by Paul Morrissey, a former Warhol manager, Rainer Crone, author of the first catalogue raisonné,
Sam Green, former curator at the Institute of Contemporary Art in Boston, and Warhol’s friend John
Richardson.
For copies of the additional documents and evidence submitted, see Joe Simon-Whelan’s
website: http://www.myandywarhol.eu/my/look_evidence.asp [last visited March 30 2022].
770
Ibid. at 8–9.
771
Ibid. at 10–11.
772
Lacy (2011), pp. 188 and 191.
773
Ibid. p. 191. See for instance Vitale v Marlborough Gallery, No. 93 Civ (PKL) 6276, 1994 WL
654494 (S.D.N.Y. July 5, 1994), Kramer v Pollock-Krasner Foundation, 890 F. Supp.
250 (S.D.N.Y. 1995).
774
Ibid. p. 192. The litigation ultimately cost defendants nearly $7 million in legal fees!
[. . .]” which (ii) occurred within a “relevant market”, and (iii) caused antitrust
injury.775
Plausibility
The alleged violation of Section 1 of the Sherman Act refers to collusion between the
foundation that sold Warhol artworks and the Board which authenticated them. The
alleged violation of Section 2 is based on the plaintiff’s claim that the Foundation
used the Board to remove competing Warhol artworks from the market to artificially
drive up the value of its own collection.776 The court found that the alleged violation
of Section 1 met the plausibility standard as the Board reversed prior authentication
determinations, refused to authenticate works which the Foundation had attempted
to purchase, and was not independent of the Foundation.777 In addition, the court
also found sufficient allegations of a Section 2 violation, which requires that facts
must be “indicative of anticompetitive conduct with a specific intent to monopolise
and a dangerous probability of achieving monopoly power”.778 In this regard, the
Board’s refusal to authenticate an artwork which it had previously attempted to
purchase itself was seen as an indication of such a violation. Consequently, the
plausibility requirement was met, and the court went on to consider whether the
probable collusion in fact occurred within a relevant market.
Relevant Market
In addition, both sections require that the anticompetitive effects occurred within a
relevant geographic and product market. The relevant market includes both a
“geographic market” where the defendant competes as well as a “product market”
with which the defendant’s products compete.779 While it can be argued that
artworks exist within a rather broad market for art in general, the court held that
there can indeed be distinct submarkets for distinct products. It was established that
there is a relevant submarket for Warhol artworks within the market for modern and
contemporary art. Referring to Vitale v Marlborough Gallery and Kramer v the
Pollock-Krasner Foundation, Simon-Whelan had claimed that it is possible to find a
775
Simon-Whelan v. The Andy Warhol Foundation for the Visual Arts, Inc., at 4.
776
Ibid. p. 192.
777
Simon-Whelan v. The Andy Warhol Foundation for the Visual Arts, Inc., at 5. Simon-Whelan
asserted that the Foundation had previously offered to purchase the very same painting for its own
collection.
778
Lacy (2011), p. 193.
779
Ibid. p. 194.
relevant market for famous works within the modern and contemporary art
market.780
Andy Warhol was a very prolific artist whose works have reached a distinctive
fame within the general market. While this might not be the case for many other
artists, it does not come as a surprise that the court confirmed the existence of a
submarket for works by Andy Warhol. In fact, the Andy Warhol market has even
been referred to as the “one-man Dow Jones” as the market of this specific artist is
seen as an indicator of market movements.781
Antitrust Injury
Having established plausibility and the relevant market, the court addressed whether
there had been antitrust injury. According to Simon-Whelan, the Board’s practice of
marking refused artworks with a “denied” stamp prevented him from participating as
a seller in the market for authentic Warhol artworks. The court deemed this to be a
sufficient antitrust injury.782
In November 2010, Simon-Whelan asked the court to conclude the litigation and to
allow parties to withdraw from the case with prejudice because he lacked the funds
and resources necessary to continue.783 Hence, the court was unfortunately not able
to proceed with the case and to deliver a judgment on the antitrust claims. It is argued
that Simon-Whelan increases the liability of art professionals who authenticate
artworks because in addition to tort litigation, antitrust litigation also has the
potential to make this kind of work even riskier.784 However, it should be kept in
mind that this case’s particular features were what enabled it to survive the defen-
dants’ motion to dismiss. First and foremost, it was very clear in this scenario that the
art market accepted the Andy Warhol Authentication Board as the sole authority on
authenticity: auction houses would not sell a work unless it had been approved and
780
Simon-Whelan v. The Andy Warhol Foundation for the Visual Arts, Inc., at 6.
In Vitale, the court had found that: “paintings by Jackson Pollock may constitute a submarket,
the monopolisation of which may be unlawful” and in Kramer that: “a submarket for famous
artworks can be a relevant market sufficient to state a claim”. See Jacobson (ed) Chicago
(2007), p. 560.
781
782
For a thorough analysis of what types of market restraint occurs when an art authentication board
prevents an owner from marketing his artwork, see Lacy (2011), pp. 196ff.
783
For a copy of Joe Simon’s letter to the New York court dated November 5, 2010 see http://www.
myandywarhol.eu/news/show_article.asp?ID=62 [last visited March 30 2022].
784
Lacy (2011), p. 193.
deemed authentic by the Board.785 Since the authentication body was closely
connected to the Foundation and the estate that managed the artist’s legacy, it is
no surprise that the court saw a “dangerous probability of achieving monopoly
power”. Moreover, since Andy Warhol was a very prolific artist who had his high
output almost mass-produced in his own “Factory”, the court established that his
market constituted a recognised sub-market within the overall art market.786 This is
not likely to be the case for many other artists. Nevertheless, there are also more
general findings to be taken away from this dispute.
During its time of operation, the Board frequently came under scrutiny for what
was considered secretive, arbitrary and biased decision-making.787 It was general
practice that no explanatory statement was given for a particular decision, and this
led to the impression that the decision-making process was not consistent, but rather
arbitrary. However, in a letter to Simon-Whelan dated May 2004, the Board outline
its rationale for denying the painting’s authenticity: the work was identical to ten
other paintings submitted and since the “existence of ten identical works is without
precedent in the corpus of Warhol’s paintings”, its decision was negative.788 This
decision is at odds with the fact that the very same painting was declared to be
authentic by Warhol’s estate agent Fred Hughes in 1987 and that a work from the
same series was signed by Warhol and dedicated to his Swiss dealer Bruno
Bischofberger.789 With regard to the latter, the Board came to the unusual conclusion
that it was not an authentic work by Andy Warhol, while simultaneously stating that
it was signed, dated and dedicated by him.790 In other words, the Board was of the
opinion that Warhol signed and dedicated a work, which was in fact not his artistic
output. Given Warhol’s relaxed approach to the production and the signing of “his”
works, one might conclude that he had authorised the painting by adding his
signature and dedication.
It is consequently more than dubious that the Board denied the authenticity of a
work, which the previous estate manager apparently deemed to be authentic several
years before. But since no additional justification was given, the basis for this
negative finding remains merely a guess. What would have been particularly inter-
esting to know is the Board’s assessment of the fact that Warhol chose another self-
785
This is due to the fact that auction houses are only prepared against suits for negligence if they
conducted due diligence, which in this case is equivalent with submitting the artwork to the Board
for authentication.
786
The Andy Warhol market is often described as the “barometer” for the overall art market and has
dominated world auction sales in the last 16 years: in 2014, sales of the artist’s paintings amounted
to about $517 million. See ArtTactic, Andy Warhol: Market Update - June 2016, available at https://
arttactic.com/product/andy-warhol-market-update-june-2016/ [last visited March 30 2022].
787
Kinsella (January 2, 2011).
788
Ibid. Fred Hughes was the sole executor of the Andy Warhol estate for 14 years and his decision
was supported by Vincent Fremont, at the time alternative executor and later on, main sales agent
for the Foundation.
789
Also this painting was rejected by the Board twice.
790
Ibid.
portrait from the series, namely the one dedicated to Bruno Bischofberger, as cover
image for the Andy Warhol catalogue raisonné of 1970.791 In any event, this
scenario exemplifies that the Authentication Board, during its time of operation,
was able to control the market in Andy Warhol works and given the Foundation’s
own financial interest, why it was accused of abusing this powerful position. Even
though the lawsuit between Simon-Whelan and the Foundation did not primarily
focus on the question whether the painting was authentic, authentication issues were
discussed extensively in depositions, evidence production and expert reports.
And ironically, it seems that the very complex and contentious debate about the
authenticity of Andy Warhol works is still ongoing: in July 2017, author and art
dealer Richard Polsky, who offers authentication services for works by Andy
Warhol and other artists, launched an unauthorised addition to the Warhol catalogue
raisonné that will include the works previously rejected by the Authentication
Board.792 Among the works listed in the catalogue is also Simon-Whelan’s
contested Self-Portrait.793 While the Foundation is working on its own addendum,
Polsky’s RPAA Andy Warhol Catalogue Raisonné Addendum has no connection to
and is not authorised by the Andy Warhol Foundation.794 After the closure of the
respective authentication committees, Richard Polsky aimed to become an authority
in matters of authenticity on Andy Warhol, Roy Lichtenstein and Jean-Michel
Basquiat.795 His ultimate goal is for his service to become one of three accepted
methods of authentication. Currently, the first two accepted methods are inclusion in
the catalogue raisonné or an approval from an expert or an (now mostly defunct)
authentication committee.796 Polsky charges a flat fee of $2500, consults with other
experts in the decision-making process and importantly, provides clients with an
791
The catalogue raisonné was compiled by Professor Rainer Crone with Warhol’s express consent.
In his letter to the court, Simon-Whelan cites Rainer Crone: “Andy Warhol personally chose the
signed and dedicated Red Self Portrait for the cover of the [catalogue] raisonné”, emphasising that
he worked closely with Warhol on numerous books between 1968 and 1987.
792
Kinsella (July 19, 2017b).
793
See http://richardpolskyart.com/catalogue-listings.php [last visited March 30 2022]. Next to
stating comprehensive information on provenance, the catalogue entry also points to the fact that
the paintings were rejected by the Authentication Board as they were not produced in his own
studio, but at a silkscreen shop. However, the entry emphasises that the silkscreens were created
under “Warhol’s approval and supervision” and “given Warhol’s philosophy of detaching himself
from the art making process, his relaxed approach to signing his paintings, and his desire to create
works by functioning as an art director”, should be considered as rendering them authentic works. In
addition, the painting in question was signed by Fred Hughes, Warhol’s business manager and is
one of seven Self-Portraits which were commissioned by Richard Ekstract, a New York publisher.
Ekstract had, under the express authorisation and instruction of Warhol, arranged for this series of
paintings to be created from an acetate which Warhol provided, a method which was typical for
Warhol.
794
Polsky emphasises that he does not trade in the objects he authenticates and charges a flat rate for
examination.
795
Bodick (November 9, 2015).
796
Ibid.
explanation that lays out how he arrived at his decision.797 In the same manner, his
Authentication Request Form also includes a covenant not to sue.798 In many
regards, the cases involving the Haring and Warhol authentication committees
serve as valuable examples of the ostensibly irreconcilable interests that are at
stake in authenticity disputes, the difficulties that a disappointed owner faces once
he approaches the authenticating body, and also the power such an authority can
enjoy in the marketplace. Whether it is an individual expert or a board, if there is any
direct interest in the respective artist’s market, the opinion is obviously prone to
accusations of conflict of interest and abuse of power.
Therefore, authentication organisations should avoid conflicts of interest, or
perceived conflicts of interest, by ensuring that the authentication process is not
linked to the potential sale of competing works. At last, the practice of stamping
“denied” on rejected artworks or removing the contested signature renders an
artwork practically worthless and obviously does not accommodate the express
acknowledgement that an opinion is subject to change if new information emerges.
The latter practice was employed by the Nolde Stiftung whose authentication terms
stipulate that in case of a negative finding on authenticity, the foundation has the
right to remove or otherwise modify the inauthentic signature. Since authentication
based on stylistic enquiry only is inherently subjective, these practices seem to be
highly disputable. In the words of the German art historian Max J. Friedländer, “it is
indeed an error to collect forgery, but it is a sin to stamp a genuine piece with the seal
of falsehood”.799 As a consequence, less restrictive alternatives should be consid-
ered, such as publishing a denial decision in the catalogue raisonné.
3.6.3 Future Frameworks: Applying Antitrust Aspects

of Certification and Standards Setting to Authentication
Simon-Whelan shows that antitrust lawsuits may be on the rise within the art world.
Because of this development, it is suggested that authentication boards should
consider how certification, standard setting and the adoption of best practices can
raise antitrust liability.800 To begin with, an industry standard is “a document
established by consensus and approved by a recognised body that provides for
797
“While colleagues and reference books might be consulted, Richard Polsky’s decision is
ultimately based on 30-plus years of investment with Warhol’s art. Over time he has looked at
literally hundreds of authentic Warhol canvases, along with a surprising number of pictures which
were incomplete, cut off in strips from larger multi-image paintings, discarded as rejects, and run off
without his permission. Richard Polsky has also seen his share of outright forgeries.” See Richard
Polsky’s website at http://richardpolskyart.com/[last visited March 30 2022].
798
The Richard Polsky Art Authentication Form is publicly available at https://richardpolskyart.
com/submitting-electronically/authentication-request-form/ [last visited March 30 2022].
799
Hoving (1996), p. 239.
800
Lacy (2011), p. 205.
common and repeated use”.801 Such standards can be government mandated or the
result of voluntary self-regulation. After an industry standard has been established,
third-party certification bodies are tasked with assessing whether products conform
to the set standards.802 This means that when an authentication board authenticates
an artwork, it certifies that the object has met the authenticity standard. Drawing on
these principles, art authentication boards are best advised to ensure that their
authentication services benefit the market.803 In other words, these considerations
should lead authentication boards to ensure that they strengthen the market system
on an industry-wide basis and that they indeed contribute to the state of scholarship
transparently and fairly.
However, authentication boards’ methods of operation often appeared to be
arbitrary and secretive—therefore, it is not surprising that disappointed collectors
brought claims alleging antitrust violations. And, evidence that standard setting or
authentication had been used improperly and arbitrarily can raise antitrust con-
cerns.804 As a result, emerging practices in the art world increasingly include
guidelines which prohibit certifying bodies from offering self-interested opinions
and advise providing documentation for their decisions.805 Despite these recom-
mendations, authentication boards often continue to conduct their work in secret—a
strategy that has proven harmful in defending against antitrust lawsuits.806 After all,
clearly defined procedural standards with clear criteria, appeal processes and a
mechanism for amending existing standards have the potential of offering protection
to boards that consistently follow such procedures. Therefore, antitrust laws
concerning certification and standard setting can both strengthen causes of action
against authentication bodies and reduce their liability by suggesting best practices
and standard procedures to follow.
3.6.4 Mayor Gallery v. The Agnes Martin Catalogue

Raisonné LLC: A Sigh of Relief for Authentication
Committees?
The recent judgment in an action brought against the Agnes Martin Catalogue
Raisonné LLC provides a sigh of relief for authenticators. In April 2018, the
New York Supreme Court decided in favour of the Agnes Martin Catalogue
Raisonné LLC (AMCR) in a lawsuit brought by the London-based Mayor
801
Ibid.
802
Ibid.
803
Ibid. p. 207.
804
Ibid. p. 211, citing Hatley v. Am. Qarter Horse Ass’n, 552 F.2d 646, 653–54 (5th Cir. 1977).
805
See for instance the College Art Association Authentication Guidelines and the Ethical Code
adopted by the Art Dealers Association of America.
806
Lacy (2011) p. 214.
Gallery.807 As of 2012, the AMCR began to render opinions on works purported to

be by Agnes Martin. 808 Between 2009 and 2013, the Mayor Gallery sold several
works by Agnes Martin for a total of more than $7 million, warranting the authen-
ticity to purchasers. When the buyers submitted the works to the AMCR authenti-
cation committee, the committee declared them to be fake and declined to include
them in the catalogue raisonné. As a result, Mayor Gallery rescinded the sales and
submitted the works for authentication again, however, with the same result.809
Therefore, Mayer Gallery sued the AMCR for tortious interference with prospective
business relations, negligence and for failing to follow its own procedure.810 The
courts rejected the claims and dismissed the case as there was no evidence that the
AMCR did anything illegitimate or for an improper reason.
Moreover, the claim to find the committee members individually liable failed as
well since there was nothing to suggest that they had acted outside the scope of their
roles. Another significant outcome of the case is that the court upheld the AMCR’s
examination agreement811 which must be signed before submitting a work for
analysis and which provides for the award of attorneys’ fees if someone who
submitted a work later brings a lawsuit in this matter. Above all, the court’s decision
is a testament to the importance of a carefully drafted agreement that protects an
authenticator against the costs of a later defence of his opinion in court. Otherwise,
the well-known collateral effect of an authentication committee having to bear its
own defence costs will arise, even when it prevails in the lawsuit. In addition, the
examination agreement clearly outlined the scope of the committee’s examination
and consequently facilitated the court’s finding that the committee had done what it
had agreed to do in the respective agreement.812 This validates the idea that
clarifying rights and responsibilities does not require an extensive contract and
that such an approach should become standard for authentication submissions.
807
The Mayer Gallery Ltd. v The Agnes Martin Catalogue Raisonné LLC, No. 655489/2016, 2018
WL 1638810 (N.Y. Sup. Ct. Apr. 5, 2018). See further O’Donnell (June 12, 2018).
808
For more information see the website https://artifexpress.com/pages/agnes-martin [last visited
March 302,022].
809
Abrams (October 25, 2016). In the case of the painting Day & Night (1961-64) which was
bought by collector Jack Levy, Mayor Gallery thought that Levy’s submission agreement contained
flaws in the provenance list and submitted the painting again with a corrected list.
810
The Mayer Gallery Ltd. v The Agnes Martin Catalogue Raisonné LLC, pp. 27ff.
811
The examination agreement is available for download at https://artifexpress.com/pages/agnes-
martin [last visited March 30 2022].
812
The Mayer Gallery Ltd. v The Agnes Martin Catalogue Raisonné LLC, p. 32.
3.7 The Catalogue Raisonné 233
3.7 The Catalogue Raisonné
As mentioned before, a catalogue raisonné is a standard tool in authentication and

hence, an art expert may also face liability for including or not including an authentic
or inauthentic artwork in what is considered as standard literature on an artist’s
œuvre. Literally, the term catalogue raisonné refers to a studied and methodical
catalogue. According to the Oxford English Dictionary, it is a descriptive catalogue
arranged according to subjects, or branches of subjects; hence, generally or loosely, a
classified or methodical list. The Authentication in Art workgroup furthermore
specifies that a catalogue raisonné is understood “as a critical catalogue of the
complete, known oeuvre by a single artist or a clearly defined part of it (for instance
the work produced in a given period or work in a specific medium)”.813
This means that in modern language, a catalogue raisonné focuses on the output
of a single artist. However, this definition was not always absolute. Instead, cata-
logues from the eighteenth century were dedicated to a single collection, covering
many artists, and not to a single artist covering many collections.814 According to
Franklin, the term catalogue raisonné originated in Paris in the 1720s and was
pioneered by Edmé-François Gersaint, who published the first comprehensive com-
pilation of Rembrandt’s printed œuvre in 1751.815 The subsequent growth in
complexity was linked to the spread of auction sale catalogues and it was French
custom that rendered the distinction between an inventory and a catalogue more
evident: a sale catalogue was usually published separately from a second document
the “ordre de vacations”, which stated the lot numbers in the order of sale.816 As a
result, the catalogue was no longer produced in arbitrary order, but according to an
alphabetical, chronological or stylistic scheme. In the nineteenth century, the term
catalogue descriptif et raisonné was eventually used to acknowledge that a catalogue
contained factual information regarding an artwork’s qualities.817 In recent times,
catalogues raisonnés have become a standard reference tool in the authentication
process.818 This presupposes that such a reference tool was compiled in a scholarly
and credible manner in order to allow for valid research into a work’s provenance,
authorship and authenticity.819 Given the position as a standard tool of reference,
813
Authentication in Art, Guidelines for Compiling a Catalogue Raisonné (May 2014), p. 1. See
also Demarsin, Proefschrift (2008a), p. 101, and Demarsin, Handel in kunstvoorwerpen, p. 121.
814
Franklin (2003), p. 41.
815
Ibid. See also Unverfehrt (2000), p. 139.
816
Franklin (2003), p. 41.
817
Ibid. Generally, a catalogue raisonné includes an illustration of the object, its dimensions and
medium, the date of creation and as far as known, information about provenance, exhibition and
bibliographic history. While some catalogues only contain the barest details, others may include
interpretive essays and extensive bibliographic information as well.
818
819
Conley (2004), p. 56. See also IFAR’s Catalogue Raisonné Users’ Guide, available at https://
www.ifar.org/users_guide.php. IFAR’s website also offers a database with published catalogues
and those still in preparation.
experts are expected to exercise even greater care in case that a catalogue raisonné
about the artist concerned does not exist.820 While there are no formal requirements,
authors of a catalogue raisonné usually have extensive knowledge on the work and
life of the artist in question, for instance Werner Spies’s on the œuvre of Max Ernst.
Yet, the fact that such compilations are regarded as giving a “definitive” listing of an
artist’s work, fails to allow the circumstance that also the author of a catalogue
raisonné might come to erroneous conclusions.821 While the inclusion or exclusion
of a work from a catalogue raisonné is equivalent to a statement on authenticity or
inauthenticity, catalogues raisonnés also represent a certain potential for art forgers.
Illustrated by the Beltracchi case, catalogues might lack a work’s fundamental
characteristics such as size, composition, signature, and whereabouts and hence,
can pave a forger’s way for filling in such gaps.
If the catalogue also does not contain an image of the respective artworks, forgers
can be encouraged to fill in this gap with one of their creations, especially if the work
had been lost before. It is hence argued that “the apostolic authority of such
compendia is being revealed as increasingly vulnerable”.822 Another limitation is
that catalogues raisonnés may not be comprehensive: Gerhard Richter, for instance,
is known for having removed works known to be authentic from his own catalogue
raisonné and art historian Ambrogio Ceroni, whose book Amadeo Modigliani,
Peintre is considered to be the “Modigliani Bible” only included works he had
inspected himself and since he never travelled to the United States, did not consider
(authentic) works in US collections.823 In addition, a catalogue raisonné only gives
voice to its author’s opinion. But as experts frequently differ in opinion, multiple
experts can publish catalogues raisonnés on the same artist, leading to confusion and
dispute.824 The most telling example is perhaps the catalogue raisonné aimed at
listing Vincent van Gogh’s œuvre. The first edition, published in 1928 by Jacob
Baart de la Faille, listed 1716 works as authentic, but it quickly became apparent that
some of the works could not be from the hand of Van Gogh. In December 1928, de la
Faille published Les faux Van Gogh, an addendum in which he rejected about half a
dozen objects as fake, but in 1932, he changed his mind again and readmitted some
as genuine, only to condemn them as again as fake 20 years later.825 In 1996, Jan
Hulsker compiled yet another catalogue raisonné titled The New Complete Van
820
821
Nafziger (2010), p. 566.
822
Loll et al. (2015), p. 3.
823
Not only Gerhard Richter, but also Neo Rauch rejects works that were painted during his life in
the German Democratic Republic (GDR). For instance, the first work listed in Richter’s catalogue
raisonné is Tisch that was painted in 1962 in his studio in Düsseldorf. Dittmar (April 8, 2017).
824
Tromp (2010), p. 33. The œuvre of Rembrandt is another illustrative example: over a period of
roughly 90 years, the number of works attributed to Rembrandt fluctuated dramatically, without any
of the compilers bothering to account for their attributions or rejections (for instance, Smith (1836)
listed 620 works as genuine, Vosmaer (1868) 342, Hofstede de Groot (1915) 988 and Valentiner
(1921) 706). See Scallen (2004), pp. 211f.
825
Tromp (2010), p. 25. See also Ecksteins (2012), p. 192 and Nici (2015), p. 174.
3.7 The Catalogue Raisonné 235
Gogh, but likewise stresses in his introduction: “this does not mean that all works
reproduced here should be considered authentic”.826 On the other hand, there is the
trend of compiling catalogues raisonnés online: the foundations representing Roy
Lichtenstein and Alexander Calder have already made this shift.827 Shrugging off
the “yoke of the definitive”, these projects are presented as works in progress,
leaving room for amendments.
3.7.1 Liability in the Context of Catalogues Raisonnés
The situation for an expert publishing a catalogue raisonné is quite different from
that of an expert providing an opinion on authenticity by issuing a certificate of
authenticity or giving a respective statement to the same end. In the context of
catalogues raisonnés, there are two scenarios in which threats of liability can arise:
first, when a work of art is sold on the basis that it is included in the respective
catalogue raisonné, but its inclusion is later found out to be wrong,828 and second,
when an expert refuses to include a work in the catalogue raisonné because he deems
it inauthentic.829
The first scenario is a case of non-contractual liability as there is no contractual
relationship between the author and the subsequent purchaser. The author can rely
on his right to freedom of expression830 and can claim that a catalogue raisonné is a
purely academic compilation and does not aim to give a confirmation of authenticity
for transactional purposes.831 The lack of commercial character is thus used to
exclude an author’s liability, and while this reasoning is accepted by the French
courts, it is questionable whether other jurisdictions would follow suit. On the one
hand, the Anglo-US system would be reluctant to impose liability since a duty of
care is not likely to arise.832 On the other hand, the purpose of the catalogue
826
Jan Hulsker (1996).
827
For Lichtenstein see http://www.imageduplicator.com/, for Calder see http://www.calder.org/
work/by-category/work-on-paper [last visited March 30 2022].
828
Demarsin, Proefschrift (2008a), p. 113. Demarsin refers to this type of liability as “transactionele
aansprakelijkheid”. See further Demarsin, Handel in kunstvoorwerpen, p. 136.
829
Ibid. This is referred to as ‘redactionele aansprakelijkheid’.
830
Cf. the Metzinger case that was decided by the Cour de Cassation (Cour de Cassation, Case
No.12-35.264, judgment of 22 January 2014).
831
Cf. the claim for damages against Werner Spies in France (Cour d’appel de Versailles, Case
No. 13/06134, judgement of 3 December 2015). This line of reasoning is followed by the French
courts.
832
Following Caparo Industries v Dickman [1990] 2 A.C. 605, in order for a duty of care to arise, the
harm must not only be reasonably foreseeable (as established in Donoghue v Stevenson), but the
parties must also be in a relationship of proximity and it must be fair, just and reasonable to establish
liability.
raisonné has come to be equated with a statement on authenticity: authentic works

are included, inauthentic ones are excluded, or included in an appendix to the
compilation that lists known forgeries.833 Therefore, this approach should be
criticised since it offers authors the possibility to elude liability by insisting that
their publication is merely academic. The second scenario arises if an author refuses
to include an artwork in the catalogue raisonné, an act which negatively affects the
work’s financial value and damages the owner’s financial interests.834 In the Anglo-
US system, the author of a catalogue raisonné, just as the expert who gives a
statement on authenticity, can be sued for the torts of defamation, disparagement,
libel and slander.835 On the other hand, since a catalogue raisonné is always made
available to the general public, its author would receive protection under the First
Amendment with the consequence that a plaintiff needs to prove that the inclusion or
exclusion of an authentic or inauthentic work was done with actual malice. As
mentioned above, French courts take the position that the right to freedom of
expression is absolute and that authors cannot be compelled to include a work in
the catalogue raisonné.836 As regards the Netherlands, Dutch courts have consis-
tently stressed that authentication is not among their tasks and hence, that they do not
takes sides in authentication disputes.837 It can be assumed that the same consider-
ation is applicable to catalogues raisonnés as well.838
3.8 Can Authenticity Be Established in Courtrooms?
Yet another issue worth considering is whether judges and a jury would be well
equipped to rule on questions of authenticity in court proceedings. Especially since
an increasing number of authenticity-related disputes are being brought to court, this
question is gaining in importance. However, there seems to be a certain dichotomy
between examination methods and presentation of evidence employed by the juris-
diction and art market participants.839 This becomes particularly evident if a judge or
jury is asked to answer a question on which even eminent art experts often cannot
agree: is the artwork authentic or is it a fake? In an increasing number of cases, courts
have been confronted with such questions, involving high-value artworks whose
833
Cf. the appendix on Van Meegeren forgeries in Blankert (1980).
834
Most major dealers and auction houses would not accept a work that is not included in the
standard literature. This validates the statement that inclusion in a catalogue raisonné comes down
to a positive finding on authenticity.
835
Demarsin, Proefschrift (2008a), pp. 116ff, and Demarsin, Handel in kunstvoorwerpen, pp. 140ff.
836
Cf. Metzinger (Cour de Cassation, Case No.12-35.264, judgment of 22 January 2014).
837
Cf. Roubroucks v The Van Gogh Museum.
838
Spencer (2013), p. 4.
839
Bandle (2015), p. 380.
3.8 Can Authenticity Be Established in Courtrooms? 237
value is primarily dependent on a positive finding of authenticity.840 As a conse-

quence of this development, judges who usually have no comprehensive knowledge
about art and are not art experts, historians or scholars, are asked to mediate between
disappointed owners and experts who, based on their irreconcilable views on
authenticity, are unable to come to terms. Yet, the court’s judgment is not automat-
ically the last word in these disputes since there is a higher authority which can easily
overturn any judgment: the art market.841 Examples illustrating this are Greenberg
Gallery v. Bauman (the Calder case)842 and the 1929 dispute about the painting La
Belle Ferronnière.843
In the Calder case, the buyers of a Calder mobile, Rio Nero, claimed that the work
was a forgery. Klaus Perls, Calder’s American dealer for 20 years, insisted that the
work was a forgery, but the federal judge disagreed and held that it was “more likely
than not” that Rio Nero was not a forgery, but the original.844 The second case
concerns the painting La Belle Ferronnière, purportedly by Leonardo da Vinci, but
publicly called a copy by Joseph Duveen.845 As discussed before, the owners of the
painting sued Duveen, who eventually settled the case by paying $60,000 in an out-
of-court agreement.846 However, the settlement could not influence the market’s
doubt about the painting’s authenticity and hence, it remained unsold until 2010. It
was only then that it was attributed to the school or a follower of Leonardo da Vinci
and sold at Sotheby’s for $1.5 million.847 While this example shows that attributions
such as “school of” or “follower of” also have a commercial aspect as they allow
840
Cohen (August 5, 2012b).
841
Ibid. This was expressly acknowledged in Luxmoore - May v Messenger May Baverstock,
04EG115, 1 EGLR 11 (Q.B. 1989, Simon Brown, J.): “Is it really for this court to purport to
pronounce authoritatively whether these foxhounds are genuinely the work of Stubbs or mere
honest copies? I think not. On the contrary, it is I believe wholly unnecessary to arrive at a
judgement of my own on the point. That being so, I shall certainly refrain from doing so. What
could be more absurd than for me needlessly to offer my inexpert view upon the correctness or
otherwise incorrectness of the opinion of the acknowledged world expert? [. . .]
The price which the international art market was willing to pay was surely prima facie the best
evidence of the foxhound’s value. Is there anything to displace that prima facie conclusion? [. . .]
What governs the market value is the art world’s perception at a given point in time of a picture’s
provenance and attribution. [. . .]
Its [the argument’s] central fallacy lies again in the supposition that it is for this court now, rather
than the international art market then, to decide the authenticity and value of these foxhounds.”
842
Greenberg Gallery v. Bauman, 817 F.Supp. 167, 174–175 (D.C. 1993).
843
Brewer (2009), and Secrest (2004).
844
Greenberg Gallery v. Bauman, 817 F.Supp. 167, 174–175 (D.C. 1993). See also Spencer
(2004b), p. 189, and Merryman and Elsen (2002), pp. 1063ff.
845
Hahn v. Duveen 133 Misc. 871, 872, 234 N.Y.S. 185 (Sup. Ct. N.Y. Co. 1929). Ronald
D. Spencer, A Legal Decision in New York Gives Experts Protection for Their Opinions on
Authenticity, in Spencer (2004b), p. 217.
846
Ibid.
847
Ibid. Back in 1929, when the case was settled, the New York Evening Post commented on the
issue by stating: “How can anyone outside of a comic opera expect the authenticity of an old
painting to be settled by a lawsuit?”
otherwise anonymous works to be associated with the name of a famous artist,848 it

also raises the question whether courtrooms are indeed the right place to determine
the authenticity of artworks. According to Ronald D. Spencer, there is a disconnect
between the “culture of commerce”, in other words the art market, and the courts
representing the law, because:
[. . .] in civil litigation, the standard of proof is ‘more likely than not’. Now picture yourself
walking into a gallery and seeing a Picasso. You ask, ‘Did Picasso paint that?’ and the dealer
says, ‘Yes, more likely than not.’ You wouldn’t buy that.849
A second valuable example makes this disconnect even more visible: Joel Thome,
the owner of stage sets designed by Alexander Calder, requested the Calder Foun-
dation to authenticate the works to sell them.850 The Foundation refused to authen-
ticate the pieces and subsequently Thome requested the New York Supreme Court to
order the Foundation to issue an opinion. However, the court refused to do so and
Justice David B. Saxe expressly acknowledged that, in any event, case law will not
be able to provide a definitive determination on authenticity because the market will
have the last word and if the markets considers the works to be inauthentic, “his
[Thome’s] inability to sell the sets is a function of the marketplace”.851 What are the
factors that influence a judge’s decision? And how is the decision-making process
structured?
As noted earlier, there are three basic lines of enquiry central to the determination
of authenticity (provenance, connoisseurship and of scientific testing) and the courts
have acknowledged their importance. However, when connoisseurs disagree and
when provenance and scientific tests are of little help, judges look beyond these
standards to factors such as the degree of care and time spent by the expert in
analysing the work in question, the intensity of the visual examination, and to a
much higher degree than the art world, to the signature as primary means of
evidence.852 In this respect, Greenberg Gallery, Inc. v. Bauman is a telling example
of how the court considers these factors in detail. Regarding provenance, the seller
could establish a flawless history of the mobile: it had been sold by Klaus Perls,
reacquired by Perls shortly thereafter and sold to the buyers in whose house it had
hung until their death. Nevertheless, the plaintiff claimed that the authentic Rio Nero
has somewhere along the line been substituted with a fake.853 As regards the
848
McNulty (2006).
849
Spencer (2004b), p. 212. This statement is reminiscent of the wording in the Icomos Nara
Document on Authenticity (1994): Article 11 confirms that judgements of authenticity must be
“considered and judged within the cultural contexts to which they belong.” Hence, judgements on
authenticity must be primarily considered in an art historical and commercial context. As soon as
they are rendered in a legal context, such decisions and their relevance might easily become
distorted.
850
Thome v Alexander & Louisa Calder Found., 70 A.D.3d 88 890, N.Y.S.2d 16 [2009].
851
Ibid.
852
Spencer (2004b), p. 195.
853
Greenberg Gallery v. Bauman, at 173.
connoisseurship evidence, Klaus Perls, who was Calder’s exclusive American dealer
for more than 20 years and a recognised expert, considered the mobile to be a
forgery, based on “knowledge and feelings” that he acquired from his vast experi-
ence as a dealer. In essence, he testified that the mobile did not “fit in the feel of a real
Calder”.854 This conclusion was reached by comparing the mobile against an
archival photograph he had made before the mobile left his gallery. However, the
court found fault with how Perls, however expert he may have been, reached his
conclusion since he had examined the mobile for a maximum of 10 min and limited
his examination to comparing a few of the blades to the archival photograph.855
Moreover, the court mocked the fact that he “conspicuously did not address the
signature”.856
For the seller, Linda Silverman, an art dealer and auction house specialist,
testified that the work was authentic and the court was more impressed by the care
and time taken for her examination: she examined the mobile for an hour and a half
and checked each and every blade.857 However, the court gave most weight to her
observation that the signature was “absolutely accurate”.858 Despite Perl’s vastly
superior credentials, the judge rejected his judgement based on the fact that that he
had only spent a few minutes to examine the mobile and failed to address the
signature. Therefore, the court concluded that the mobile is “not a forgery, but the
original Rio Nero, which has been misassembled [. . .] to the point that it does not
exactly resemble the original photo and has lost its delicate balance required for
proper hanging”.859 This decision was upheld on appeal, notwithstanding a state-
ment submitted by the Calder Foundation stating that the blades were not the proper
gauge, that the wire was soft steel and that the signature relied on so heavily, showed
markings clearly not made by Calder’s tools.860 This case illustrates that the court
will not necessarily defer to the opinion of the expert with the greatest knowledge,
experience and reputation, but instead, may give much weight to the methodology
and the time and care spent on the examination. Hence, unlike the art market, courts
do not seem to place much more trust in experts with the better qualifications.861
Instead, it is their methodology which is decisive, and experts are best advised to
articulate their opinion convincingly by basing it on facts whose accuracy can be
established to the court’s satisfaction. Even though there is no guidance on the
854
Ibid. at 170.
855
Ibid. at 170.
856
Ibid. at 174.
857
Ibid.
858
Ibid. For the court, signatures (and handwriting in general) are comparable to fingerprints which,
in turn, are evaluated according to established objective tests.
859
Ibid. at 175.
860
Danziger (2014).
861
Courts fail to realise that the art market gives more weight to the name and reputation of an
expert than to procedural methods of examination. As a result, the market may ignore a court
judgment altogether.
probative force of the different authentication tools, this case demonstrates that
certain types of evidence have a higher probative value than others.862 Moreover,
irrespective of the market’s determination, the court considered the presence of a
signature to be an important factor. On the other hand, the dispute exemplifies that
the art market requires more evidence of authenticity than “more likely than not” and
that it cannot be compelled to follow a court’s decision. In the case of Rio Nero, the
judgment was basically of no avail for the owner: with Perls’s statements in mind,
the market continued to doubt the work’s authenticity and hence, the mobile could
never be sold again. Meanwhile, judges seem to accept that authentication is a highly
complex process and might go beyond their competence. While they recognise the
importance of expert opinion, they do not question its factual content, but rather
evaluate the documentation and evidence supporting this decision to ensure that the
opinion is not illogical, unreliable or unsupported.863
In conclusion, it can be established that a disconnect between art scholars and
judges was manifested in the lawsuits discussed. There continues to be an intrinsic
conflict between the subjectivity of the expert’s connoisseurship and the objectivity
of the law which demands clear and compelling evidence.864 This is due to the fact
that experts and the market have developed specific authentication practices that are
evidently different from those prevailing in a courtroom.865 In most cases, fact-
finders struggle to understand and evaluate the expert’s aesthetic analyses.866
Already in Hahn v Duveen, the question whether Leonardo da Vinci was indeed
the creator of the defendant’s painting became a “battle of experts”.867 Courts are
bound by procedural and evidence rules, as well as by provisions on the burden of
proof and the presentation of evidence; expert authority, on the contrary, is not
subject to any regulation with regard to form and content. In particular, the three
basic lines of enquiry in matters of authentication represent difficulties since courts
might give a different weight to these factors than the art market. First and foremost,
provenance helps to trace an artwork back to the artist but does not exclude the
possibility that it might have been substituted, damaged, repainted, over painted or
badly restored in the course of time, notwithstanding the fact that provenance itself
can also be falsified and invented. The creation of the Sammlung Werner Jägers in
the Beltracchi case is the prime example. As mentioned before, the forgers even
staged photographs with Helene Beltracchi posing as her grandmother to illustrate
and validate the origin of their collection. In the same context, the absence of
862
Bandle (2015), p. 388.
863
Ibid. In Hatfield v. Child (2013 O.N.S.C. 7801, Div. Ct. No. 209/13, 17 December 2013) the
judge expressly dismissed an expert’s evidence on the authenticity of a painting because it lacked
support and reliability (para. 18). Cf. Roubroucks v The Van Gogh Museum where the situation was
the exact opposite and where the evidence and reasoning given were considered grounds for
reasonable behaviour.
864
Spencer (2004b), p. vx.
865
Bandle (2015), p. 390.
866
867
Ibid.
provenance that characterised the paintings sold by Knoedler Gallery should have
been considered a red flag that made further research and examination more than
necessary. Regarding connoisseurship, this method of examination is difficult to
understand for laypersons as well as for judges. However, up until now, most
decisions are still based on visual inspection by a knowing eye. As exemplified by
the Rio Nero case, the court favours and gives more weight to examinations that are
conducted thoroughly and carefully. It is particularly important that the expert in
question gives reasons and explains how he arrived at his conclusion: it is essential
that he communicates his observations to the court in a clear manner. The standard
method of just stating that the given artwork “does not feel right” is therefore not
likely to convince a court, irrespective the expert’s credentials and reputation.868
Lastly, while scientific methods are considered as providing more objective
criteria in matters of authentication and attribution, those methods are restricted by
the major shortcoming that they cannot positively prove authenticity. This means
that while the techniques can expose recent fakes and later imitations, they cannot
help to distinguish artworks that were created during an artist’s lifetime or with
authentic materials. In these cases, the methodological emphasis shifts again to
connoisseurship: this was the case with Rotes Bild mit Pferden, where scientific
analysis revealed a dubious pigment in the paint’s composition but left the ultimate
conclusion to art experts and historians.869 Strikingly, courts consider the signature
as indicative, if not determinative, of authenticity, irrespective of experts’ conviction
that signatures are unreliable evidence and no presumption of authenticity. However,
in the Rio Nero case, the court even compared the presumed authentic signature to
fingerprints which are found at the scene of a crime.870 This has to do with the fact
that a signature creates a presumption of authorship; i.e. it is presumed that the signee
is in fact also the author or creator of an artwork.871 Drawing conclusions from these
findings, it becomes clear that courts look for a systematic application of connois-
seurship and expertise. This means that if an expert makes subjective assumptions
about brushwork, he must be able to communicate this in an objective and verifiable
way, which a court can understand, and perhaps, even observe. Experts must be
aware that a court considers the time and care spent in making a visual examination
868
Cf. the very brief examination executed by Klaus Perls in the Calder case which the court
considered to be less convincing than the more thorough assessment of Linda Silverman. Hence,
every expert should devote a substantial amount of time to the viewing and examination process
even if his experience and familiarity with an artist’s œuvre would allow for such a determination to
be made in a glance. This entails that signatures must also be addressed since courts place
substantial weight on their evaluation.
869
Sontheimer (December 3, 2010).
870
Spencer (2004b), p. 205. But in in contrast to fingerprints, a signature can be learned and copied
to imitate the original.
871
Schack (2017) in Weller et al. (eds) (2017), p. 9. Cf. the German “Urheberschaftsvermutung”
resulting from §101 UrhG. However, for the art market, this perception does not apply. In fact, the
fact that a signature can be faked or added in order to enhance the value of an artwork is always
taken into account.
of essential importance, as well as the question whether the expert examined the
artwork in person or merely relied on photographs. Hence, experts must take a more
systematic and careful approach to the authentication process and ensure that their
subjective judgement is supported by a rational and physical analysis of the art object
concerned.872 In addition, art experts and lawyers each use their distinctive language
and verbal strategies. Lawyers are trained to convince the court that the opposing
party’s case is not strong enough.
On the other hand, art scholars focus on the analysed object and not on strategic
ideas of how to convince the court why their reasoning should prevail.873 Further-
more, courts establish authenticity with a predominant degree of probability,
whereas experts always make a clear statement. However, the market considers
attribution made with a predominant degree of probability to be insufficient and
hence, may disregard a court’s determination. Another factor causing this disconnect
is the fact that court judgments are final; doctrines such as res judicata and collateral
estoppel hinder cases being re-opened. These procedural constraints conflict with the
uncertainty of attributions and authentication which are subject to potential
changes.874 Hence, courts are unable to correct a decision when or if scholarly
opinion shifts. Finally, the application of procedural rules is said to always favour
the defendant since plaintiffs in an art context are usually not able to meet the
required burden of proof.875 This is because claims of fraud and mistake, as well as
the specific common law torts of defamation and disparagement, require proof of
falsity: the defendant must demonstrate that the respective artwork is in fact authen-
tic or inauthentic. Given the complexities of such a determination, it becomes clear
why plaintiffs are placed in a very difficult position. Besides being constrained by
rules on burden of proof, courts are also governed by a set of rules that preclude the
introduction of new evidence once a case has been decided.876 As a consequence, the
technical rules of courts are considered to be “at odds with the realities and
necessities of the art world” and increasingly, courts refrain from seeking to establish
an object’s accurate attribution and instead assess the degree of care and skill
presented by an expert’s diligence.877
872
Spencer (2004b), p. xvi.
873
Ibid. p. 391.
874
Butt (2004–2005), p. 74.
875
Ibid. p. 75.
876
Ibid. p. 78.
877
Ibid. Cf. the judgments in Lempertz v Trasteco and Roubroucks v The Van Gogh Museum which
validate this assertion.
References 243
3.9 Towards Increased Transparency and Regulation
The discussion of authentication standards above demonstrates that these proce-

dures, at least in their current state, do not function properly. The reception of new
information is critical to scholarly progress and to an efficient functioning of the art
market. However, as the last section outlined, courts and their procedural rules are
not well equipped to answer questions on authenticity and are best advised to defer
such decisions to the market, experts, or competent organisations. On the other hand,
the present state of affairs in the art world is described as one in which it is virtually
impossible to openly evaluate the authenticity of artworks and in which the informed
opinion of experts is no longer respected and protected.878 The underlying reasons
are generated by: a new breed of litigious investor-collectors who seek to protect
their investment by suing experts and organisations for any dissenting opinion on
authenticity; a growing lack of confidence in seemingly subjective expert opinion;
and a parallel lack of consistent procedures for applying expertise.879 Consequently,
connoisseurs’ expertise is considered to be “compromised, if not outright
destroyed”.880
Contributing substantially to this situation is the fact that there is no formalised
authentication system that could be acknowledged by all participants as comprehen-
sible and accountable, coupled with the endemic secrecy and anonymity of market
players. However, it is fundamental to the art world’s credibility that there is trust in
the authentication process: this is not only essential for the functioning of its
economy, but also for the integrity of culture and heritage.881 How can we arrive
at systematic procedures and methods for experts to follow, which will at the same
time stand up to legal challenge? Several authors advocate for a change coming from
within the market: scholars and experts are advised to standardise due diligence in
authentication matters by adhering strictly to practical and ethical guidelines which
encourage scholarly discourse and improve experts’ standing in all dimensions that
authenticity disputes can bring about.882 Therefore, the next chapters will look at
these proposals and new initiatives and assess whether they are capable of bringing
the desired changes to the market.
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O’Connor (2004), p. 6.
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Ibid. p. 16.
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Ibid. p. 24.
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Chapter 4
Remedies: Regulation and New Initiatives
4.1 Future Perspectives: Reform and Increased Regulation
As noted at several stages during this discussion, the art market is often described as
one of the last unregulated markets whose structures have not changed much in the
last 200 years. On the other hand, it has been stressed that, in fact, there is an entire
body of rules applicable to the market that vary from country to country and the only
instance truly missing is a supervisory body such as the Security and Exchange
Commission in the United States or the Financial Conduct Authority in the United
Kingdom overseeing its overall operation. It is an indisputable fact that the market’s
famous culture of confidentiality and opacity has consequences for its operation in
the twenty-first century: the art trade is no longer reserved to a tiny elite of collectors
but has evolved into a market worth more than $60 billion that attracts global buyers,
whether investors or collectors, who are not necessarily sophisticated and wary.
Moreover, with the advent of technology, internationalisation and the closer
alignment of the art and finance industries, the opportunity for wrongdoing and the
consequences are greater than ever before. The emergence of art funds can be seen as
a prime example of how a new industry was shaped out of the idea that art can be
traded as a commodity. However, the art market’s peculiarities, such as lack of
transparency and ambiguous authentication and valuation processes, undermine its
trust- and credibility-based system to a great extent. It was suggested that private
institutional investors would be capable of having a positive influence on these
matters as the development of art as a formal asset class has brought about consid-
erable academic research and reflections on how to transform the market into a more
economically efficient sector. In particular, investors’ demand for increased trans-
parency was considered to be the impetus that would lead to increased regulation,
and the existence of art investment funds, as proper investment vehicles, was
regarded as an important factor in the process of transforming the art market into a
structured industry with more clarity and transparency.
256 4 Remedies: Regulation and New Initiatives
Yet, reality seems to prove these suggestions wrong: instead of bringing more
transparency and regulatory structures to the art market, the overall art funds market
is in decline: from $2.13 billion at its peak in 2012, the market was estimated at about
$1.20 billion in 2015.1 And strikingly, it is argued that the art investment market
would potentially actually grow into becoming an “unregulated shadow market”
itself, thereby further undermining market transparency and increasing speculation.2
This development is due to the cost and complexity of setting up art investment
funds which force the industry to look at “lighter, more cost-efficient structures,
operating largely under the radar of financial regulators”.3 It can therefore be
concluded that, instead of bringing more transparency and regulation to the art
industry, traditional structures have prevailed and have driven institutional investors
out of the market again. In addition, the case studies discussed also seem to validate
the assertion that these structures are increasingly in need of improvement: the
involvement of major institutions in several fraud and forgery cases challenged the
market’s trust and confidence and put the reliability of established practices into
question. After all, the art market requires accurate and efficient processes to
function properly: but ranging from a freeze in art scholarship, to market players
fulfilling multiple roles—which in other markets would be deemed to create unac-
ceptable conflicts of interest—it becomes obvious why regulation is increasingly
advocated. As will be elaborated in the following section, for a market to be efficient,
it must be transparent, and in such a market, the concepts of trust and transparency
are substitutes.
However, if the level of transparency is low, additional trust will be sought and
the two become complementary. It is precisely a high level of trust which
characterises the art market and with specific occurrences threatening its legitimacy,
hampers its proper functioning.4 Before proceeding with the topic of regulation and
an examination of new initiatives and suggested proposals for reform, it is important
to briefly scrutinise the art market’s characteristics from a purely economic perspec-
tive. In particular, the peculiarities and working methods analysed have led to what is
described as “economic inefficiency” which surprisingly, is accepted by market
participants as drawbacks of this system. This, of course, also affects the success
of any remedy suggested and offers a possible explanation for the market’s reluc-
tance to implement new structures.
1
Deloitte (2016), p. 111.
2
Ibid. p. 112.
3
Ibid.
4
Shortland and Shortland (2020), p. 171.
4.2 The Status Quo of the Art Market: Inefficiency as Prevalent Business Culture 257
4.2 The Status Quo of the Art Market: Inefficiency

as Prevalent Business Culture
It has been argued that the art business is characterised by certain imperfections
which obstruct even relative market efficiency. In general, risks and uncertainties are
key elements of financial markets.5 The uncertainty of future movements in asset
prices is essentially what drives trading on financial markets. Differences in subjec-
tive opinion about these expectations manifest themselves in a continual change in
the demand for and supply of the respective product.6 As a result, trading requires
that individuals’ beliefs about expected future value are heterogeneous.
To form these beliefs, information—and transparency—are of essential impor-
tance. Generally, transparency is defined as the state of a functional market “when
much is known by many”.7 Hence, for a market to be transparent, all prices and
supply information must be publicly available.8 Inevitably, any discussion about
market transparency is linked to the concept of information asymmetry, i.e. the
vendor knowing more than the purchaser. Since transparency demands full disclo-
sure of information, any asymmetry naturally undermines the degree of transparency
in the market.9 It is therefore concluded that higher transparency and a correspond-
ingly lower level of information asymmetry can only be achieved if some form of
regulation or legislation requires full disclosure of all relevant information.10 Ideally,
all market players would be expected to join efforts in correcting the imperfections
mentioned above in the art market and approving regulation in order to ensure fair
and transparent transactions. In other words, in efficient markets, regulation and calls
for regulation usually come from within.11
5
For a discussion of risk in general see Leach (2004), pp. 295ff.
6
Pownall (2016), p. 26.
7
See the general discussion of transparency in Lin (2018). In particular, the art market does not
conform to the efficient Market Hypothesis as it is an “asymmetrical place in which prices fail to
reflect all published and unpublished data.” Moreover, the assumptions that prices adjust to
available information or that indices are able to capture all economic activity do not apply.
Therefore, art professionals can “rip off” even astute collectors because of their knowledge
advantage. The fact that clients return to these dealers confirms that they are oblivious to their
knowledge advantage. See Robertson (2016), p. 231.
8
Pownall (2016), p. 7. Usually, traders evaluate prices using the financial information available to
them at the time. Classical economic theory describes this decision-making in line with the
“reasoned economic man” where it is reasonable to only take information that the market values
into consideration when pricing assets.
9
Leach (2004), pp. 295 f.
10
Robertson (2016), p. 231. For instance, financial markets are regulated by the Market Abuse
Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on
market abuse, (MAR) which stipulates that insider information must be immediately made public to
avoid knowledge asymmetries and insider dealing.
11
Pownall (2016), p. 12. According to the disciplines of free markets economics, external inter-
vention will occur if the market fails to allocate resources efficiently.
However, from this perspective, Gregory Day, Associate at Morris, Nichols,

Arsht & Tunnell LLP, characterises the art market as an “economic puzzle”: while
economic theory suggests that markets work efficiently in order to produce social
wealth, with participants preferring remedial measures over an inefficient status quo,
this theory does not seem to apply to the art market.12 Instead, the art market faces
several market failures (from forgeries and fraud to the accusation of being a tool for
tax evasion and money laundering) but continues to rely on its traditional business
practices, thereby rejecting attempts to remedy its obvious inefficiencies.
Participants still rely on the concept of trust on both the demand and the supply
side and considering the recent revelations, this brings up the question if such
reliance can still be justified or if market participants should insist on more diligence
in future transactions. In line with this, Leach agrees that asymmetric information
leads to economic inefficiency.13 Employing the telling example of Otto Wacker and
the Van Gogh forgeries, Leach argues that not the sale of forgeries itself constitutes
the inefficiency, but the subsequent reallocation of resources. Put simply, forgery is
considered to be an industry of its own that draws resources from other industries.
This leads market participants to take precautions against buying forged art and
hence, scarce resources are devoted to separating the fake from the real.14 All
activities devoted to determining authenticity and authorship are carried out by
skilled people who, were it not for the possibility of forgery, could be employed in
more productive work. In addition, investigations and lawsuits against forgers also
expend scarce resources. Moreover, asymmetry of information gives rise to moral
hazards: it allows people to alter their behaviour in ways that are detrimental to
society, with fraud being the most extreme example.15 Usually, reliable product
information lies at the heart of every efficient market and yet, the nature of the art
market still allows participants “to withhold or conceal important market informa-
tion”, depriving prospective buyers of the possibility to objectively assess a work’s
value and evaluate the benefits of a transaction.16
As a result, insider information is key and it is precisely the insider who
ultimately yields power in the market and benefits from price fixing and collusion.17
According to Day, the economics of art produce a unique scenario: because many art
buyers expect their purchases to appreciate in value, they expect to resell the work at
a higher price—thus, purchasers automatically see themselves as a potential seller at
some point in the future and hence, do not mind the market having information
asymmetry that generally favours sellers. The art industry is therefore said to
“actively suppress reliable information” about its products; a practice that is ignored,
12
Day (2014b), p. 457.
13
Leach (2004), p. 290.
14
Ibid.
15
Ibid.
16
Day (2014b), p. 457.
17
if not supported by, the governing legal regime.18 To name a few examples, art
dealers are able to withhold the most basic information in transactions: the price of
an artwork (and if known, is it really feasible to discern whether the asking price is
reasonable?), the title to an artwork (as anonymity is a key feature of art transactions,
prospective buyers often do not know who the former owner is, let alone if the
respective artwork was owned free of title defects) and its availability (even if an
artwork is displayed at a gallery exhibition or at a fair, this does not necessarily entail
that the dealer is willing to sell to the first person who expresses an interest).
The complexity of price determination has already been discussed before, but it
can briefly be recalled that auctions are the only way of transfer of ownership that
gives a public insight into prices. On the contrary, a dealer representing an emerging
contemporary artist, with little information available about the average value of that
artist’s works can avoid public sales and is basically free in his determination of
gallery prices.19 This means that even the most diligent art consumer might be
unable to gather sufficient reliable information to assess whether a transaction is
economically reasonable—irrespective of aesthetic and social considerations. And
given that major institutions such as Knoedler Gallery, Christie’s and world-famous
museums were duped by Beltracchi, Rosales and others, which transaction can ever
rise above scrutiny?20
Despite these flaws and notwithstanding the recent Beltracchi and Knoedler
debacles, there have been few incentives to bring increased transparency and
regulation to the art market. Instead, consumers continue to invest substantial
amounts of money in art: globalisation as well as the increased demand at the
high-end of the Western market caused the art market to grow by 212 percent over
the last decade.21 So why does the market failure continue to persist even though
participants would have both the power and the ability to demand more efficiency?
According to economic theory, market efficiency is defined not only in terms of
transparency but also as “a condition in which goods sell at a price incorporating all
available information”.22 Thus, knowledge is of crucial importance: the fact that a
buyer and a seller reach an agreement does not automatically lead to the conclusion
that the market functions efficiently since either could have been misinformed or
lacked relevant information. As noted earlier, three principal questions arise in art
transactions: first, whether an artwork’s asking price equals its market value, second,
whether it is authentic, and third, whether anyone else may claim title to
it. Strikingly, however, the art industry is often not able to answer these basic
18
Ibid. p. 459.
19
Interview with Franklin Feldman, former Chairman of The International Foundation of Art
Research’s Law Advisory Council, in Day (2014b), p. 460. See also Dornbusch Horowitz
(2014), p. 338.
20
Ibid. p. 461.
21
Artprice (2015), p. 1.
See also Graham, in Vadi and Schneider (2014), p. 319.
22
Day (2014b), p. 462.
questions to full satisfaction. Instead, the market’s discretionary and anonymous

nature are said to actively conceal information about these qualities, driving the
market into a state of market failure.23 Moreover, a part of the art market is described
as an informal market: the term informal refers to transactions that are unrecorded,
untaxed, unregulated, but not explicitly illegal and this informal economy is said to
transform parts of the art market into a grey market.24 This hidden and marginal
aspect of the market is made possible by offshore areas that allow for tax-free and
anonymous storage and backs the impression that artworks are assets which can be
secreted away from regulatory structures. In sum, the art market is considered to be a
free, but modified market that unevenly distributes information and transactions
resulting in advantages for insiders. According to Velthuis, this has the far-reaching
consequence that the contemporary art market serves itself more efficiently by not
being a free market open to the highest bidder.25 This paradox coincides with the
corresponding roles of trust and social relationships in the art market: instead of
impeding efficiency, social relationships are instrumental in enhancing efficiency,
with social relationships being at the core of the contemporary market’s functioning.
4.2.1 Prices and Valuation
While the complex topic of valuation has been extensively discussed in the second
chapter, the conclusions reached also have an influence on the market’s efficiency.
While a fair market price usually incorporates all relevant information, this is not
feasible as regards artworks. To begin with, traditional commodities are utilitarian
with an inherent value that is, among others, based on their component parts and
since they are sold in bulk through a large number of dealers, enable consumers to
compare prices.26 Artworks, however, are unique, with little or no inherent value and
the primary market for works by living artists is relatively small: although dealers
operate public galleries, their business is still conducted privately and confidentially.
This culture of secrecy makes it a taboo for buyers to ask about a work’s prior
owners or to discuss prices.
As a result of this business culture, consumers encounter many difficulties when
trying to appraise artworks and must rely on experts’ judgement. In fact, a work’s
estimated value is a “black box” in which the process used to appraise its value is
largely unknown to the consumer. As usual, the interests of buyers and sellers
diverge with buyers wanting to pay the lowest possible price, and a seller seeking
the opposite. In this respect, it is a major concern that dealers often represent both a
seller and a buyer. After all, a dealer representing the seller has fewer incentives to
23
Ibid.
24
Zarobell (2017), pp. 244ff.
25
Velthuis (2005), p. 60.
26
Day (2014b), p. 463.
discover and disclose defects in a work’s title or authenticity, thereby violating his
obligations to a buyer. This dynamic gained notoriety in the lawsuit against Larry
Gagosian, who was alleged to have represented both the seller and the buyer’s side;
inflating prices or undervaluing a work, depending on his stake in the transaction.
Therefore, a part of the market’s inefficiency in this respect stems from the fact that
dealers have access to most of the information available but profit from “either
withholding or obfuscating it”.27
4.2.2 Authentication and the Law
As discussed before, any investigation into an artwork’s authenticity is difficult and

costly, as purchasers must to a great degree rely on the expertise of external experts
and appraisers. This process is further hindered by the legal liability threatening
those who are still brave enough to offer their opinion on authenticity. Hence, the
problems in the realm of authentication and attribution are considered to further
diminish the market’s efficiency.28 This is confirmed by journalist Stefan Koldehoff
who considers it questionable that the art world still relies on the judgement of single
experts.29 The case of Werner Spies and Wolfgang Beltracchi has shown that the
reliance on stylistic analysis and archival documentation is no longer sufficient in
view of forgers’ apparent capabilities. Beyond this, art experts have a unique ability
to harm the market value of another person’s property: usually, many other experts
could be consulted to offer competing opinions, but the art market with its focus on a
single authority relies on decisions expressed by established experts only.30
Moreover, from a legal perspective, the peculiarities of the authentication process
raise important issues. First, a buyer who learns that the purchased work is a forgery
can claim breach of warranty or fraud against the seller. As mentioned before, the
primary problem associated with breach of warranty claims is that on the secondary
art market for instance, auction houses generally limit their warranty on authenticity
to a period of 5 years.31 This means that if inauthenticity is detected or authenticity is
disputed at a later stage, the disappointed seller cannot easily resort to a claim for
breach of warranty. In general, to successfully initiate a fraud claim, the plaintiff
must prove that the seller acted with the intent to obtain a material benefit by causing
or maintaining an error by pretending false facts or by distorting or suppressing true
facts. In the US, where many of such fraud cases arise, the plaintiff must show that
27
Ibid. p. 468. It is suggested that the amount which buyers spend on research costs could instead be
invested in other purchases or industries. In this respect, the high transaction costs associated with
art transactions are seen as another market inefficiency.
28
Ibid. p. 483; and Orenstein (2005), p. 922.
29
Stefan Koldehoff interviewed by Milko den Leeuw, Authentication in Art, April 2017.
30
31
See Christie’s, Conditions of Sale: Buying at Christie’s, section E (2) Our Authenticity Warranty.
the seller of an inauthentic artwork either knew or should have known about the
concern about authenticity, that this was material to the transaction, and that he
suffered damage as a result.32 While these conditions seem to be straightforward in
their application, the discussion so far has demonstrated that the element of falsity,
which is a precondition for establishing fraud, can be very difficult to prove. In the
US case Krahmer v Christie’s, for instance, the auction house was sued for fraud
following the buyer’s post-sale discovery that the painting was not authentic.33 The
buyer had asked Christie’s to rescind the 1986 sale which the auction house denied,
reasoning that their warranty of authenticity on the painting, which lasted for 6 years,
had long expired. Hence, Krahmer also sued for rescission on a theory of negligent
misrepresentation, claiming that Christie’s had intentionally misrepresented the
painting’s authenticity.34 Christie’s argued that the Krahmers’ claims of negligent
misrepresentation and equitable fraud were time-barred by a three-year statute of
limitations.35
As regards the applicable statute of limitations, there was agreement between the
parties that the applicable statute imposed a three-year period for claims of negligent
misrepresentation and equitable fraud.36 Under this Section,37 a cause of action
accrues at the time of the wrongful act. Consequently, the Krahmers’ cause of action
arose in 1986 at the time of purchase when Christie’s allegedly injured the Krahmers
by misrepresenting the painting’s authenticity. Since the claims were filed 18 years
later, their action was time-barred unless they could demonstrate that the statute of
limitations period should be tolled.38 The Krahmers argued that the “inherently
unknowable injury” doctrine applied and that the time of discovery rule tolls the
statute of limitations for these claims until 2002, the year when they tried to resell the
respective painting and were told by Sotheby’s that it may not be authentic.39
However, the court stated that a prudent buyer can safeguard his or her investment
immediately after a purchase by verifying its authenticity with an independent
32
Ibid. p. 480. See for instance Foxley v. Sotheby’s Inc., 893 F. Supp. 1224, 1228 (S.D.N.Y. 1995).
33
Krahmer v. Christie’s Inc., 903 A.2d 773, 781 (Del. Ch. 2006).
34
Ibid. at 777.
35
Ibid. at 778.
36
Ibid. See 10 Del. C. ß 8106.
37
Ibid.
38
Ibid. These tolling exceptions include the doctrines of: (1) fraudulent concealment, (2) inherent
unknowable injury, and (3) equitable tolling and permit tolling of the limitation period where the
facts on which a claim is based were so hidden that a reasonable plaintiff could not timely discover
them. If one of these exceptions apply, the statute will begin “to run only upon the discovery of facts
constituting the basis of the cause of action or the existence of facts sufficient to put a person of
ordinary intelligence and prudence on inquiry which, if pursued, would lead to the discovery [of the
injury]”.
See Wal-Mart Stores, 860 A.2d 312 (2004) at 319; Dean Witter, C.A. No. 14816, 1998 WL
442456; and Certainteed Corp. v. Celotex Corp., 2005 WL 217032 (Del. Ch. Jan. 24, 2005).
39
Krahmer v. Christie’s Inc., at 779.
third-party appraisal.40 In this case, the plaintiff stressed an issue which is very
important in art transactions: namely, that it is common that questions of authenticity
usually do not arise after until some future date. Once a work of art is purchased, the
purchaser will seldom engage in a rigorous authenticity examination. It is often not
until the next sale that authenticity becomes a concern, and this may well be many
years after the initial purchase. In this context, the court’s point of view that
authenticity can easily be established by a third-party appraisal seems to neglect
the complexities associated with authentication and attribution. Rosen v
Spanierman41 is another case which is instructive on the inauthenticity of artworks
and the statute of limitations. Similar to the situation in Krahmer v Christie’s, the
plaintiff purchased a painting that the gallery had expressly warranted as an authentic
work by John Singer Sargent and for which the gallery even provided five appraisals
over the subsequent years. The plaintiff tried to sell the painting at Christie’s
19 years later, but according to the auction house, the work was not authentic.
Therefore, the owner filed a suit against the gallery for breach of warranty of
authenticity, common law fraud, negligent misrepresentation and professional neg-
ligence. As regards the breach of warranty claims, the gallery argued that the claims
were brought untimely since New York’s Uniform Commercial Code (UCC) pro-
vides for a four-year limitations period for an action for breach of contract.42 The
court agreed and held that the plaintiff’s breach of warranty claims accrued when the
painting was purchased and not when they learned of the painting’s inauthenticity.43
Interestingly, the decision was again based on the reasoning that such a defect is
discoverable immediately after the purchase through the trained eye of an art expert.
Moreover, the court concluded that it is not unreasonable to expect a purchaser of
valuable art to obtain a second opinion on authenticity and to require a purchaser to
“obtain that appraisal from an expert other than the seller is not an onerous bur-
den.”.44 As a result, the court held that the discovery exception contained in
Section 2-725 (2) UCC was not applicable and that the breach of warranty claims
were untimely.45 Although this case was decided in the context of a breach of
warranty claim under the UCC’s statute of limitations, it confirms the court’s attitude
which considers the authenticity of a painting to be a readily discoverable and not an
40
Ibid. at 781.
41
Rosen v Spanierman, 894 F.2d 28 (2d Cir.1990).
42
Section 2-725 UCC provides that (1) An action for breach of any contract for sale must be
commenced within 4 years after the cause of action has accrued. By the original agreement the
parties may reduce the period od limitation to not less than 1 year but may not extend it. (2) A cause
of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of
the breach. A breach of warranty occurs when tender of delivery is made, except that where a
warranty explicitly extends to future performance of the goods and discovery of the breach must
await the time of such performance the cause of action accrues when the breach is or should have
been discovered.
43
Rosen v Spanierman, at 32 and 36.
44
Ibid.
45
Ibid. at 33.
“inherently unknowable injury” for purposes of the discovery rule.46 In addition, the
court found that the five appraisals which the gallery subsequently provided
contained no warranties, were completely separate transactions from the sale of
the painting, and did not form a special relationship necessary to maintain a
negligent misrepresentation claim.47 Since the relationship between a buyer and an
auction house as seller is contractual in nature and insufficient to sustain a cause of
action for negligent misrepresentation, the court granted the defendant’s motion for
summary judgment on the plaintiff’s negligent misrepresentation claim.48
By adopting this approach, the court sought to encourage buyers to verify their
artwork’s authenticity quickly. However, this practice overlooks the prevailing
conditions in authentication contexts and the general understanding that determina-
tions on authenticity are opinions which are always subject to “momentariness” and
processes of self-correction: with the possibility of new information and insights
coming to light, an initial opinion might have to be re-assessed at a later point in
time.49 Similarly, in Krahmer, the court concluded that the Krahmers did not satisfy
the discovery rule to toll the time for their claims and hence, could not bring a claim
for rescission based on a theory of negligence years after the expiration of both the
applicable statute of limitations and Christie’s express warranty of authenticity. As
regards the claim for negligent misrepresentation, the court did not find that a special
relationship existed between the Krahmers and Christie’s. Instead, the court stressed
that Christie’s was an intermediary in the sale who acted as a fiduciary to the
consignor and owed a duty only to him.50 This was also stated in Rosen v
Spanierman, confirming that the relationship between an auction house and a
buyer is of contractual nature with the result that there is no fiduciary or special
relationship.51 While the statutes of limitation differ according to the jurisdiction
concerned, the US cases at hand illustrate the complexities which an aggrieved
purchaser faces when he learns about the inauthenticity of an artwork. Especially
regarding the aforementioned facts that authentication is not as straightforward and
simple as articulated by the courts and that concerns about authenticity often arise
many years after a purchase, the fact that limitation periods begin to run at the time of
the sale is not in favour of aggrieved parties. Moreover, the court decisions do not
seem to do justice to the possibility that there are conflicting views on authenticity.
This is problematic since it is not uncommon that the trained eyes of art experts do
not always arrive at corresponding conclusions regarding an artwork’s authenticity
46
Ibid.
47
Usually, tort theories require heightened duties of care on part of the seller. If such a duty or
special relationship does not exist, a knowledge or scienter element must be met.
48
Rosen v Spanierman, at 33.
49
Eugene Victor Thaw interviewed by Ronald D. Spencer, in Spencer (2004), p. 71. Authentication
and attribution decisions are also considered to be in the “realm of intellectual speculation”. See
Bandle (2016), p. 42.
50
Ibid. at 781.
51
Krahmer v. Christie’s Inc., at 784.
or attribution. It is therefore argued that “the current legal regime has neglected to
account for the unique qualities of art and the history of its trade” and this also holds
true with regard to title: while the law provides for certain warranties, shielding
clients from liability if they purchase new works from reputable dealers, it fails to
take into account that the majority of artworks are sold on the secondary market and
that these transactions involve high levels of risk, stemming from authenticity
concerns and gaps in title or provenance.52 Therefore, legal regimes seem to
presuppose conditions “that almost never exist [. . .] and because buyers and sellers
cannot adjust their behaviour to what the law demands, they have instead increased
secrecy and other undesirable behaviours that contribute to market failures”.53
Usually, efficient markets seek to maximise the value of their goods. The art market,
however, partly destroys the value of its commodities by diminishing the value of
works whose title, authenticity or attribution is disputed. Yet another issue stems
from the way in which legal environments deal with inauthenticity disputes: if the
aggrieved party encounters many hurdles when trying to rescind the sale of an
inauthentic artwork or when making a claim for fraud, this may as well inhibit
potential buyers from making purchases on the secondary market. Therefore, legal
regimes also contribute to a certain extent to what is considered as the art market’s
inefficiency.
4.2.3 Why Does Inefficiency Persist?
Because of the above, Day argues that “the puzzle is not the market failure itself, but
its persistence”.54 This brings up the question why this state of failure continues to
persist, while it should prompt those who would benefit from increased efficiency, to
advocate a change in the level of regulation and supervision. According to Day, the
problem is not that the responsible actors have tried and failed, but instead, that all
parties appear to be content with the current situation. Hence, he concludes that “a
market can exist in a state of failure if the preferences of the buyers and sellers are too
aligned” with the consequence that neither has an incentive to demand increased
efficiency.55 Usually, all necessary information regarding a good’s market value will
be publicised if a certain number of parties interact in the market place: acting at
arm’s length, the price on which parties agree reflects the market value. On the other
hand, if the way in which a market sells its good was perceived as benefitting one
group and exploiting the other, a call for corrective legislation in the form of
supervision or regulation would be expected to arise.56 In this context, the former
52
Day (2014b), p. 485.
53
Ibid.
54
Ibid. p. 486.
55
Ibid.
56
Ibid. See also Lazzaro and Moureau (2013), p. 160.
French regulation of the auctioneer profession can be interpreted as a necessity for

safeguarding neutrality. Possible causes of market failure, such as the informational
asymmetries mentioned above and intermediaries’ opportunism would be reduced,
at the benefit of those buyers who are unable to discern the true quality of the goods
offered. The adversarial relationship between buyers and sellers is the basis for both
an efficient trade and the enactment of rules encouraging and safeguarding these
transactions.57 However, the probability that art will appreciate removes a key
adversarial quality and causes buyers and sellers’ interests to align. More precisely,
it is argued that buyers can foresee the day when they swap roles and become the
seller, hoping to realise a profit.58 Therefore, buyers do not demand greater oversight
as they expect that, at an opportune time, they can take advantage of the same market
inefficiencies: from the seller’s perspective, any doubts that could diminish the value
are pushed aside in the hope that the issue does not come up again.59 In other words,
a buyer expects to benefit more as a seller tomorrow than he would risk losing as a
buyer today. Drawing conclusions from the above, the basis of an efficient market
lies in its ability to provide required information at a reasonable cost: hence, the most
efficient economic and legal systems aim to safeguard this predictability by obliging
market participants to disseminate certain information or by enjoining them to
conceal it.60
Since the dissemination and the flow of information in the art market is subject to
extraordinary mechanisms, art market participants are not likely to approve of
initiatives that would profoundly change these structures. Therefore, the following
proposals for reform focus on establishing means which enable the art market to
address questions of authenticity in a more orderly, reliable and legally effective
manner. Despite greater reliability and certainty of authenticity opinions, the envis-
aged framework is aimed at providing standard practices regarding form, structure
and transparency of expert opinion that will facilitate the market’s functioning in
many respects.
4.3 Regulation: An Adequate Remedy?
Generally, a regulated market is subject to a certain level of oversight and control by

government bodies, industry or labour groups.61 Regulation either restricts the
freedom of market participants or grants them special privileges by imposing rules
57
Day (2014b), p. 487.
58
Ibid.
59
For instance, buyers seem to have accepted that sellers might have buried adverse opinions on
authenticity because they may later do so as well when reselling the work in question.
60
Ibid. pp. 464 f. While the perfect information is unlikely to exist, markets nevertheless aim at
providing enough information to enable wise decision-making on the side of its participants.
61
See Investopedia.com, What is a ‘regulated market’ and Gabler Wirtschaftslexikon, Regulierung.
4.3 Regulation: An Adequate Remedy? 267
on the marketing of services and goods, their prices, quality and safety standards,
consumer rights, environmental and social impacts, as well as on market access and
monopolies.62 Regulatory bodies and agencies usually derive their authority from
legislation and supporters of regulatory regimes stress the benefits to wider society
(for instance, bans on pollution or discrimination), while advocates of a free market
argue that anything in excess of the most basic regulation is inefficient, costly and
unfair. By now, it has become evident that the art market is not as unregulated as it is
often accused of being. While several regulations apply to certain aspects of its
transactions; the majority of the market is still governed by long-standing practice
and tradition. However, there are many arguments that a changing landscape in the
market requires its structures to be more regulated. In summary, the main arguments
are that increasing prices have created an incentive for a proliferation of forgeries to
enter the market and that it is becoming increasingly difficult for even trained
specialists to spot and cull forgeries. To add to the problem, scholarship is currently
in a state of crisis as numerous authentication boards have been disbanded and
experts are increasingly reluctant to issue expertises. While the argument for more
regulation is strong, it is, however, more difficult to predict what effects further
regulation would have on an art market. Therefore, the next section looks at the
regulatory scheme that is currently in place in New York, one of the most important
regional art market hubs. Secondly, the example of Australia’s regulation of its
indigenous art market is used as an illustrative case of the unintended negative
consequences that can occur if a government intervenes in the operation of a regional
art market.
4.3.1 Current Regulatory Schemes in the US Art Market
As mentioned before, the US currently has the largest share of the art market’s global
turnover.63 The US has no uniform system of regulation, but since most market
activities take place in New York, it is of avail to have a look at the level of
regulation in place.64 Until 1966, there was no statutory regulation of the art market
in New York. However, in the following years, new statutory provisions were added
with a view to offering enhanced protection for private market participants.65
62
Ibid.
63
McAndrew (2018), p. 34.
64
Day (2014a), p. 140. In fact, New York and California are the two states with most market
activities. However, since 95% of the US art trade takes place in New York, the analysis focuses on
the regulations in this state only. Moreover, there are also regulatory schemes at federal level which
seek to offer protection to artists, but which do not regulate the art market, for instance the Visual
Artists Rights Act of 1990 (VARA).
65
See Gerstenblith (1988), p. 516. In 1966, New York enacted the comprehensive Arts and Cultural
Affairs Law to supplement the U.C.C. and to confront the specific problems posed by the art
industry.
Initially, the Uniform Commercial Code (UCC) provided for the creation of express
warranties under certain circumstances. In art-related contexts, an express warranty
arises if: (i) the seller makes an affirmation of fact or a promise;66 (ii) gives a
description of the goods;67 or (iii) a sample or model68 if this is part of the basis of
the bargain. While such a warranty arises automatically once the conditions are
fulfilled, the critical question was whether the seller indeed made an affirmation of
fact or merely described an artwork’s features. This uncertainty contradicted the
assertions that the UCC offered adequate protection to consumers and effectively
regulated art market transactions since any statement concerning authorship by the
seller can be interpreted as a mere opinion which is not part of the basis of the
bargain. Therefore, the New York legislature introduced a new provision, Article
13, in the Arts and Cultural Affairs Law stipulating that any description as to
authorship will give rise to an express warranty and by creating the legal presump-
tion that this is also part of the basis of the bargain: an express warranty is created if
an art merchant, when selling a work, furnishes to the private buyer a certificate of
authenticity or any similar written instrument.69
As discussed, authorship and attribution have a major influence on artworks’
prices and it is thus reasonable to consider this feature to be part of the basis of the
bargain.70 In this context, a second argument was put forward against the new
provision, namely that a definite determination of authorship can only be made by
the artist himself or by a person who was an eyewitness to the creation of the work in
question. In many cases, however, the artist is already deceased, and it is impossible
to find eyewitnesses and therefore, it is unreasonable to rely on the seller’s statement
as a warranty. This argument seems to be somewhat artificial because if a disap-
pointed buyer is denied the possibility to hold the seller to his word, who else can he
then refer to? Moreover, an express warranty might be subject to a disclaimer.
However, under the following circumstances a disclaimer is deemed to be unrea-
sonable and hence, inoperative: a disclaimer will first be ineffective when the work
sold is a forgery. This provision is in line with the UCC as any disclaimer as to
authorship is inoperative and the fact that a forgery is by definition not created by the
purported artist means that the express warranty is automatically violated. Secondly,
a disclaimer is inoperative if a statement regarding authorship is false, mistaken or
66
N. Y. U.C.C. §2-313 (1) (a).
67
N. Y. U.C.C. §2-313 (1) (b).
68
N. Y. U.C.C. §2-313 (1) (c).
69
N.Y. ARTS & CULT. AFF. LAW § 13.01 (2012). See also Gerstenblith (1988), pp. 516ff.
70
This is in line with other legal systems: for instance, German case law provides that the authorship
of a work of art is a relevant property within the meaning of Section 119 (2) of the Civil Code so that
the party who erred with respect to this quality can void the transaction. See Federal Supreme Civil
Court, decision of 8 June 1988 - VIII ZR 135/87.
4.3 Regulation: An Adequate Remedy? 269
erroneous.71 Again, this situation is also covered by the UCC since even an
unqualified statement concerning authorship creates an express warranty.72
The addition to the Arts and Cultural Affairs Law was aimed at solving the
question whether an authenticator’s opinion is an affirmation of fact that gives rise to
a warranty or a just an opinion, which does not. According to the new provision, the
authenticator’s signature on a certificate of authenticity constitutes prima facie
evidence that “he holds himself out as having the knowledge, skill or expertise
required to make such a statement” and hence, assumes responsibility.73
4.3.2 Regulation of the Australian Aboriginal Art Market
In 2007, the Australian indigenous art market was at its height and works were for
the first time internationally sold for more than $two million. But the financial
success brought with it a number of market participants who exploited the less
educated and vulnerable Aboriginal artists.74 Eventually, the Australian government
launched the “Indigenous Australian Art Commercial Code of Conduct”, in response
to the widespread practice of corrupt dealers exploiting indigenous artists by buying
their artworks low and selling them high for their own profit.75 At first glance, this
practice seems to be the usual working practice for dealers—at least as far as it does
not focus on expressly exploiting a particularly vulnerable social group.76
The Code introduced a set of ethical standards in order to ensure fair trade,
provided guidelines for promoting and branding indigenous artists, and provided
for a complaints procedure against dealers, including sanctions.77 Initially, the Code
was voluntary, but would become mandatory after 2 years in operation. Moreover,
the Australian government implemented a new “Resale Royalty Scheme” in order to
benefit indigenous artists.78 Under the Scheme, living Australian artists are entitled
to receive 5% of the sales price when their artworks are commercially resold for
more than $1000.79 However, since its introduction in 2010, the scheme has required
2.25 million Australian dollars in government support, while generating less than
71
N.Y. Gen. Bus. Law § 219-d (3).
72
N.Y. U.C.C. §2-313.
73
Gen. Bus. Law, § 219-h (c).
74
Day (2014a), p. 151.
75
Ibid. p. 152. Indigenous Art Code. Available at http://www.indigenousartcode.org [last visited
March 30 2022].
76
Unlike in other countries, where artists are usually self-sufficient, Aboriginal artists and indige-
nous Australians in general, face many social and economic disadvantages.
77
Ibid.
78
Australian Government Ministry for the Arts, Resale Royalty Scheme, available at http://arts.gov.
au/visual-arts/resale-royalty-scheme [last visited March 30 2022].
79
Ibid. The scheme is applicable for an additional 70 years after an artist’s death.
130,000 Australian dollars in collection fees—making it an unsustainable initia-

tive.80 In addition, the increase in prices has turned away potential buyers which
means that the gains in resale royalty must be offset by loss of income from declining
primary sales. Unfortunately, these new regulations coincided with the world eco-
nomic downturn and financial recession in 2008 and instead of supporting the
indigenous artists’ community, they had a “devastating effect” on the indigenous
art market.81 For instance, the value of private purchases of high-end indigenous art
is now half as much as it was in mid-1990s. Apart from this, the example shows
some of the negative consequences regulation can have on a once lucrative market.
When calling for greater regulatory oversight, supporters would be wise to take note
of these results. On the other hand, the case of Australia and its market for
indigenous art is very specific and regulation was tailored to a very distinct
sub-part of the overall art market. Therefore, it is difficult to apply the results of
this intervention to other national art markets by analogy.82
4.3.3 Self-Regulatory Measures Instead of External

Regulation
The example of Australia’s market regulation provides valuable insights into the
negative consequences which governmental intervention can have. Therefore, this
book proposes that regulation should be implemented in the form of standardised
practices for matters of authentication and attribution and more specifically, that it
should come from within the market as a framework of self-regulation. In fact, there
seems to be consensus among those in favour of more regulation and transparency
that a better framework for self-regulation should come from within the market.83
And indeed, while the gap between national regulation and international commerce
has widened, and with the art market fully embracing globalisation, national regu-
lation seems to be unable to affect the global structure. It is exactly this limit in
territorial application which makes it hardly possible to establish and enforce art
market regulations on a global scale. For the public and the art market’s client base,
transparency and increased regulation means more clarity about terms and condi-
tions, pricing, and consumer rights when buying and selling. For interest groups,
politicians and the media, these concerns have far wider implications, ranging from
provenance and art crime to market manipulation. Instead of unilateral measures
imposed at government level, art experts and others concerned should lead an effort
80
Rothwell (August 8, 2013).
81
Day (2014a), p. 159.
82
For a theoretical application of the Australian rules to the US contemporary art market, see Day
(2014a), pp. 162ff.
83
See Deloitte | ArtTactic (2016), p. 140.
4.4 Assessment of Recent Initiatives 271
to adopt industry-wide self-regulations.84 Aimed at promoting uniformity, increas-

ing transparency and creating standard practices, a strategy of self-regulation would
pre-empt incentives for government intervention and has the potential of restoring
faith in the trade’s practices and structures.
Currently, there is certainly self-regulation, but the approach is scattered: dealers
and auction houses with reputations to protect, for instance, have adopted ethical
codes and carry out due diligence on behalf of their clients in order to verify the
legality of transactions.85 The same holds true for dealers who are members of
associations such as The Art Dealers Association of America (ADAA) or the College
Art Association and voluntarily subscribe to their codes of ethics. In general, it is
argued that for a market as complex, diverse and constantly evolving as the art
market, a self-regulatory approach is widely recognised as having several advan-
tages over external, state-imposed regulation.86 Firstly, industry developed guide-
lines can be developed and updated much more quickly than state-imposed
regulation. Secondly, such guidelines should be accessible to the entire market,
including small art businesses and other entities that do not have the resources to
spend on large compliance departments. Thirdly, conflicts of interests would be
mitigated and unlike national legislation, industry-wide guidelines can transcend
territorial boundaries and thus, are better adapted to serve a global art market.87 As a
result, it will be suggested that art experts should organise themselves in an umbrella
association, pool their skills and knowledge, and adhere to a uniform framework of
guidelines, thereby creating standard practices for the art market. By advocating for
self-policing, art experts “serve their own competitive interests by unifying the art
market and the due diligence obligations” among its participants.88 The proposals
are therefore in line with the general mood in the market which acknowledges the
benefits of increased transparency and standardised practices, but on the other hand,
reckons that this would detrimentally affect the art market, whose opaqueness is
often considered to be its attraction.
4.4 Assessment of Recent Initiatives
In recent times, several initiatives have been introduced with the aim of raising
awareness of risks faced by art market participants and providing guidance on how
to establish and implement standardised practices to counteract such risks. These
include the Basel Art Trade Guidelines, a very comprehensive attempt to create
equal competitive conditions for all market players; the more specific Art
84
Steiner (2017), p. 370.
85
Ibid. p. 371.
86
Heaton and Giroud (2017) in Deloitte | ArtTactic (2017), p. 247.
87
Ibid.
88
Steiner (2017), p. 371.
Transaction Due Diligence Toolkit, prepared by the Responsible Art Market Initia-
tive and lastly, the very specific Recommendations for valid written expert opinion,
published by the Authentication in Art workgroups that are addressed to authenti-
cators and art historians providing expert opinion.
4.4.1 The Basel Art Trade Guidelines
The Basel Art Trade (BAT) Guidelines were developed by Thomas Christ and
Claudia von Selle and the Basel Institute on Governance in 2012 based on the
finding that the current level of regulation and existing compliance efforts by
individual operators was insufficient.89 The Guidelines are perhaps the most detailed
proposal for regulation in recent times. According to the authors, collective action by
key market participants can be an effective way to address certain practices and to
ensure fair and efficient competition. At this point, there are no universally agreed
guidelines and the authors stress the gap between stakeholders’ deeper insights and
their actual commitment to addressing the problem.90 With a view to the economic
inefficiency and asymmetry of information, the Guidelines offer equal, competitive
conditions to participating market operators by imposing due diligence requirements
on contractual parties.91 In contrast to already existing guidelines and codes of
ethics, the BAT Guidelines would have universal application, providing a level
playing field to all participants. One of the main objectives is to harmonise “a
quantitatively and qualitatively diverse range of ethics and due diligence standards”,
focusing on rules on commercial confidentiality, procedures for alternative conflict
resolution and an implementation and monitoring system.92 As regards the scope of
application, the Guidelines apply to all professional stakeholders who are involved
in the sale of art objects, from auction houses, dealers, galleries, museums, experts,
insurers, conservators, curators and restorers.93 Furthermore, the Guidelines provide
for “full identification and documentation of the seller and the buyer” as a starting
point.94 However, it is also recognised that reasonable grounds to remain anony-
mous must be balanced with this disclosure requirement: therefore, the Guidelines
stipulate that the identity of seller, buyer and all intermediaries involved must be
made public (Sects. 3.2 and 3.2.1) unless a non-disclosure agreement is explicitly
demanded by either seller or buyer upon presentation of justifiable grounds such as
89
Christ and Von Selle (2012), p. 6.
90
Ibid.
91
Ibid. p. 9.
92
Ibid. p. 20.
93
BAT Guidelines, Section 1.
94
BAT Guidelines, Sect. 3.1.
the “necessary and legally defendable protection of his privacy” (Sect. 3.2.2).95 In
addition, in cases where non-disclosure is granted, the Guidelines require the art
market operator acting on behalf of the respective seller to provide a purchase back
guarantee and to conduct enhanced due diligence (Sect. 3.2.2).96 As regards general
due diligence obligations, the Guidelines stress that such research is crucial for
establishing transparency on provenance, authenticity and the price of the art object
in question (Sect. 4.1).97
In this respect, “an undisputed and uninterrupted provenance history and proven
authenticity of the art object is the aim in all transactions” (Sect. 4.2.1). Notwith-
standing the question whether this aim is always realistic and achievable, art market
operators should nevertheless commit to undertake best efforts: this includes suffi-
cient time to research reasonable provenance and authenticity, making such efforts
as they are commercially reasonable and use all sources of information that can be
made available with justifiable and reasonable efforts (Sect. 4.2.2).98 Importantly,
the extent of research should be proportional to the market value or the cultural or
historical importance of the respective object.99 Beyond this, enhanced due diligence
is prescribed if the seller requests non-disclosure of his identity to third parties or if
95
It seems to be difficult to assess which reasons would be regarded as a defendable protection of
privacy. According to the Guidelines, if the reason for non-disclosure is to circumvent applicable
laws, then the interest cannot be recognised. However, there is a fine line between the two. For
instance, Dmitry Rybolovlev was accused of having incorporated Xitrans Finance Ltd. in the British
Virgin Islands, an offshore company called a mini-Louvre museum when it came to its assets, solely
for the purpose of shielding his art collection from his wife during their divorce proceedings. In this
case, it is questionable whether non-disclosure would be necessary to protect the collector’s privacy
or whether it would in fact be used to deprive his spouse of marital assets. See Kinsella (6 April
2016) and Fitzgibbon (April 3, 2016).
96
However, in cases of incomplete provenance, an artwork can only be sold if the seller’s identity is
fully disclosed. See BAT Guidelines, Sect. 4.3.
97
In particular, it is stated that “the identification of the art object is verified through due diligence
and determines the commitment the seller has to the buyer, and the responsibilities of the art market
operator in concluding the operation”. As regards the standard of care required, “the art market
operator’s best efforts should be at least equal to the due diligence endeavours he would undertake
when acting for his own account and responsibility”.
For a general discussion of due diligence obligations in the art market see Giroud and
Boudry (2015).
98
This includes “obtaining the provenance history of the object, requesting identification informa-
tion from the seller [. . .], referring to publicly available databases and listings [. . .], obtaining any
relevant and available legal documents, witness declarations and expert opinions, and checking the
restoration history [. . .].”
99
According to Section 6.1, the level of disclosure and due diligence exercised in the operation are
directly proportional to the art market operator’s after-sale responsibility. If the identity of both
seller and buyer are disclosed and due diligence obligations are properly observed, the art market
operator will, pursuant to Section 6.2.1 only incur limited responsibility, i.e. for acts and omissions
that he is usually responsible for in the conduct of his own dealings. However, there is strict
responsibility if the seller’s identity is not disclosed, the operator breaches his due diligence
obligations and in cases of unclear provenance or unresolved questions regarding authenticity.
the work’s provenance or authenticity raises serious doubts (Sect. 4.4). According to
the Guidelines, enhanced due diligence involves at least, obtaining additional inde-
pendent expertise,100 consulting expert committees, checking of additional data-
bases,101 registers and listings, a professional background check on the seller,
research on previous trade activities involving the seller and information requests
to relevant law enforcement authorities.102 Again, the Guidelines provide for a
purchase back guarantee if the enhanced due diligence procedure yields insufficient
or inconsistent information.103 Moreover, the Guidelines propose regulations for
identifying the legitimacy of buyer’s source of funds and for cash payments (Sects.
5.1 and 5.2).
Finally, the shortcomings of judicial proceedings for the purpose of conflict
management are acknowledged and non-judicial settlements, including Alternative
Dispute Resolution proceedings (arbitration, mediation and recourse to a Dispute
Board) are advocated. As regards the implementation, parties must publicly sub-
scribe to the Guidelines, possibly through their art dealers’ association, and publicly
acknowledge their compliance with the Guidelines. Furthermore, the Guidelines
would introduce an independent monitoring mechanism to ensure compliance,
sanctions and institutions such as an Advisory Board and a secretariat to monitor
compliance. The pillars formulated in the BAT Guidelines are currently not found in
any of the agreements or non-binding codes in existence. Therefore, their scope is
criticised as “excessive and unrealistic”.104 This criticism is based on the art market’s
traditional high level of commercial confidentiality coupled with the fact that market
participants often perceive a gap between their alleged entitlement to disclose or
retain information relating to an art object and the legal requirements protecting the
interest of third parties in such transactions.105 Especially due to the heterogeneous
nature of the art market, the establishment of an Advisory Board was declared
unacceptable, in particular by the leading auction houses that took part in the
100
With a view to expert opinion, the Guidelines clearly express that such an opinion is invalid if the
“professional independence of the expert is in doubt” (Sect. 4.2.3). Based on this provision, it can be
concluded that both authentication boards, which are affiliated with a foundation managing an
artist’s estate, and experts or holders of a droit moral, who authenticate and deal in objects of the
same artist, persist in a state of conflict of interest that renders their opinion on authenticity invalid.
101
To add to existing databases, the Guidelines suggest the implementation of two new databases
listing artworks whose provenance could not be fully established and second, whose provenance is
subject to a claim.
102
In addition, Sect. 4.4.1 stipulates that the costs of increased due diligence will be borne by the
seller.
103
If doubtful provenance raises the suspicion that the artwork was stolen, illegally imported or
otherwise illicitly obtained, the appropriate authorities must be informed.
104
Christ and Von Selle (2012), p. 22.
105
Ibid. p. 20.
discussion of the draft Guidelines.106 Therefore, the proposed structure was univo-
cally perceived as impractical in the global market. Nevertheless, market operators
agree on the need to take self-regulatory action under the condition that this does not
directly undermine the commercial interests of the trade—this was confirmed by the
BAT Guidelines and in the Deloitte | Art Tactic Art & Finance Report 2016.107 In
particular, art market participants should be seriously concerned with the consider-
able reputational risks as illustrated by the Achenbach, Beltracchi and Knoedler
cases. While the BAT Guidelines seem to be very far-reaching and ambitious in their
scope, the following section will focus on regulatory measures in very specific
areas only.
4.4.2 The Responsible Art Market Initiative: Art Transaction

Due Diligence Toolkit
In February 2018, the Responsible Art Market Initiative launched the Art Transac-
tion Due Diligence Toolkit, a non-exhaustive compilation of strategies aimed at
mitigating the risks that arise in art transactions.108 The Toolkit recommends due
diligence enquiries regarding the parties involved in the transaction, the artwork
concerned, and the transaction itself. To establish the risk profile of a potential
transaction, clients should consider the nature of these three categories and should
be alert to the existence of red flags. Regarding client due diligence, the Toolkit
encourages individuals to verify the identity of the other party or as far as entities are
concerned, to make best efforts to identify controlling owners, or beneficial owners
in the case of offshore companies.109 If intermediaries are involved, it should be
checked in which capacity they are acting. Concerning the artwork due diligence,
which is of particular relevance for this book, the Toolkit lists the commonly known
facts with regard to the roles of provenance, exhibition history, expert opinion and
scientific testing.110 Moreover, the Toolkit enumerates several circumstances which
are considered to represent red flags and hence, should give reason for a heightened
due diligence enquiry.111 These situations include artworks with limited or no
106
Ibid. p. 23. In fact, the authors conclude that the “art market has shown pronounced lack of
interest in constructively dealing with the proposed draft BAT Guidelines and the issues it
addresses. [. . .] This, and the fact that even trials such as the Beltracchi case go largely unnoticed
in the United States, may point to the possibility that the art trade is simply not ready for self-
regulation at this moment in time.”
107
108
The Responsible Art Market Initiative, Art Transaction Due Diligence Toolkit, p. 1.
109
Ibid. p. 2.
110
Ibid. pp. 4 f. In addition, it also lists recommendations regarding endangered species material,
cultural property (including archaeological objects), trade restrictions, as well as lost and stolen
items and looted or spoliated items.
111
Ibid.
documentation or provenance, adverse market comment on the artwork in question,

the artist or the object is known to be forged, and sellers who keep changing the story
on how they acquired the artwork.112
As regards the transaction due diligence, art market participants should pay
particular attention if the transaction is taking place through intermediaries or by
other non-face to face means, if it involves unusually complex structures, artificially
low or inflated prices without a logical business reason, or unusual payment
methods.113 Finally, the Toolkit emphasises the importance of fully and correctly
documenting transactions. This facilitates the client’s position during an investiga-
tion or if a dispute arises and minimises legal, reputational and financial risks.114
This can be done in written agreements that also retain proof of the due diligence
measures carried out. All in all, the recommendations provide useful information
about the performance of due diligence prior to a transaction. However, it seems that
they are primarily aimed at first-time purchasers or small art businesses that are not
yet experienced in art market transactions. For the rest, these guidelines are more
easily stated than applied. Of course, the identity of a seller or the capacity of an
intermediary should be established, and special attention should be paid if it is
known that the artwork in question belongs to a genre that is “known to be forged”,
for instance the Russian Avant-Garde. However, there are few possibilities to
remedy these concerns. If an auction house or gallery refuses to reveal a seller’s
identity, there is very little a purchaser can do, apart from abstaining from the
transaction. Moreover, it is frequently unknown to the parties that intermediaries
are involved in a transaction; hence, it might be impossible to establish their
capacities. Because of these factors, the Toolkit correctly states numerous important
reasons why due diligence should be performed thoroughly. However, it is of less
avail when it comes to the question of how to conduct these enquiries. This is
because the art market’s structure is known to hamper investigations into provenance
and history as well into the parties and funds involved in a transaction.
4.4.3 Authentication in Art: Recommendations for Valid

Written Expert Opinion
Another initiative was brought forward by the Authentication in Art “Art and Law
Work Group”. The group developed specific recommendations tailored to art experts
112
Applying this consideration to the Knoedler case, it confirms that Knoedler Gallery and Ann
Freedman should have been aware of the red flags, i.e. the inconsistent provenance and the total
absence of any other documentary evidence.
113
Ibid. Section 3.2. Again, this can be applied to Knoedler Gallery: the prices for which Rosales
brought the paintings to Knoedler were conspicuously far below the market level and hence, should
have raised doubts.
114
Ibid. Section 3.4.
with a view to introducing industry standards for the form, structure and content of
written expert reports.115 This framework is aimed at increasing the predictability of
authentication processes, minimising the risk of unreasonable and baseless authen-
ticity decisions and finally, at enabling courts and judicial tribunals to better assess
the reports under the applicable rules of evidence of procedure.116 It is hoped that the
community of experts will voluntarily agree to issue opinions based on the suggested
criteria as this would allow clients, the market, and at times also the courts to better
evaluate and compare experts’ authenticity opinions, further helping to insulate them
from claims of liability for their conclusions. After all, legal systems always accept,
and the market better should accept, that experts can reasonably differ in their
opinions—but by prioritising the opinion of a single accepted authority, the art
market has until now neglected to embrace this reality.117
To achieve its goal, the recommendations propose 11 components that all experts
should include in their reports.118 Firstly, the report must disclose the identity of the
client requesting the opinion so that stakeholders can assess any potential bias or
conflicts of interest. To allow for confidentiality requirements, representatives can
serve as requesting parties in the form of beneficial enquirers, but this must be
expressly stated. Moreover, the artwork in question must be sufficiently described as
to allow for a proper identification.119 Secondly, the expert must affirm that he has no
economic, ownership or other beneficial interest in the object and must identify all
actual and potential conflicts of interest.120 Thirdly, the amount of compensation
must also be stated and in contrast to current practices, this may not be a percentage
of the artwork’s estimated value or ultimate sale price. Fourthly, the expert must
refer to his academic and professional background, experience, and expertise on a
115
Authentication in Art, Recommendations of the Art and Law Work Group on the Technical
Requirements for Valid Written Expert Opinion Reports on the Authenticity of Paintings for Use by
the International Art Community Privately and in Judicial Proceedings Determining the Authen-
ticity of Paintings as a Matter of Law, The Hague, May 2014.
116
Ibid. p. 5. A baseless authenticity decision usually reads like “the work does not feel or look right
and hence is not authentic”. Even though such a statement lacks a sound basis, it can nevertheless
deflate the value of the artwork in question, depending on the authority of the person expressing
it. Moreover, such decisions bring the business of authentication and attribution into disrepute.
117
Ibid.
118
Ibid. p. 6. The suggested criteria are based on procedural decisions by the U.S. Supreme Court
such as the Daubert rule, U.S. Federal Rules of Evidence and procedural standards from the UK. For
instance, the Daubert rules for assessing the admissibility of expert testimony applies to all kinds of
experts and it follows that expert testimony can be excluded if there is an analytical gap between
reviewed data and the ultimate opinion and if the expert has not accounted for unexplained
alternative conclusions; and the more subjective and controversial the expert’s enquiry, the more
likely it should be excluded as unreliable.
119
Ibid. p. 7.
120
Ibid. Basically, the market should engage experts with the fullest degree of actual independence
possible.
particular artist, including his associations and publications.121 As regards the scope
of work, the full scope of the expert’s engagement must be documented, including
any activities that he was directed to undertake or not undertake and the facts, data as
well as the source of background materials must be articulated. It is of importance to
know whether the work was inspected in person, how the provenance or other
documentation was reviewed, and what forensic material was assessed to create a
baseline environmental assumption prior to scientific testing.122 Central to any
expert report on authenticity are the methods of analysis used to form the opinion.
These provide the logical basis and reasons for the final opinion and by specifying
the methods of analysis, stakeholders can evaluate the level of their credibility. Also
in stark contrast to today’s practices, the recommendations stipulate that “the more
the technique is purely subjective, the more the method and hence opinion should
likely be discounted as unreliable”.123
There is no checklist for determining the reliability of methods, but it will be
taken into account whether the method can and has been tested; whether it has been
subject to peer review; whether there is a known or potential rate of error; and
whether it is generally accepted within the community of experts. If an opinion is
solely based on visual inspection, this analysis may be deemed reliable only if the
observations are based on relevant, extensive and specialised experience: observa-
tions that are not supported by further explanation are generally not acceptable,
irrespective of whether this particular method of analysis is recognised by others in
the same field. Beyond this, the expert must articulate how he applied the selected
methodology to the specific facts and data and how this led to the formation of an
opinion.124 There should be no analytical gap between the facts and the opinion, and
the reconciliation of data and methodology should be easy to discern. Moreover, it
should be addressed why alternative explanations for the facts or alternative con-
clusions were dismissed. When it comes to the conclusion, an expert must be able to
formulate the reasoning deducted from scientific enquiry, historical contextual
information, visual observations, or a combination of the three, in order to present
his opinion to the client, the market and in some cases, the court, in the prescribed
format. Finally, the recommendations address the issue of the level of certainty in
expert opinion. While an expert must reach an opinion based on all information
available, it is current practice that such an opinion is formulated with absolute
certainty: an artwork is either authentic or inauthentic. Therefore, the recommenda-
tions clearly distinguish between burdens of proof in legal proceedings and the level
of certainty which experts must express in their reports, both to serve their clients’
purposes and as expert witnesses in court proceedings. As noted earlier, the burden
121
Ibid. p. 8. The listed competences serve as point of reference when assessing his competency.
Again, this requirement is also found in the Competency Rule of the U.S. Uniform Standards of
Professional Appraisal Practice (USPAP) 2014–2015 Edition.
122
Ibid.
123
Ibid. p. 9.
124
Ibid. p. 10.
4.5 The Changing Role of Science and Technology 279
of proof is generally and, in most jurisdictions, expressed as a “preponderance of the

evidence” in civil proceedings and as “beyond a reasonable doubt” in criminal cases.
Consequently, the guidelines recommend that experts express their decision
whether a work is or is not authentic “to the highest degree of professional or
scientific certainty”.125 By doing so, the expert indicates that there is no credible
evidence supporting another sound conclusion and courts are able to apply their
standard rules of law and evidence to reach a final judgment in art-related disputes.
Although this suggestion is comprehensible, it fails to consider the finding that
questions of authenticity and attribution are not well suited for adjudication by
courts employing traditional rules of law, evidence and procedure. Foremost, this
proposal seems to overlook the realisation that any opinion on authenticity is a
statement of opinion and not of fact. Whether or not one goes so far as to consider
authentication to be in the “realm of intellectual speculation”, the fact remains that
the high level of subjectivity inherent in authentication cannot adequately be recon-
ciled with courts’ demands. In this context, the guidelines can nevertheless be seen
as a form of insurance against liability claims: if an expert presents his evidence in
such an ordered and clearly motivated way, the chances of holding him liable for
negligent or fraudulent work decrease substantially and the chances of a successful
defence are raised. In fact, if an opinion is structured in a standardised way, anybody
can deduct the internal logic and can assess whether the conclusion reached is
reasonable.
4.5 The Changing Role of Science and Technology
Where does scientific analysis stand in these developments? As noted earlier,

evidence provided by scientific and technical analysis can be one of the three basic
factors for a determination of authenticity.126 Science can provide non-arbitrary data
in relation to specific questions, but any result needs interpretation both in itself and
in relation to broader historical evidence. As exemplified by the Beltracchi/Lempertz
case, the art world often fails to understand the parameters of scientific examination
and what it can and cannot deliver. As mentioned before, scientists in this case did
not come to a definitive conclusion and left the final judgement to the experts who
were required to assess the scientific evidence in conjunction with historical and
observational findings. But even when adequately understood, there is no
established way of how to integrate scientific analysis into the two other methods
of analysis. For instance, in the Beltracchi/Lempertz case, experts could not conclu-
sively agree whether the presence of a modern pigment was definite evidence for a
forgery but considered that it might also have been added by the artist himself later.
Hence, the different bodies of evidence might sometimes appear incommensurable.
125
Ibid. p. 13.
126
Demarsin and Proefschrift (2008a), pp. 97ff; and Demarsin (2008b), pp. 116ff.
It was hoped that the recent high-profile cases, especially that involving the sale of
modern “Old Masters” forgeries at Sotheby’s, would cause auction houses and
dealers to undertake more scientific analyses prior to a sale. And indeed, in early
2017, Sotheby’s announced the establishment of its own research department, with
the appointment of James Martin as its director and the acquisition of his company
Orion Analytical.127
The establishment of the first in-house scientific research department at a major
auction house is seen as “indicative of where the market is going”.128 Scientific
analysis will be employed to support and back up scholarly connoisseurship and
historical research. In fact, James Martin had already determined the “Frans Hals”
painting Portrait of a Man to be a fake129 and testified in the Knoedler case after he
found inconsistencies in the works claimed to be by Motherwell, Pollock and
Rothko.130 Especially for auction houses and dealers, the sale of forgeries can cost
them dearly as they not only have to repay the purchaser, but also have to deal with
the fact that an identified forgery can cast doubts on other works originating from the
same collection as well as on the house’s expertise. Hence, auction houses are clearly
incentivised to bolster the connoisseurship and the provenance expertise of its
specialists with independent scientific analysis. In the case of Orion Analytical,
Mr. Martin’s analysis will be directed at works with provenance gaps or where his
analysis gives reassurance to buyers of high value works.131 The importance of
forensic analysis is expected to grow further due to authentication boards shutting
down, experts’ increasing reluctance to offer opinions, and improvements in tech-
nology. As regards the latter, rapid developments are considered to have the poten-
tial to make authentication debates “a thing of the past”.132 It remains to be seen
whether this will turn out to be true. In any event, the range of new techniques and
advances could mean that authentication disputes indeed become less prevalent.
4.5.1 New Techniques and Approaches
New scientific methods are constantly being developed that aim at making forgers’
lives a lot harder. Among others, these options include a tamper-proof label or
embedded tag encoded with a digital record. In this respect, the Global Center of
Innovation for the i2M Standards was founded as an independent international
centre in 2014 with the purpose of introducing an i2M Standard that will support
127
Gerlis and Halperin (December 5, 2017).
128
Ibid.
129
Cascone (October 26, 2017).
130
Pickford (December 5, 2016).
131
Ibid.
132
Ibid.
4.5 The Changing Role of Science and Technology 281
the art industry’s needed object identification technology solutions.133 The Center is
sponsored by ARIS Title Insurance and aims to bring academics, government and
private sector stakeholders together to establish third-party, peer-reviewed industry
standards for art identification and authentication. i2M labels are compared to
vehicle identification numbers and by scanning a label on a work with an app,
individuals can confirm its authenticity, add to its provenance, and even record
details of its conservation.134 In particular, the Center developed a system which
allows artists to sign their works with pieces of synthetic DNA.135 This represents an
objective way of marking art as the bioengineered DNA would be unique to each
item and would provide an encrypted link between the artwork and a database
holding the relevant information. The DNA details would be read by a scanner,
which would be available to anyone having an interest in verifying an object.136
A comparable project was initiated by the London-based company Tagsmart,
which developed a tamper-proof label with a unique DNA signature that artists can
apply to their work.137 These synthetic tags are able to stand the test of time and
come at reasonable costs. In addition, the European art research centre Recenart was
established in Finland to provide unbiased research results about works of art,
founded on the synergy of experienced art historians and scientists.138 Recenart is
run by a team of art historians and natural scientists who apply the latest technology
in researching art as well as traditional provenance research.139 For instance, by
using hyperspectral imaging, they were able to find a signature underneath the paint
layers of a Monet painting or conversely, to unmask a Frans Hals forgery by
disclosing that the forgery was painted on top of another painting.140 Early sup-
porters of the Tagsmart technology include artists like Gary Hume, Marc Quinn,
Chuck Close and Eric Fischl. Yet, to be truly effective, the service will have to be
widely adopted.141 While these developments have their merit for contemporary
artists, the situation becomes more complicated if antique artworks are at stake
which have already been on the market for a certain time. The notorious issue at
hand is that many historic art transactions have occurred in secret and hence, it will
never be possible to establish a chain of ownership. But by incentivising sellers to
record ownership details, provenances can become more comprehensive and accu-
rate in the future. Moreover, a new methodology was developed that uses
133
For more information see State University of New York | University at Albany (October
12 2015).
134
Mashberg (October 12, 2015) and Neuendorf (October 12, 2015).
135
Ibid.
136
Ibid. According to Lawrence M. Shindell, chairman of ARIS, this is “a secure, safe and invisible
solution that artists and owners can accept. Our goal is to remove uncertainty from the market.”
137
Neuendorf (May 15, 2017).
138
139
Ibid.
140
Ibid. See Case “Monet” and case “Frans Hals”.
141
Ibid.
brushstroke patterns to identify artworks’ authorship. The brushwork patterns, as

identified by high-resolution scans, serve as a model of the artist’s style against
which the computer will subsequently test other paintings with a contested author-
ship.142 It is suggested that this system will become more accurate and precise the
larger the known body of an artist’s œuvre becomes. The experiment by Elgammal,
Kang and den Leeuw involved a dataset of 300 digitised images with over 80,000
strokes and developed a stroke segmentation algorithm.143
By quantifying the characteristics of strokes, the researchers were able to con-
struct a joint feature space that captures the correlation between the shape of the
stroke, its thickness variation and tone variation. The proposed methodology was
able to classify individual strokes with an accuracy of 70–90%: it enabled
researchers to discriminate between artists at the stroke-level with high accuracy
and to capture artists’ invariant characteristics which are hard to imitate. It is
therefore hoped that this technology can complement other technical analysis tech-
niques, especially since it is a cost-effective solution compared to the cost of other
techniques.144 Yet another initiative concerns the use of blockchain as a way of
recording the ownership of an artwork, comparable to a registry of deeds.145
Blockchain is understood as a giant online register which records every entry and
updates everyone who is part of the network. This network is not owned by anybody
and once a transaction is recorded, it cannot be removed or altered. For art trans-
actions, blockchain is considered to have incredible potential as a means of verifying
authenticity and enhancing traceability by way of digitising the certification pro-
cess.146 Importantly, blockchain could be used for certifying all works of art, not just
digital art.147 At the moment, the fragmented nature of local and international experts
and associations makes it difficult to find and compare expertise across the different
disciplines and geographical boundaries. Whether it is the use of blockchain or
synthetic DNA, the conservatism of the art world is seen as part of the resistance to
technology. In the realm of authentication, it is due to the market’s inertia of tradition
that it still primarily relies on fallible concepts such as trust and the authority of
connoisseurship and a single expert opinion. In fact, Charney argues that the cost of
forensic testing has by now fallen to a point where it is no longer unreasonable to
142
Elgammal et al. (November 13, 2017), p. 3. The technique used is based on a methodology
developed by Maurits Michael van Dantzig who used several characteristics to distinguish the
strokes of an artist, suggesting that these features capture the “spontaneity of how original art is
created in contrast to the inhibitory nature of imitated art”.
143
Ibid.
144
Ibid. The authors of the study expressly excluded comparisons based on compositional and
subject-matter related patterns because the characteristics of individual brushstrokes carry the
artist’s unintentional signature that, unlike subject matter and compositional elements, is hard to
imitate.
145
Yermack (May 11, 2016) and Lopez (December 16, 2016).
146
Rodrigues and Urban (March 23, 2018).
147
Ibid. As regards digital art, artists can register their artwork into the blockchain at ascribe.io.
4.6 Other Remedies I: Art Title Insurance 283
expect forensic analysis to accompany art historical research.148 This was confirmed
in Lempertz v Trasteco: the court argued that with regard to a painting that is valued
at €800,000 to €1 million and with which the auction house can expect to make a
profit of at least €200,000, it cannot be argued that scientific analysis would be too
costly or time-consuming.149 This is particularly relevant in cases where an artwork
is not accompanied by any other documentary evidence that could prove its authen-
ticity. Therefore, forensic analysis should be mandatory in such a scenario.
As regards the question from which estimated price onwards scientific research
should be carried out, it must come at a reasonable fraction of the estimate. For
instance, if there is no reliable information on the provenance of a re-discovered
work, scientific research should be employed, even if it accounts for up to 10% of the
estimated sale price. On average, auction houses charge 25% buyer’s premium to its
buyers, while the commission for consignors is negotiable. Therefore, scientific
research that accounts for 10% of an estimated sale price should be seen as
reasonable. After all, if science is capable of unmasking the Rosales forgeries at
Knoedler, the Beltracchi forgery at Kunsthaus Lempertz and the Old Masters
forgeries at Sotheby’s after their sale, it would have been equally possible to uncover
their inauthenticity before a sale and to prevent the whole legal scenario that
followed.150 In the end, digital technology and forensic testing might be capable
of defeating forgery, but it is eventually up to experts and buyers to insist on the
practical application of these services, for the art trade is not likely to volunteer. In
this respect, cutting-edge technology such as blockchain and synthetic DNA are just
two of many technologies that will continuously aim at changing and improving the
art world. Neither will provide a complete solution, but taken together, the initiatives
represent a tool which can substitute for the former reliance on only one authority or
institution.
4.6 Other Remedies I: Art Title Insurance
As has already been hinted at, title insurance is considered to be the only reliable way
for a collector or an investor to ensure that he acquires or invests in an art object with
clear legal title. While title insurance is standard in real estate transactions in the
United States, it is a rather new concept that was only introduced in the art market in
2006.151 In real estate, the reason for the existence and necessity of title insurance is
found in the fact that there is no land registration system for the transfer of land titles
148
Charney (2015), p. 242.
149
LG Köln, Case 2 O 457/08, judgment of 28 September 2012, at 83.
150
Usually, this would have meant that the inauthentic materials exposed the work’s inauthenticity,
and that dealers and auction houses would have declined to sell them.
151
Taylor (November 10, 2010).
or interests in them.152 Hence, title insurance guards against financial loss resulting
from defects in title to real property; it defends the policyholder against a lawsuit
attacking the title or reimburses the actual monetary loss incurred.153 Prior to the
invention of title insurance, buyers in real transactions bore sole responsibility for
ensuring the validity of the land title held by the seller and if the title was later
deemed invalid, they would lose their investment.
Therefore, a professional title insurer will conduct a title search in public records,
review the chain of title and subsequently guarantee the clear title.154 Because most
art insurance policies exclude title defects (and authenticity), there was a need for
specialised insurance coverage for title. On the one hand, it is questioned whether
such an insurance concept is indeed necessary since auction houses request the seller
to warrant clear legal title and most reputable dealers guarantee clear title.155 But the
preceding case studies demonstrate that these warranties are often void and with
increasing investment possibilities in art,156 title insurance is likely to become a
valuable addition to or even substitute for handshake deals. Judith Pearson,
co-founder, and president of ARIS Title Insurance Corporation, adds another reason
for taking out title insurance: art buyers are increasingly advised by consultants and
lawyers before making a transaction and hence, these well-advised, but
non-commercial buyers might be treated as merchants under the UCC, lacking
certain rights and protection enjoyed by ordinary buyers.157 Modelled on the real
estate market, ARIS developed the concept of title insurance for the art market and
according to Pearson, the vast majority of title claims concern liens and encum-
brances (75 percent), while only 25 percent are related to contemporary or historical
theft.158 The insurance covers the value of an artwork at the time of purchase and in
addition, the full legal costs in the event of a title dispute, but importantly, does not
provide protection from traditional physical loss, damage or inauthenticity. The
latter can be considered as a major shortcoming: especially since the issue of
authenticity involves such a high level of uncertainty, there would be the need and
the demand to insure against this specific risk. Regarding the costs, insureds pay a
one-time premium of 2 to 3% of the purchase price of the artwork being insured.159
However, the rates may be higher according to the risk and the amount of
research: insurance for works bought on the primary market (where the chain of
152
This contrasts with most industrialised countries which use land registration systems for the
transfer of land titles. In these systems, the government is responsible for running and maintaining
the correctness of the system. See for instance the relevance of the German Grundbuch: Brehm and
Berger (2006), p. 192 and Großfeld (1993), p. 8.
153
See in general Burke et al. (2010).
154
Ibid. See also Lencsis (1997), p. 28.
155
Ibid.
156
For instance, an artwork can still carry liens after being used as collateral for a loan. See Grant
(April 12, 2015).
157
Neuhaus (February 18, 2015).
158
Ibid.
159
Grant (2015).
4.7 Other Remedies II: Contractual Considerations 285
ownership is rather limited and more transparent) can be as little as 1% of the sales
price, while the rate for Second World War era art, without clear provenance, can be
as high as 6%.160 The fact that the rate increases if there is little information on or
gaps in provenance is a valid determination of the payable insurance premium.161
After all, the level of risk associated with an artwork might differ considerably,
depending on its origin, age and economic value. According to Day, art title
insurance is one way to improve the art market’s efficiency: purchasing such a
policy would provide valuable information since ARIS must obtain sufficient reli-
able information to assess a work’s risks. ARIS could then potentially share infor-
mation on works that they determined to be forgeries.162 Yet, it remains to be seen
whether the concept of title insurance will gain a foothold in the market or, as the
discussion of PI insurance for art experts has already demonstrated, whether the art
market’s peculiarities will also deter this type of insurance from being generally
successful. For authenticity concerns, it is a major drawback that there is no
insurance against this particular risk. Given the uncertainty that surrounds authenti-
cation and its processes, it is likely that many art market participants would make use
of authenticity insurance for their own ends. Similarly, the availability of insurance
would mean that disputes about authenticity would be less likely to end up in court as
the insurer could alleviate the aggrieved party.
4.7 Other Remedies II: Contractual Considerations
As another consideration based on previous considerations, buyers would be well

advised to adhere to the following procedure before entering into a high value
transaction: (i) diligently research original documentation and provenance as far as
possible and try to verify both; (ii) consult the respective catalogue raisonné, consult
with authentication committees, artists’ foundations, scholars, dealers and other
experts; and (iii) consult a conservator to obtain an analysis of the work’s condition
and a forensic expert to test the work for anachronistic elements. In addition, art
market participants should consider adopting more detailed contracting conven-
tions.163 Importantly, it is suggested that buyers should insist on written and signed
representations and warranties regarding: (i) the authorship of the work and the date
of its creation; (ii) its provenance and all documentation provided; (iii) the fact that
there are no claims or information known that could potentially cast doubt on the
authenticity; (iv) the work’s condition (including any prior conservation or restora-
tion); (v) its inclusion in publications and exhibitions; and (vi) the key details such as
160
Rozell (2014), p. 92.
161
Similarly, the premium for insurance of real estate titles is based on the cost of examining the title
and on the risk associated with insuring the title. See Burke et al. (2010).
162
Day (2014b), p. 493.
163
Butt (2005), p. 82.
signature, size, and materials used. Moreover, buyers should reserve the right to
cancel the sale if the work is found to be inauthentic or any of the warranties is
violated, and to recover the legal fees incurred to enforce such warranty.164
More detailed contracts and the formation of standards of care would remove
courts from their difficult standing in authenticity disputes. In many transactions, the
sale of artworks is contingent upon accurate provenance and a guarantee of authen-
ticity. It is argued that if it later turns out that a sold work does not meet any of the
contract’s conditions, the court can apply standard provisions and contract law.165
This means that even though an authenticity claim is at the heart of a claim to rescind
a sales contract, the court will not have to materially address this issue. If the contract
clearly stipulates the requirement of accurate provenance, a plaintiff will have to
prove only that the information provided for by the defendant, i.e. that a given person
owned the painting during a given period of time, is incorrect and that this person
never possessed the respective work. The same holds true for a work’s condition. It
is furthermore argued that while concerns about authenticity might still be the
motivating factor behind such a claim, the courts would no longer face the problem
of adjudicating authenticity.166 Another alternative is to stipulate a referral to ADR
mechanisms in the contract. By doing so, the parties acknowledge the benefits just
mentioned and would be able to utilise the advantages of this process, such as
confidentiality, flexibility, and efficiency. On the other hand, in the absence of a
contract, a negligence claim requires that there must be a provable harm; a harm
which is contingent on a finding on authenticity. Such a solution would leave the
plaintiff without a legal remedy: but if brought in court, this question would be
decided on grounds of burden of proof—and the case studies have shown that the
result is often not meaningful.
Amineddoleh confirms that conducting due diligence prior to a purchase is one of
the most valuable pieces of advice that can be given to purchasers. Comparable to
homebuyers who hire title search companies and rely on title insurance, the same is
regarded as necessary for art purchases, especially since many artworks are more
valuable than the average piece of real estate.167 However, this brings up the
question whether such research would be possible and successful in the art market.
The hypothesis that a dealer or auction house’s reputation can help potential
purchasers to decide whether to rely on a seller’s assertions or to engage in enhanced
due diligence, lost its ground in the wake of the Beltracchi, Knoedler and Old
Masters forgery cases. Therefore, buyers are advised to insist on a written sales
contract and to include those warranty clauses which allow the purchaser to rescind a
sale if a dispute as to the work’s authenticity or authorship arises.
164
Cf. the cases of Helge Achenbach and Yves Bouvier. Had the parties set out the terms of their
transactions in writing, the gathering of evidence would have been more straightforward as the
contract would have formed the basis of their dealings.
165
Ibid. p. 83.
166
Ibid.
167
4.8 Final Remedy: Alternative Dispute Settlement 287
4.7.1 Regulating Dealers’ Position
Drawing conclusions from the discussion of prevalent practices, dealers may engage
in certain behaviour which is at the edge of unethical and at times, also illegal
conduct. It seems to be industry standard that dealers can represent both sides of a
transaction, without informing either party and hence, conflicts of interest arising is
inevitable. In this respect, Day states that the law should be reformed as to stipulate
that dealers owe a principal-agent fiduciary duty to every party with which they
contract, unless the dealer explicitly communicates his involvement with other
parties and ensuing conflicts.168 Since dealers cannot adequately serve the interests
of both buyers and sellers, an elimination of this conflicted relationship would
improve the flow of information and market efficiency.169 Moreover, as exemplified
by the cases of Achenbach v. Albrecht170 and Rybolovlev v. Bouvier,171 dealers,
acting in whatever capacity, are best advised to enter into a written contract with the
other party, clearly stating whether they act as agent for their client or as an
independent dealer. This creates clarity in their business relationship and should
preclude any dispute as to an artwork’s sales price, at least as far as the dealer’s
capacity is concerned. The reluctance to commit to writing, even a short-written
agreement, is said to have to some extent “enabled the eccentricities of the art market
to abound”.172 Hence, a more conservative and rigid approach to deals could help to
avoid some of the risks, also with a view to the myriad of intermediaries who might
be involved in a transaction. As a result, the perceived threats can be in part
overcome by exercising due diligence and committing to written agreements.
4.8 Final Remedy: Alternative Dispute Settlement
At this point, two conclusions have already been drawn: first, that disputes are an
unavoidable occurrence in art transactions and second, that courts are not well
equipped to adjudicate in these subject-specific cases. A judge or a jury cannot be
expected to review the various technicalities and specific aspects of art-related
matters and if a judgment is pronounced, the market does not necessarily obey the
court’s judgment. Hence, several authors agree that parties should instead refer to the
mechanisms of alternative dispute settlement such as mediation and arbitration.173
168
Day (2014b), p. 492.
169
Ibid.
170
171
SGHC 40, Singapore High Court, Suit 236 of 2015, March 17, 2016.
172
Kaplan (2016).
173
See for instance Bandle (2016), p. 321, Bryne-Sutton (1998), pp. 447ff and Renold (2008)
pp. 1104ff.
Although art and cultural heritage disputes related to different fields are varied, they
nevertheless share some common features: art-related conflicts are often very deli-
cate due to the involvement of extensive non-legal dimensions ranging from parties’
professional interests, the importance of confidentiality and the cultural-emotional
significance of art, to potential historical, ethical and political considerations.174
Despite a majority of lawsuits being eventually settled out of court on undisclosed
terms, court proceedings inevitably generate major media attention on the parties
involved. For instance, the New York Times titled the dispute between Rybolovlev
and Bouvier “perhaps the largest feud in the art world today”.175 The case was
fought “before the international press” and was extremely complex as claims were
brought in Monaco, Singapore, Hong Kong, and France.176 As an alternative, it is
suggested that the parties should have considered resolving their dispute by means of
alternative dispute resolution (ADR) mechanisms.177 Art disputes are generally
diverse by nature, due to a variety of parties and an often international character.
As exemplified by the Rybolovlev v. Bouvier case, a dispute can give rise to actions
in national courts of multiple jurisdictions. Apart from being costly and lengthy, the
actions can also produce conflict of law issues and contradictory outcomes.178
Consequently, ADR may be more appropriate than traditional litigation: through
single proceedings, the parties could have avoided the expense and complexity of
multi-jurisdictional litigation and moreover, could have chosen an arbitrator or
mediator with specific legal and technical expertise in art-related matters—some-
thing, which traditional courts notoriously lack.179 In 2010, the Geneva Art-Law
Centre launched research titled Alternative Dispute Resolution Mechanisms in
Art-Law.180 This initiative confirms that the potential of ADR methods in
art-related disputes has continuously been gaining international consideration and
is often more appropriate that court litigation.181 In general, ADR refers to processes
in which an impartial person assists in resolving a dispute.182 In addition, ADR
allows parties to keep proceedings to a large extent confidential, enabling them “to
focus on the merits of the dispute without concerns of its public impact”.183
However, it is perhaps the most relevant feature of ADR in the context of art
174
Andreides (2017), p. 7 and Bandle and Theurich (2011), p. 29.
See also Theurich (2010), Volume 8, p. 575.
175
Carjaval and Bowley (September 23, 2015).
176
den Hartog (23 October 2015).
177
Ibid.
178
Ibid.
179
For an elaborate discussion of the question whether there should be an international court for
cultural heritage disputes see Chechi (2013).
180
For more information about the initiative see https://www.art-law.org/en/centre/recherches/fns/
181
See Bandle and Theurich (2011), p. 31.
182
Arts Law Centre of Australia, What is Alternative Dispute Resolution (ADR)?
183
Den Hartog (2015).
litigation that this procedure provides the unique opportunity of mutually satisfac-
tory solutions beyond the remedies available in national courts.184 While litigation in
a national court may be entirely appropriate in order to establish a public legal
precedent or to clarify rights, there is good reason for parties to first explore the
possibilities of ADR. In the case of Rybolovlev and Bouvier, no matter the outcome
of the proceedings, their dispute was also fought in the public eye, and this has been
established in the minds of observers forever. In the event that parties decide to
resolve their dispute by means of ADR, the World Intellectual Property Organisation
(WIPO) provides neutral options for dispute resolution, including mediation, arbi-
tration and expert determination.185 WIPO is a specialised agency of the United
Nations with the aim of ensuring a balanced effective international intellectual
property system and is also responsible for several activities relating to the protection
of indigenous people’s cultural heritage through intellectual property.186 Moreover,
other institutions such as UNESCO and the International Council of Museums
(ICOM) have contributed to the mechanisms for prevention and resolution in the
field of cultural heritage.187 UNESCO, for instance, established Intergovernmental
Committee for Promoting the Return of Cultural Property to its Countries of Origin
or its Restitution in Case of Illicit Appropriation (ICPRCP), an intergovernmental
body that deals with disputes falling outside the scope of the 1970 UNESCO
Convention.188 In addition, ICOM encourages the policy of alternative dispute
settlement in the area of restitution. To this end, ICOM partnered with the WIPO
ADR Service to launch the ICOM-WIPO Art and Cultural Heritage Mediation
Program, a special mediation process aimed at facilitating the settlement of cultural
heritage disputes.189 Another step in this direction was taken in June 2018 when the
non-profit Authentication in Art and the Netherlands Arbitration Institute launched
the first arbitration court that is solely dedicated to the resolution of art-related
disputes.190 Before discussing the rules and procedures of this Court for Arbitration
184
Ibid.
185
For the WIPO Alternative Dispute Resolution for Art and Cultural Heritage see http://www.
wipo.int/amc/en/center/specific-sectors/art/ [last visited March 30 2022].
See also Theurich (2010), p. 570.
Moreover, also the Arts Law Centre of Australia provides comparable guidelines, see https://
www.artslaw.com.au/info-sheets/info-sheet/arts-laws-alternative-dispute-resolution-guidelines/
186
Ibid. See also Jane E. Anderson, Alternative Dispute Resolution for Disputes Related to
Intellectual Property and Traditional Knowledge, Traditional Cultural Expressions and Genetic
Resources, WIPO, Background Brief No. 8, available at http://www.wipo.int/edocs/pubdocs/en/
wipo_pub_tk_8.pdf [last visited March 30 2022].
187
See generally Chechi (2014) in Lenzerino and Vrdoljak (eds) (2014), pp. 249ff.
188
Ibid. p. 251.
189
ICOM, ICOM and WIPO to Join Forces in Cultural Heritage and Museum Fields, May 3, 2011,
available at: http://icom.museum/press-releases/press-release/article/icom-and-wipo-to-join-forces-
in-cultural-heritage-and-museum-fields/L/0.html [last visited March 30 2022].
190
Grant (15 May 2018).
in Art, the next sections will briefly outline the general aspects of two traditional
alternative dispute mechanisms, mediation, and arbitration.
4.8.1 Mediation
Mediation is a type of dispute resolution that encourages parties to develop possible

settlement options and to negotiate an acceptable resolution.191 Unlike a judge, a
mediator is an impartial intermediary who helps to find a solution and who records
the settlement in an enforceable contract. Importantly, a mediator cannot impose
decisions and settlement only occurs if the parties agree. This is one of the principal
characteristics of mediation, namely that parties cannot be forced to accept a
solution; a mediator just assists them in reaching a settlement.192 In line with this
non-binding nature, parties are free to abandon the process at any time. As noted
earlier, mediation is a confidential procedure: parties cannot be compelled to disclose
information and if a party, nevertheless, discloses confidential material, that infor-
mation cannot be made available to third parties or used in subsequent court
litigation.193 In addition, mediation is interest-based: in contrast to court litigation
or arbitration, parties can be guided by their business interests and are not confined to
the facts of the dispute and the applicable law.194 As such, parties are able to choose
an outcome that is oriented “as much to the future of their business relationship as to
their past conduct”.195 Lastly, because mediation is non-binding and confidential, it
involves minimal risks for the parties. Instead, it generates significant benefits, even
if parties do not reach an agreement, since parties must define the facts and issues of
their dispute, thereby preparing the ground for subsequent arbitration or court
proceedings.
4.8.2 Arbitration
Arbitration is perhaps the best-known alternative to court litigation. In this process,

the dispute is submitted to an arbitrator for a binding decision.196 In contrast to the
informal procedure of mediation, arbitration produces a binding solution and a party
191
What is mediation? Guide to WIPO Mediation.
192
Ibid.
193
See WIPO Mediation Rules, available at http://www.wipo.int/amc/en/mediation/rules/index.
html [last visited March 30 2022].
194
See the WIPO Arbitration and Mediation Center’s Guide to WIPO Mediation.
195
Ibid.
196
WIPO Arbitration and Mediation Center, Guide to WIPO Arbitration, p. 3. See generally Bennet
(2002) and McIlwrath and Savage (2010), pp. 14ff.
cannot unilaterally withdraw from arbitration.197 However, under the WIPO Arbi-
tration Rules, the parties are able to choose the arbitrators together or alternatively,
can ask the WIPO Arbitration and Mediation Center to suggest potential arbitrators
with relevant expertise.198 Moreover, arbitration is neutral in the sense that parties
can choose the applicable law and venue of the arbitration, is confidential, and the
decision of the arbitral tribunal is directly enforceable.199
4.8.3 AiA/NAI Court of Arbitration for Art
The Netherlands Arbitration Institute and the non-profit organisation Authentication

in Art partnered to establish a first-of-its-kind mediation and arbitration tribunal, the
Court of Arbitration for Art (CAA) in The Hague.200 Scheduled to open in June
2018, the court’s aim is to speed up the process of settling art-related disputes and to
make it less costly. Authentication in Art will provide the expertise in questions
relating to authentication, attribution and provenance research and New York- based
lawyer William Charron, founder of the CAA, put together a team of lawyers
specialised in art law.201 The CAA will handle disputes concerning fraud, contracts,
copyright, restitution, authenticity and ownership and if necessary, will appoint
neutral experts in specialist areas.202 Though the CAA is based in The Hague, it
will conduct hearings anywhere in the world. As mentioned before, confidentiality is
perceived as the main benefit of arbitration: outsiders and the public do not even
learn of a problem, let alone how it is solved.203 A telling example was the dispute
regarding Gustav Klimt’s Adele Bloch-Bauer which was subject to a very public
2004 U.S. Supreme Court case and subsequent movie about the legal fight.204
Moreover, several cases have shown that courts are not always well equipped to
deal with art-related matters, especially when authentication is concerned. An
arbitrator’s ruling thus offers the parties to settle their dispute in quiet, without
197
McIlwrath and Savage (2010), p. 20.
198
The Center maintains an extensive roster of arbitrators with different expertise and skills.
199
WIPO Arbitration and Mediation Center, p. 18 and p. 33 and McIlwrath and Savage (2010),
p. 20. National courts must enforce international awards under the New York Convention, to which
more than 140 countries are parties. See also Andreides (2017), p. 9.
200
Grant (May 15, 2018).
201
Brown (May 9, 2018).
202
Katz (May 11, 2018). The Authentication in Art Board compiles a pool for both arbitrators and
experts which can be appointed. See Authentication in Art and Netherlands Arbitration Institute,
AiA/NAI Court of Arbitration for Art Adjunct Arbitration Rules, April 30, 2018, p. 8, available at
https://pryorcashman.gjassets.com/content/uploads/2020/03/CAA-NAI-Authentication-in-ART-
Official-Rules.pdf [last visited March 30 2022].
203
Gilbert (7 May 2018).
204
Republic of Austria v. Altmann, 541 U.S. 677 (2004) and the movie Woman in Gold (2015).
See further Hess (2005) Bachmann et al. (2005), pp. 257ff and Murray (2004), p. 301.
publicly damaging their reputation or the reputation of the object concerned. It is for
this reason that most auction houses require clients to agree that any dispute must
first be resolved by mediation; if the dispute is not settled within 30 days, it is
referred to and finally settled by arbitration.205 In addition, a specialised court offers
the advantage of providing expertise which is generally absent in courts that usually
deal with more general areas of law. It is therefore hoped that the CAA will produce
decisions that the market accepts. After all, art practitioners are better positioned to
evaluate the evidence.206 However, given that the CAA will work in privacy and
confidentiality, it cannot be expected to produce public high-profile decisions as its
successes will remain confidential.207
4.8.4 Expert Determination
Thirdly, binding expert determination is an ADR process, in which a neutral third

party, chosen based on specialist qualifications or experience in the subject matter of
the dispute, evaluates the dispute and makes a binding decision with contractual
effect.208 In contrast to arbitration, the binding expert determination cannot be
appealed. Again, a party is not allowed to unilaterally withdraw from the process.
The expert in question is, however, selected in a joint process and the WIPO Center
is also able to propose experts with specialised knowledge relevant to the dispute at
hand.209 Comparable to the other two mechanisms, expert determination is confi-
dential, but flexible as it can be used in connection with arbitration, mediation or a
court case.210 In addition, there is also the possibility of non-binding expert valuation
in this process: an ADR practitioner with expertise in the subject matter can evaluate
the facts of the dispute and advise on possible outcomes.211 While the conclusions
are not binding, they can nevertheless help parties to re-evaluate their positions and if
no agreement is reached, do not preclude litigation or other forms of ADR.
205
For instance, see Christie’s Terms and Conditions, https://onlineonly.christies.com/terms-and-
conditions/43 [last visited March 30 2022] or Heritage Auctions, Terms and Conditions, para.
45–51.
206
To safeguard the quality of the evidence, experts are chosen from the Expert Pool, which
includes art historians, provenance researchers and forensic scientists. See Authentication in Art
and Netherlands Arbitration Institute, p. 9.
207
Cf. the highly publicised cases of Bouvier v. Rybolovlev and Gagosian.
208
WIPO, What is Expert determination? See also Arts Law Centre of Australia, Alternative
Dispute Resolution: Binding Expert Determination and Non-Binding Expert Evaluation, Informa-
tion Sheet (2016) available at https://www.artslaw.com.au/images/uploads/NEW_ADR-_binding_
expert_dermination_and_non-binding_expert_evaluation.pdf [last visited March 30 2022].
209
Ibid.
210
McIlwrath and Savage (2010), p. 182.
211
Arts Law Centre of Australia, Information Sheet (2016), p. 2.
Apart from the obvious advantages that the mechanisms of ADR offer, it is also
argued that these evident benefits are only of theoretical nature for some types of
art-related disputes.212 With the often international scope of disputes, establishing
jurisdiction is crucial and therefore, only well-drafted and enforceable ADR clauses
can represent adequate solutions. As regards the role that experts assume in this
regard, it is argued that “the skills which make for a good attributor do not
necessarily make for a good adjudicator”.213 Therefore, parties do well to accept
advice from the WIPO Center or even have the latter appoint the mediator, arbitrator,
or expert. Another criticism relates to the fact that arbitration is expensive and time-
consuming.214 However, employing the Rybolovlev v. Bouvier case as an example
yet again, this criticism seems to be waning: with multiple jurisdictions and hence a
plenitude of legal experts involved, it is hard to imagine how arbitration could have
been even more cost- and time-intensive.
Strikingly, one of the major contemporary restitution cases was resolved
through ADR: the case involved Maria Altmann’s battle to recover six Gustav
Klimt paintings,215 formerly owned by her uncle Ferdinand Bloch-Bauer, which
were confiscated by the Nazis and later resurfaced in Austrian museums.216 After
years of litigation between Maria Altmann and the Austrian government, the parties
agreed to initiate binding arbitration proceedings. Before, the Austrian government
had rejected her proposals for private arbitration and since litigation in Austria
proved overly burdensome, Altmann brought her case in a Los Angeles Federal
District Court.217 In 2004, the U.S. Supreme court eventually cleared the way by
deciding that Foreign Sovereign Immunities Act applied retroactively and hence,
Austria was deemed not immune from litigation.218 The decision authorised
212
Andreides (2017), p. 9.
213
Bryne-Sutton (1998), p. 447.
214
Andreides (2017), p. 10.
215
These were the paintings Adele Bloch-Bauer I, Adele Bloch-Bauer II, Apfelbaum, Buchenwald/
Birkenwald, Häuser in Unterach am Attersee and Amalie Zuckerkandl.
216
Bandle and Theurich (2011), p. 37.
217
Altmann v. Republic of Austria, 142 F. Supp. 2d, 1187, 1196 (C.D. Cal. 2001). See further
Chorazak (2005).
For instance, Austrian civil procedure provides that the claimant must prepay an advance on the
litigation fees, namely 1.2% of the amount in dispute. Since the value of the disputed painting
amounted to $150 million, Altmann would have been required to make an advance payment of
about $1.8 million, a sum she was unable to pay. See Hess (2005), p. 42.
Altmann had voluntarily dismissed her case in Austria because of the Austrian rule which
stipulates that the court costs are proportional to the amount in dispute. Since the paintings were
valued at about $135 million at the time, the filing fee would have been $1.5 million. See further
Brower (2005), p. 236.
218
Republic of Austria v. Altmann, 541 U.S. 677 (2004); and Brower (2005), p. 236. The U.-
S. Supreme Court held that the Foreign Sovereign Immunities Act also applies to claims predating
Altmann to proceed with the civil action against Austria before the Los Angeles
court and afterwards, also Austria agreed to submit the dispute to private arbitration
in Austria, thereby avoiding litigation in a Los Angeles district court.219 In 2006, the
arbitral tribunal decided in favour of the Altmann family and ordered the Austrian
government to return the paintings to the family.220 Also, this case took place in a
multijurisdictional context and with the involvement of a state institution, “the
negative repercussions of litigating such profoundly moral and strategic cases are
not negligible”.221 While the Altmann case is hoped to be a strong incentive for
owners of looted art to resolve their conflict in amicably, the same can be said for
parties to a dispute in authentication matters.222
In 2010, the UNESCO Intergovernmental Committee for Promoting the Return of
Cultural Property to its Countries of Origin or its Restitution in Case of Illicit
Appropriation (ICPRCP) adopted Rules of Procedure for Mediation and Concilia-
tion for the resolution of requests for the return or restitution of cultural property.223
These Rules provide mediation and conciliation procedures to be used by
UNESCO’s members. Moreover, it was concluded that ADR is on the rise in the
art and cultural heritage sectors and with more stakeholders becoming aware of their
potential, there are more ADR options available worth exploring.224 It is therefore
hoped that also parties to an authentication or attribution dispute will realise this
potential and will employ such mechanisms to resolve their case efficiently. The
advantages are manifold and with the current freeze in scholarship and courts’
inability to intervene accordingly, the options which ADR mechanisms offer are
well worth exploring.
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219
The parties agreed that they will accept the decision of the arbitration panel as final and without
any right of appeal.
220
Ibid. p. 45.
221
Bandle and Theurich (2011), p. 38.
222
Bazyler and Kearston (2004), pp. 11–25.
223
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224
Ibid.
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Chapter 5
Conclusions and Recommendations
5.1 Conclusions
The overall aim of this study was to analyse current practice and recent develop-
ments in the art market, especially with a view to art experts’ roles in the context of
authentication and attribution. The time has come to draw some conclusions based
on the research and data presented in the previous chapters. Part 1 of this last chapter
concludes the critical assessment of the peculiarities and current practices analysed.
Part 2 presents recommendations and proposals for reform, while part 3 is a final
reflection in the form of an outlook dedicated to an issue too vague and uncertain to
have been integrated in the previous chapters, but which might be of great relevance
for the future course of the debate on authentication, namely the relativity of
authenticity and what is more likely than not.
5.1.1 Main Findings from the Previous Chapters
The preparatory framework in the first two chapters focused on recent developments
in the art market that brought attention to the shortcomings of its traditional
structures and practices. In this context, the research concludes that the art market’s
current standard in matters of authentication merits being reconsidered and subse-
quently discusses how its structures can be standardised and improved. The concepts
of trust, uncertainty, and economic efficiency go in hand with aspects such as
valuation and authentication. Lately, connoisseurs, art historians and authentication
boards have increasingly come under pressure and as a result, no longer fulfil their
traditional roles as central point of reference in research. This development severely
threatens the market’s proper functioning in the realm of authentication.
Moreover, the analysis of statutory law and case law from different jurisdictions
demonstrates that courts are not adequately equipped to adjudicate and intervene in
300 5 Conclusions and Recommendations
these cases, either in matters of authentication or in cases of expert liability. Such

disputes force courts to distinguish between market-specific factors that lack a clear
definition and ultimately, courts have proven to be unable to override the market’s
consensus regarding authentication and attribution authority. With these issues in
mind, the proposed outlines are aimed at establishing a formal framework that
introduces and maintains quality and uniformity in the authentication process, well
before any potential dispute arises. The implementation of these novel practices
should come from within the market, thereby ensuring that they enjoy all partici-
pants’ acceptance.
To begin with, this study opened with a description of the art market’s peculiar-
ities, the mechanisms and lack of mechanisms to determine value and prices, the
complexities of determining authenticity, and certain threats to the art business. All
these aspects are prerequisites to understand why the question of how to regulate the
art market arises and why giving a conclusive answer to this question is so complex.
While artworks can now commonly represent a value which was traditionally only
associated with real estate, the need for regulation is becoming increasingly pressing.
After all, immovable property and other highly valuable goods must be registered
and certain other safeguards apply, neither of which are to be found in the art market.
Although the concept of acquiring art for investment purposes was originally
rejected, it is nowadays safe to claim that such investment has achieved the status
of respectability. Art is seen as a complementary asset to a traditional investment
portfolio and is also advertised and marketed as such. However, the market’s
notorious opaqueness prevents it from developing into a proper investment class:
investors must be able to assess at least the net value of their holdings, but with the
market resisting disclosing even basic information, there is a lack of verifiable and
meaningful data that would allow for comparisons.
Therefore, there is no level playing field as the market thrives on the asymmetry
of information. While this is increasingly being challenged by the growth of
information technology, there is still a large body of powerful players who prefer
to preserve the status quo. Regarding the further development of art as a financial
asset, it is suggested that in order to attract a wider audience of retail investors, there
needs to be some form of regulation, otherwise the market will continue to be
perceived as “an exclusive playground for the wealthy”.1 The extensive research
conducted by Deloitte/Art Tactic found that also market operators agree on the need
to take self-regulatory action in order to balance reaching a coherent and coordinated
industry standard without reducing the market’s competitiveness. Generally, there is
consensus that authenticity, lack of provenance and forgery are perceived as the
biggest threats to credibility and trust in the art market. It furthermore became
apparent that the value of an artwork is assessed on the basis of the artwork’s
aesthetic appeal as well as on its authenticity; a condition which is implicit in any
appreciation. While forgers have made such a determination of authenticity
extremely difficult, it remains of paramount importance to ascertain a work’s
1
Gerlis (2014), p. 42.
5.1 Conclusions 301
genuineness. As has become clear, neither art experts or technical means are
infallible, nor is the courtroom an appropriate instance to give a definitive and
final ruling on the question of authenticity. In part, some market participants already
have a rich history of self-regulating organisations in form of dealers’ trade associ-
ations which hold their members accountable via codes of ethics and such an
approach is also suggested for the profession of art experts. The establishment of
an umbrella organisation which combines the knowledge of scientists, scholars and
art historians would be a good starting point to make customs in the art trade more
transparent, credible and reliable and likewise, to make forgers’ lives harder. It could
set a standard level for authentication and the issued expertises would be the result of
collective consultation rather than of individual conclusions. Such expertises would
capture a more profound status and thus, would have the potential of limiting legal
disputes over authentication. Because in the end, since the art trade’s credibility is
also based on trust in the effectiveness of its authentication processes, this is relevant
not only for the functioning of the market itself, but also for the integrity of cultural
heritage in general. The question of regulation is often countered with the assertion
that more rules, increased transparency and reliance on established industry stan-
dards would damage the market’s operation. However, many aspects discussed so
far seem to validate the thesis that its operation is already hampered: the art market is
characterised by a great economic inefficiency, which is reinforced by a freeze in
authentication processes and scholarship as well by the numerous disputes between
dealers and their clients. Efficient markets require the flow of plentiful, easily
accessible information.
Yet, the art market’s culture encourages market participants to proceed with the
utmost secrecy and to withhold or distort information. In recent times, the highly
publicised scandals discussed in this study have raised these issues among art market
operators and the public regarding the market’s reputation and operation. While
collectors have a profound interest in the well-functioning of the art market in the
sense that prices are reasonable and justified and that authenticity is beyond dispute,
auction houses’ business practices (especially third-party guarantees) are said to add
to the opaqueness of the market. Similarly, dealers’ businesses are also rife with
suspicion: dealers are free to determine prices as there is no general set of methods or
methodology against which to evaluate prices and moreover, in a transaction, neither
the price nor the parties involved may have been disclosed. In addition, it is a major
concern that dealers apparently frequently enter into conflicts of interest when
representing both the seller and the buyer in a deal—this was illustratively demon-
strated by the Gagosian/Cowles lawsuit. On top of that, this practice is currently not
adequately being tackled as legal disputes are primarily settled privately, thereby
denying courts the possibility to render a judgment on the question of when such
methods cross the border demarcating legal and become illegal. However, this
deficiency is not caused by a lack of legal rules, but rather by a lack of enforcement
and by the ignorance of the parties involved. Consequently, only participants in the
art business itself can change this attitude, while external mechanisms of regulation
are in this context less likely to be successful.
In addition, advances in technology and globalisation may be seen as develop-

ments that are not welcome, such as more information on transactions and prices
being made available. Unlike other markets, where these dynamics create more
efficiency due to an increased flow of information and wider distribution, the art
market struggles to adapt its traditional, centuries-old mode of operation to these
new channels. Just as counteracting the market’s inefficiencies, meeting the demands
of globalisation and technology does literally not seem to be in the interest of most of
its players. Gerlis confirms that the only area that seems to have raised “governmen-
tal flags” is that of money laundering.2 However, in a market which is prone to fakes
and forgeries undermining its proper functioning, it is remarkable that important
aspects such as authentication are still in the realm of subjective opinion-making. As
a result, the adoption of clear standards and best practices would be in the interest of
all players. Therefore, substantive reforms are increasingly advocated for to remedy
the common practices that lead the trade into a state of market failure. In the end,
uniform regulation within the art trade and especially within the field of authentica-
tion will offer a valuable tool and opportunity to curb fraud and forgery. In recent
times, there has been an increasing focus on how to improve the control mechanisms
of the art market: the Basel Art Trade Guidelines laid the basis for an industry-wide
initiative to collectively combat questionable business practices and to foster fair and
efficient competition. However, self-regulation is non-binding and often regarded as
no regulation at all.
Moreover, the fact that most of the market’s participants point to the lack of
transparency, but still operate in and make use of this opacity can be seen as
indicative of the challenges. Hence, the threats identified are rooted in participants’
behaviour and due to the fact that they are self-inflicted, there is less initiative to
eradicate them.3 Generally, lack of transparency creates a more hospitable climate
for forgery and other illegal activities, while opacity related to pricing encourages
insider trading and conflicts of interest; both are not necessarily apparent to market
participants but threaten the operation of the market and its underlying structures.
After all, the art market has always had a culture of secrecy which contributed to its
identity and uniqueness. Yet, despite the allure of secrecy, an increasing number of
market players are now becoming aware that the drawbacks of this system might
outweigh its benefits. In the current climate, however, participants should be
expected to be more alert to red flags. The reliance on trust and opacity has led to
many title- and authenticity-related problems that have significantly impeded the
trade. However, it is difficult to imagine how this scenario can change without the
support of the market’s major stakeholders. In line with the suggested proposals, it
will be experts and collectors’ task to insist on the implementation of industry
standards: all market participants should be aware of the many possibilities and
2
Ibid. p. 19.
3
Deloitte | ArtTactic (2016), p. 147. According to Pierre Valentin, the market thrives on these
behaviours as they contribute to generating significant wealth, particularly at the top end of the
market.
5.2 Proposals for Reform 303
reasons to conceal certain information and therefore clients should insist on a

contractual basis for the transaction and in the future, should consider it mandatory
that high-value artworks are accompanied by a report stating the results of stylistic
and scientific enquiry, preferably issued by a panel of experts who operate under an
umbrella organisation.
As regards the final remedy in cases where parties are unable to reach an
agreement, the mechanisms of ADR represent suitable ways of addressing the
particular features of disputes in the context of art. Moreover, it is recommended
that theoretical considerations developed in the work of WIPO, the Geneva Art-Law
Centre or the Authentication in Art workgroups will be more relevant and find
increased application in practice. In the end, the fact that the art market is sometimes
considered to be “a rich man’s sport” or a fancy market for the privileged few and
therefore less worthy of attention, should not lead to the automatic conclusion that
the market’s inefficiencies can be set aside because any repercussion is only suffered
by the top one or two percent of the wealthy. For such a sketchy and superficial
conclusion, art is simply too valuable, not only as an economic asset but as an
enrichment for society as a whole and as a transmitter of cultural history and
heritage.
5.2 Proposals for Reform
It is argued that the current legal regime reinforces the inefficiencies of the art
market: art market players are either inclined to conceal key information regarding
value, authenticity and provenance or to release information when in peril. More
specific, authentication is said to have fallen into increasing disrepute, as it is
associated with conflicts of interest, market manipulation and the supposedly arbi-
trary nature and snobbery of connoisseurship. Moreover, the high-profile disputes
involving, among others Werner Spies, have conveyed the impression of an obscure
territory inhabited by self-proclaimed experts with no set of objective criteria.
Therefore, authentication comes down to a chaos of approaches, ranging from
arbitrary pronouncements to scientific analysis. Explicitly, authentication boards
and artists’ foundations are described as unaccountable cabals of experts that
establish themselves as the single point of reference in matters of authentication.
With this in mind, where can concerned parties—ranging from owners, sellers,
buyers, auctioneers and dealers—turn for independent and reliable advice? It is
clearly desirable that measures should be envisaged that bring order and method
into this status quo. With regard to experts and authentication boards, the diverse
market participants would need to join forces and commit themselves to clear
standards that can live up to both commercial and academic requirements. To this
end, the following part proposes the establishment of an umbrella organisation for art
experts, taking into account and assessing already developed initiatives such as the
International Foundation for Art Research (IFAR) and suggestions made by the
Authentication in Art workgroups.
5.2.1 Experts and Authentication Boards
A primary reason for the current barriers to information flow and the resulting market
inefficiency is that disappointed owners increasingly choose to file lawsuits against
experts and authentication boards that rendered unfavourable opinions on their
artworks. As a result, concerns about legal liability cause experts to withhold their
opinions altogether, leading to a state of failure in the market, which heavily depends
on the flow of meaningful information.4 On the other hand, providing full immunity
for experts’ opinions is likely to have an adverse effect since experts would have
little incentive to provide better structured and reasoned evaluations, something
which is desperately needed on various sides of the market. It is therefore suggested
that experts should be better organised, professionalised so to say, in an overarching
organisation that contributes to more formalised and standardised authentication
procedures, thereby increasing the processes’ legitimacy and credibility. To this
end, the following section discusses umbrella organisations that are considered to be
capable of bringing improvements to the current freeze in authentication matters.
5.2.2 Umbrella Organisations
There is consensus in the literature that a better authentication system would have to
be based on clearly defined and consistent procedures.5 While umbrella organisa-
tions already exist for museums, galleries and academics, the question arises whether
there could be a role for a new body, with established criteria and standards, that
monitors the quality of the authentication process. For this purpose, O'Connor
envisions a pool of experts, including art historians, scholars, appraisers, collectors,
dealers, auction house specialists and curators from which panels would be formed
to review artworks and publish well-reasoned opinions.6 This is supported by
Orenstein who argues that the most efficient way to address forgeries and mis-
attributions is by sharing specialists’ observations on a large scale, with such
exchange enabling and encouraging a re-evaluation of each other’s assessments.7
The members would be approved by an independent advisory committee which
would also be responsible for administering the services offered by the advisory
panels experienced in the various aspects of the authentication process: after their
qualification, credentials and experience have been established, scholars would be
able to join this entity as experts.8 In addition, those holding a droit moral could
4
Day (2014), p. 489.
5
Ibid. and O’Connor in Spencer (2004), p. 23.
6
O’Connor in Spencer (2004), p. 23. This is reminiscent of de la Faille's proposal in 1924 to
establish official authentication bureaus, cf. Tromp (2010), p. 34.
7
8
O’Connor in Spencer (2004), p. 23.
transfer their authentication right to the organisation for a fee. One of the major
advantages is that with such an umbrella organisation, a decision is no longer taken
by a single expert in a manner that he might deem reasonable, but which the public
might perceive as arbitrary. However, to make such a structure possible, the art
market and its major players would have to surrender their insistence on a single
expert authority in issues of authentication and attribution.
Currently, there is no standard to be followed in order to become an expert.
Instead, it is the market’s interaction that jointly decides which expert enjoys the
highest authority. An umbrella organisation would finally be able to establish actual
authority, based on objective parameters, with the consequence that anyone consult-
ing an expert associated with the organisation would not have to worry about his
qualification or impartiality. While today’s system rarely provides clues about the
credibility of an opinion, the suggested umbrella organisation would be able to
provide means by which parties can have a work’s authenticity assessed, without
incurring substantial costs trying to gather relevant information themselves.9 With
regard to funding, it is suggested that the organisation would receive contributions
from auction houses, museums and dealers as well as a fee from anyone requesting
its services and expertise. However, O'Connor also admits that such an organisation
would be “difficult to establish and expensive to maintain” but in view of “the
current procedural chaos [. . .] and the cockeyed connoisseurship imposed by the
courts in a crunch, the expenditures would be worth it”.10 Beyond this, one concern
remains: how can such an organisation shield itself from potential lawsuits? Given
that such an umbrella organisation would be completely independent, without any
interest in the respective artists’ markets, claims such as brought in Simon-Whelan
v. The Andy Warhol Foundation for the Visual Arts would lose their grounds. Since
the majority of former authentication boards were based in the United States, most
cases were brought under this jurisdiction and hence, it is stressed that all of the
organisation’s experts should enjoy immunity from defamation of title and product
disparagement lawsuits.11 Moreover, it is suggested that the organisation should
partly shield its members from liability by arranging for insurance. As the umbrella
organisation would only constitute the framework under which the scholars jointly
operate, the organisation itself is less likely to become involved in a lawsuit.
And by providing insurance to its members, the threat of liability would likewise
be reduced. An added benefit would be that such an organisation would have a better
standing in negotiating the insurance terms beforehand. In addition, and this could
find application in all jurisdictions concerned, the business terms of the organisation
should include the provision that aggrieved owners can only allege fault in the
9
Day (2014), p. 491. Referring back to the BAT Guidelines and their provisions on enhanced due
diligence, the tasks described already give an insight into the amount of time and costs involved:
from consulting additional experts, databases, registers and listings to attempting to research a
seller's previous trade activities; none of these activities can be executed without the insurance of
substantial cost and time investments, possibly even with the support of a third party.
10
O'Connor in Spencer (2004), p. 23.
11
Day (2014), p. 490.
process by which the expert authenticated or attributed the work, but not in the
substance of his judgement.12 The organisation would then be in charge of register-
ing and recording all dissenting opinions and making them available to parties
having an interest in the respective work. Finally, the organisation would be
expected to develop standards of analysis to which its members must adhere.
Therefore, the next section discusses the extent to which IFAR, the International
Foundation for Art Research, could serve as a prototype for an umbrella organisation
with regularised standards.
5.2.3 The International Foundation for Art Research

(IFAR): A Prototype for an Expert Umbrella
Organisation?
Unlike the numerous authentication committees previously mentioned, the Interna-

tional Foundation for Art Research (IFAR) is the only institution that takes up
questions of authenticity on the work of a large number of artists.13 The Foundation
was established in the late 1960s in the wake of several major art fraud cases that
shook public confidence in the art market.14 Envisaged as an authorative, objective
and not-for-profit organisation, IFAR was created to serve as a bridge between the
public and specialists and to render the most authoritative opinion.15 Beyond this,
IFAR’s approach to authenticity and attribution research is based on the three well-
known pillars of connoisseurship, scholarly documentation (provenance and other
historical evidence), and physical and technical examination.16 At first, each and
every work was subjected to technical analysis, but over time, the approach became
more selective so that more costly and time-consuming procedures are now reserved
for cases where alternative methods do not produce a conclusive answer.17 Clients
submitting their works for research have to bear shipping, insurance and laboratory
fees and of course, a fee for the service—a fixed amount, irrespective of the finding
on authenticity. IFAR charges a non-refundable $400 deposit at the enquiry stage
and an additional cost of $3,000 when IFAR undertakes the research.18
Additional expenses may be incurred for technical analysis. However, what might
be perceived as a drawback when it comes to its model function as an umbrella
organisation of experts is the fact that experts can remain anonymous. In fact, prior to
12
Ibid.
13
Fletcher in Spencer (2004), p. 95.
14
See further https://www.ifar.org/ [last visited March 30 2022].
15
16
Ibid. p. 98.
17
Ibid.
18
See IFAR’s Authentication Research Service: https://www.ifar.org/authentication.php [last vis-
ited March 30 2022].
1976, all specialists’ names were kept confidential.19 While IFAR publishes a report
with the opinion and an outline of its underlying reasons, the authority behind the
decision remains unknown. Moreover, if an authentication committee for the respec-
tive artist exists, IFAR will refer clients there. But with the disbanding of numerous
authentication boards, problems arise when experts refuse to share their expertise
and data. The same holds true if other experts do not support IFAR’s efforts: in such
cases, the Foundation must refuse to take on an enquiry. In order to avoid liability,
clients must waive the right to sue IFAR, must acknowledge IFAR’s right to
withhold the names of the experts and finally, permit IFAR to publish the results.20
Without these preconditions, the added benefit of an umbrella organisations such as
IFAR would be non-existent. As regards the waiver of liability in particular, it is
important to ascertain in how far these clauses have third party effect. In principle, if
an opinion was not solicited by the owner and hence, the contract of mandate was not
made between an expert and the owner, the owner is not bound by the waiver clause.
However, IFAR’s terms of business stipulate that a contract must be signed by the
owner before a work is examined. Therefore, a waiver of liability is enforceable is
these cases.
5.2.4 Guidelines and Standardised Procedures
As regards the operation of an umbrella organisation, it is a prerequisite that its

members adhere to well-structured and standardised guidelines which are tailored to
their practices and publicly communicated. According to Martin Kemp, it is evident
that there should be common protocols in the art world. Kemp stresses that, at the
moment, “each of the professional cadres prioritise the expertise regarded as stan-
dard in their own area of operation, without any clear sense how the status of their
criteria relates to the status of other modes of making judgements”.21 This means that
the different authentication methods should be reconciled according to clear struc-
tures: currently, the commercial world accords connoisseurship a high priority, while
science is still seldom of importance in authentication matters. Moreover, since one
piece or kind of evidence is rarely decisive in a positive manner, an interdisciplinary,
multi-facetted approach is essential for authentication, but “simply throwing all the
available methods at an item will not work”.22
Therefore, established procedures must consider what each method can provide
within the parameters of its competence and at least as important, what each method
cannot legitimately do. Numerous dealers’ associations and auction houses have
already subjected themselves to in-house rules and guidelines to ensure lawful and
19
20
Ibid. p. 99.
21
Martin Kemp interviewed by Milko den Leeuw, Authentication in Art, March 2017.
22
Ibid.
ethical business practices.23 However, because of this unilateral approach, a trans-

action refused by one house may well be picked up later by a competitor who feels
committed to different business standards. An additional shortcoming is that these
instruments are of limited application: due to their territorial scope, they only apply
to certain countries and specific operators.24 As concluded before, besides the
establishment of an umbrella organisation, its members should voluntarily adopt a
code of ethics introducing standard methods and clear procedures and criteria for
their mode of operation. Such a code could be modelled on already existing
guidelines, such as the College Art Association (CAA) Guidelines on Authentica-
tions and Attributions (2009)25 and Standards for the Practice of Art History
(2014)26 or the Catalogue Raisonné Scholars Association’s (CRSA) Guidelines for
Issuing Scholarly Opinions about Authenticity.27 These codes not only stipulate
experts’ qualifications, but also specify the criteria that should be adhered to in a
report. In addition, they set a minimum standard of conduct by requiring experts to
act professionally, fairly, and without any conflict of interest. In any event, the
following aspects would need to be incorporated in such guidelines: First of all, and
this might be an obvious criterion, an expert who joins such an organisation has to be
qualified to do so, meaning that he has comprehensive knowledge of the entire body
of an artist’s œuvre.28 Moreover, it is recommended that experts only render
opinions after a written request by the owner of the work has been submitted and
after the requesting party provided the authenticators with a release and appropriate
indemnification.29 Where an expert “spots” a dubious work in a private or public
exhibition, he is advised to communicate his observations and concerns to the
museum or gallery in question. However, no opinion should be issued just because
an artwork, after simple visual inspection, does for whatever reason not “look or feel
right”. Regarding the general process, it is advised that experts examine the original
artwork in person and only in exceptional circumstances render an opinion based on
a photograph. In any event, the report must indicate the factors on which it is based,
i.e. the relevant identification data for assessing and verifying the artwork, including
media, dimension, location, mode of signature and any inscriptions on the back of
the work.30
23
24
Ibid. p. 10.
25
CAA Guidelines (October 25, 2009).
26
CAA Guidelines (October 26, 2014).
27
Catalogue Raisonné Scholars Association’s (CRSA) Guidelines for Issuing Scholarly Opinions
about Authenticity.
28
This is confirmed by the CRSA Guidelines, p. 1.
29
CAA (October 25, 2009), Section B (10).
30
See the CAA Guidelines, Section 4 and the AiA Recommendations, Sections 3.G and 3.H.
The failure to do so decreases the opinion’s credibility as probably best illustrated by the
assessment of Klaus Perl's authentication decision in Greenberg Gallery v. Bauman.
In line with the proposal to establish an umbrella organisation, the CAA’s

Guidelines on Authentications and Attributions confirm that “art historians render
opinions, when possible, in conjunction with a group of other scholars and conser-
vators who can form a consensus as to the authenticity or attribution of an art-
work”.31 The best approach to authentication and attribution and the best defence
against litigation is thus a consensus of evidence. To reach such consensus, stylistic
connoisseurship, art historical documentation and scientific analysis must comple-
ment each other, as they are the three basic components of best practices.32 If experts
are unable to reach a consensus in their conclusion, either because of conflicting
evidence or because of dissenting opinions, their diverging considerations should be
included in the report and communicated to the requesting party. Regarding scien-
tific analysis, the selective approach taken up by IFAR should be followed: technical
analysis should be mandatory for high-value artworks which have no documented
ownership history or where the two other methods cannot come to a conclusive
answer.33 As concluded before, the cost of forensic testing should be a reasonable
fraction of the work’s value: and for a highly valuable artwork, reasonable should
mean up to ten percent of its estimated sales price. In line with recent case law on
negligence in authentication cases, it is confirmed that the level of care must
correspond to the value of the artwork concerned. Experts should know their limits
and in some cases, living up to a reasonable duty of care includes resorting to
scientific analysis.34 Regarding provenance, this should be researched, documented
and verified to the extent possible and the appropriateness of an object’s provenance
should be compared to the overall patterns of ownership of already documented
works.35
In addition, it is argued that by extensively documenting the basis for a decision
on authentication or attribution, the party requesting the analysis benefits from
having more information and hence, is more likely to forego the cost of seeking a
legal remedy.36 In addition, if the requesting party is dissatisfied, the expert’s
rationale gives him a basis from which an additional expert opinion can be evaluated.
Importantly, experts should state in any report which form of opinion has been
rendered (purely scientific, observational, historical, contextual or a combination)
and the limits of each of the tools used in the analysis. In this context, the AiA
Recommendations for Valid Written Expert Opinion and especially Sections 3.H
and 3.I could serve as a model to be followed. While experts must be aware of their
31
Ibid. Section B (1).
32
Ibid. Section B (3).
33
This implies that the artworks which played a role in the fraud cases surrounding Wolfgang
Beltracchi, Knoedler Gallery and Sotheby’s should have definitely been subjected to scientific
analysis prior to their sales. All of them were completely new to the market, with no verifiable
provenance or other documentation and were sold for substantial amounts of money.
34
Cf. the cases of Lempertz v. Trasteco and Knoedler v. De Sole.
35
Ibid.
36
professional responsibilities, there should be no obligation to act without insurance

coverage, indemnification and a signed release of all claims by the requesting party.
Finally, art market participants should ultimately accept that there may be only one
or two experts capable of giving an informed opinion in a field, while in others, there
may be many and conflicting opinions. For contemporary art, it may be difficult at
times to identify an expert at all.37 As a result, the generally recognised standard that
only the most respected expert has authority and that this creates a seemingly
“scholarly consensus” must be reconsidered.38
After all, an authority’s attribution does not imply consensus, but rather that the
market and its operators have reached consensus on a matter of authentication or
attribution. Hence, the authority’s approval of an authentication or attribution deci-
sion “weighs much more in the art market than the accuracy of the authentication and
attribution itself”.39 In this regard, experts’ commitment to standardised procedures
would finally bring much needed transparency to the process: parties would no
longer have to rely on the market-appointed authority of a specific expert, but would
instead have a consortium of experts at their disposal whose opinions are structured
in a comprehensible and traceable way. However, to ensure a baseline level of
transparency, it is recommended that, in contrast to IFAR’s mode of operation for
instance, experts’ involvement must be made public in order to give credibility to the
opinion voiced. If the umbrella organisation and the panel of experts that claim to be
a superior body with the ultimate authority in authentication matters issue opinions
without actually disclosing the authority behind them, it is highly unlikely that the
parties concerned and the market would ever buy into their reliability and legitimacy.
5.2.5 Implications for Authoring Catalogues Raisonnés
Adding to the proposal’s benefits, this new process could also diminish what is
referred to as the “tyranny of the catalogue raisonné”.40 Catalogues raisonnés
(CR) are considered to be a rather modern phenomenon, riddled with conflict-of-
interest problems and heavily affecting a work’s marketability, depending on
whether it is included in the catalogue or not. It is argued that authors are not
required to have specific qualifications, often own works by the artist in question
themselves, and thus have “incredible incentives to deny authenticity to works
37
The College Art Association (CAA) Guidelines on Authentications and Attributions (2009),
Section A (2).
38
Thaw interviewed by Spencer, in Spencer (2004), p. 73.
39
Ibid.
40
Ibid; and Findlay in Spencer (2004), p. 55. As mentioned before, in the context of forgery,
catalogues raisonnés seem to have served as guidance for forgers: including only the title of an
artwork, forgers were able to fill in the gap in documentation with their own interpretative
counterfeit version.
owned by others”.41 While the basis of the importance of catalogues raisonnés stems
from the lack of other authoritative sources of authentication and attribution, an
umbrella organisation could reduce the market’s reliance on such defective
information.
In this respect, the Authentication in Art Guidelines for Compiling a Catalogue
Raisonné (2014) aim at promoting best practices, i.e. the professionalisation and
standardisation of future CRs and raising awareness of the scholarly, scientific, legal,
financial and practical implications involved.42 Apart from stipulating general advice
on the compilation of relevant material, the Guidelines also offer proposals on
collecting data and inspecting the artwork.43 Importantly, the Guidelines also estab-
lish extensive guidance on the use of technical resources.44 In general, the Guide-
lines provide a very detailed and structured mode of operation so that the reasons for
a certain decision are clearer to third parties. Moreover, if the author of a catalogue
raisonné is asked to issue an opinion outside this scholarly context, he is referred to
the CRSA’s Guidelines for Issuing Scholarly Opinions about Authenticity. For Old
Masters paintings, the Guidelines suggest the use of different categories, ranging
from “accepted works, collaborative works, works from the studio, attributed works,
doubtful works, works not seen by the present author, rejected works, works known
from photographs, works known from reproductive prints an works known from
descriptions or other documents”, while for modern and contemporary artworks, the
CR will not make such a distinction and only include accepted works.45
Importantly, the level of certainty must be specified regarding each classification
and the type of supporting evidence used to obtain it. In general, the published CR
should be as complete and as transparent as possible, especially regarding the
methods, underlying theory and criteria for accepting works as well as self-chosen
limitations. Comparable to the issuing of expert opinion, the Guidelines also advise
the author to obtain a form of release and indemnity prior to giving an opinion and
emphasise the need to state that the opinion given is “personal and reflects the
current state of the research, and that naturally these opinions may change over time
by virtue of new insights”.46
41
Ibid.
42
Authentication in Art, Guidelines for Compiling a Catalogue Raisonné (May 2014), p. 2.
43
Ibid. p. 3ff.
44
Ibid. p. 6f.
45
Ibid. p. 10.
46
Ibid. p. 9.
5.3 Outlook: The Relativity of Authenticity and What Is

More Likely Than Not
In the previous discussion, the case Hahn v. Duveen has been often cited to
exemplify the various aspects of disputes that arise in issues concerning authentica-
tion and attribution. Even though the case was settled in 1929, many aspects are still
relevant today. In particular, Judge Black revealed deep insight into the problems
that such disputes present for the parties involved.
Giving his opinion on the case, Judge Black recognised that there might not be an
absolute truth in terms of authenticity:
A new situation exists in the world of art. Formerly the church, the state and a few powerful
men owned all the fine pictures and statuary. [. . .] As some of the owners became
impoverished it became necessary to sell their art treasures. Frequently, as antiques passed
from family to family or from government to government, their authenticity was frequently
questioned. Finally, the pendulum of artistic criticism swung slower and slower, until it
usually stopped at an opinion which remained practically standard. But it was always subject
to a renewal of criticism in books or in the press whenever a critic levelled his attacks at a
certain work. When wealth increased [. . .] new methods arose whereby careful collectors
could with reasonable certainty determine the authenticity of art objects.47
In this wording, Judge Black formulates the ephemeral nature of expert opinion and
acknowledges that it is always subject to renewal and reassessment.
Astonishingly, Judge Black also considered the amount and form of evidence
which an owner of a painting is required to present to a jury to prove that the painting
is genuine. He stated that the law should be:
[. . .] flexible enough to be just, and judicial methods and rules of evidence should in some
measure conform to existing conditions. While we cannot take things for granted, less
exactitude is sometimes required in proof now than before.48
Hence, he was aware of the problems which traditional rules of evidence and
procedure place on the presentation of evidence in authenticity disputes and shows
profound insight by acknowledging that authenticity opinions are always subject to
change, comparing artistic criticism to a pendulum. With this in mind, the idea
comes up whether authenticity can in fact be presented as a certain absolute or
whether a more nuanced approach should be advocated, in the sense that authenticity
is only expressed in terms of an opinion and not as a matter of fact. Taking this idea
to the extremes, art market participants could agree to introduce a different standard
to resolve questions of authenticity, namely, depending on the standard of proof in
civil proceedings, whether a work is more likely than not or to the highest degree of
professional capabilities authentic or inauthentic. Such an approach would anticipate
the numerous disputes about authentication and attribution and relieve art experts of
their fear of liability. This approach is supported by the following considerations:
47
Hahn v. Duveen, at 874.
48
Ibid. at 875.
5.3 Outlook: The Relativity of Authenticity and What Is More Likely Than Not 313
first and foremost, the notion of authenticity and the process of attribution and
authorship are evolutionary and fluid.49 In contrast to static principles, these con-
cepts change in capacity depending on what meaning is given to them and impor-
tantly, are a sign of their ability to pursue refinement when changes in scholarship or
other developments make it necessary. Until the modern era, copies and replicas
were seen as valuable components of art - this perception has ever since changed
with the new focus being on artworks’ creators as single artists.
Consequently, authentication in modern times means that a certain artwork is
attributed, in an absolute matter, to a single creator. In addition, connoisseurs and art
historians have long denounced the possibility of a “perfect fake”. To recall
Friedländer, forgeries carry traces of their historical origin with them and while
these are not apparent at the time of creation, they begin to stand out as time passes.
Working against these beliefs, Hebborn, Beltracchi and other twentieth century
forgers demonstrated that they could perfectly mimic the styles of artists just by
adopting their idiosyncratic languages rather than attempting to copy any existing
works. Being sympathetic to the view that the perfect fake is a real possibility, it is
time for today’s connoisseurs, historians and philosophers to stop buying into the
Romantic notion that an artist’s style embodies his personality and that no one else is
able to copy such subjective structures. Rather, the Romantic model at the core of the
paradigm is steadily dwindling: examples that illustrate the untenability of this
theory have been too numerous to be neglected. In line with this, Lenain suggests
that the existence of the perfect fake destroys the significance of a conceptual
framework altogether:
The perfect fake destroys the absolute significance of the trace paradigm both in scientific
and experiential terms – not only as far as particular objects are concerned but also with
respect to artworks in general, fake or not. Even though that paradigm is still functional in a
majority of cases, it will never be possible to consider it as absolutely applicable in any
single case: since some artworks have been subjected to perfect stylistic simulation, no
artwork can be regarded as the absolute (that is, bi-univocal) manifestation of its origin.50
Therefore, market participants involved in the authentication and attribution process

should consider that the present understanding of the underlying notions is not a
stable condition. The concepts of attribution and authorship are contentious ones and
obfuscate authenticity, thereby making the labels of either genuine or fake appear
oversimplified. A plenitude of cases has shown that experts’ conviction that forger-
ies are always detectable, due to the very nature of art, is unsustainable—at least,
with the current level of knowledge and scholarship. Therefore, it is time to develop
these philosophies further by acknowledging that in some cases, questions on
authenticity cannot be answered in the way the market and its participants expect
it. Attributions should take into account that the historical evolution of the concept of
authenticity can make a definite determination of authorship impossible and thus
should instead mirror a layered structure. Correspondingly, experts should point to
49
Demarsin, Proefschrift (2008), p. 858.
50
Lenain (2011), p. 273.
the relative notion of authenticity and should express their opinions in more
refined ways: for instance, if science confirms that the materials used in an artwork
are in conformity with the alleged date of creation, there would be no obstacle to
confirming that the painting is, or is at least more likely than not, authentic as regards
its components. Simply stating that a work is authentic or inauthentic, without even
giving explanatory documentation, will no longer do in a market where forgers are
becoming more and more skilful and clients more and more litigious.
Already back in 1929, Judge Black advised the jury to:
[. . .] be wary in accepting the conclusions of experts when such conclusions are not founded
upon knowledge, experience and study. An expert is not better than his knowledge.
Assuming that he is of equal intelligence with one who not studied or specialized in a
certain subject, his opinion is better by just so much as he has intelligently considered the
subject. I warn you that in considering the criticisms by one expert of another you will apply
the same rule that I have already given you regarding their conclusions; that is, that you will
give them weight only as they are borne out by reasons founded on facts.51
After having discussed experts’ prevalent authentication methods, it seemingly

would have been better if Judge Black had addressed his warning to the profession
of art experts instead of to the jury: over the course of time, many experts seem to
have forgotten that a certain feel or a “sixth sense” in authentication cases never can
and never will be able to substitute for facts. Lastly, “trust is a powerful band, but
when questioned can prove a rope of sand”.52 Art market participants should take
this consideration into account in future transactions and should cease solely trusting
another’s reputation or esteem—as several case studies have confirmed that such
reliance is often unsustainable.
References
Brewer J (2009) The American Leonardo: a tale of obsession, art and money. Oxford University
Press, Oxford, p 2
CAA Guidelines (October 25, 2009) Authentications and Attributions. Available at http://www.
collegeart.org/standards-and-guidelines/guidelines/authentications [last visited March 30 2022]
CAA Guidelines (October 26, 2014) Standards for the Practice of Art History. Available at http://
www.collegeart.org/standards-and-guidelines/guidelines/art-history-ethics [last visited March
30 2022]
Catalogue Raisonné Scholars Association’s (CRSA) Guidelines for Issuing Scholarly Opinions
about Authenticity. Available at https://static1.squarespace.com/static/589ddcb415d5dbf161
95ec36/t/589df664bf629a9c5e6f7318/1486747236541/CRSAGuidelines.pdf [last visited
March 30 2022]
initiative. Working Paper Series No 12, Basel Institute on Governance pp 9f
Day G (2014) Explaining the art market’s thefts, frauds, and forgeries (and why the art market does
not seem to care). Vand J Ent Technol Law 16:489ff
51
Ibid.
52
Brewer (2009), p. 2.
References 315
Deloitte | ArtTactic (2016) Art & Finance Report 2016 p 147

Demarsin B (2008) Authenticiteit en contracteren omtrent kunst: een rechtsvergelijkende analyse.
Proefschrift KU Leuven p 858
Fletcher S (2004) The International Foundation for Art Research. In: Spencer (2004) pp 95, 97, 99
Gerlis M (2014) Art as an investment. Lund Humphries, Farnham pp 19, 42
Lenain T (2011) Art forgery: the history of a modern obsession. Reaktion Books, London, p 273
O’Connor F V (2004) Authenticating the Attribution of Art: Connoisseurship and the Law in the
Judging of Forgeries Copies and False Attributions. In: Spencer (2004) p 23
Orenstein J (2005) Show me the monet: the suitability of product disparagement to art experts. Geo
Mason Law Rev 134:928f
Spencer RD (2004) The expert versus the object: judging fakes and false attributions in the visual
arts. Oxford University Press, Oxford, p 23
Tromp H (2010) A real Van Gogh: how the art world struggles with truth. Amsterdam University
Press, Amsterdam, p 34

A Regulatory Framework For The Art Market?: Anna Bolz

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Studies in Art, Heritage, Law and the Market 7

ISSN 2524-7425 ISSN 2524-7433 (electronic)

This book addresses several fascinating questions relating to connoisseurship,

Maastricht, The Netherlands Anna Bolz

1 Setting the Scene: Approach and Methodology . . . . . . . . . . . . . . . . . 1

2.4.1 The Threat of Price Manipulation . . . . . . . . . . . . . . . . . . . 84

3.6.3 Future Frameworks: Applying Antitrust Aspects of

5.2.3 The International Foundation for Art Research (IFAR):

1.1 The Unregulated Nature of the Art Market

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 1

said to include insider trading—which is considered illegal in other markets, but

1.1.1 The Concepts of Trust and Conﬁdentiality in Art

1.1.2 The Impact of Digitisation and Technology

channel.40 Nevertheless, although the reduced number of sales resulted in substantial

1.1.3 Authentication and Attribution: The Unique Role of Art

instance as dealer, scholar or auction house specialist. These seasoned connoisseurs

1.2 Current Discussions About Regulation

1.2.1 Recent Initiatives of Self-Regulatory Measures

The present situation seems to be characterised by a lack of objective standards and

1.3 The Research Task Emerging from Recent

1.4 Methodology and Delimitation

1.5 Structure of the Analysis

2.1 Introduction: The Art Market’s Structure and Its

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 23

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

fractionalised artworks.84 The company’s ﬁrst acquisition is Banksy’s Love Is in the

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

2.1.3.3 Tokenisation of Art: Blockchain as a Means of Democratising

2.1.3.4 Outlook: Many Open Questions

to create a record of sales on the blockchain, before selling it to a third party.146 It is

Twitter.161 In essence a kinetic video sculpture, the box-like structure covered in

2.2 Major Players in the Art Market

2.2.2 Art Advisors and Wealth Managers

2.2.3 Auction Houses: Guarantees and Third-Party

Abu Dhabi offers an emblematic example of this development. It is argued that

2.2.6 Practices of Dealers as Illustrated by Cases

serve as an illustration of how art market transactions can be characterised by secret

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

Collector Ronald Perelman brought another lawsuit in September 2012, claiming

million.296 As the court papers disclose, Perelman accused Gagosian of taking

R. Kapnick told Perelman and Gagosian to “get themselves together at a cocktail

2.2.6.3 Larry Gagosian v Pelham Europe Ltd.: Pablo Picasso’s Bust of a

remains unknown who was determined to be the rightful owner.318 Commentators

2.2.6.4 Yves Bouvier v Dmitri Rybolovlev: Da Vinci’s Salvator Mundi

accounts of Mei Investment to another business partner the proceeds of fraudulent

markup; however, if Bouvier was instructed to compile the collection of paintings on

2.2.6.5 Helge Achenbach v Babette Albrecht: Unauthorised Markups

2.2.6.6 Helge Achenbach v Christian Boehringer: More Hidden

2.2.7 Interim Conclusion from Case Studies

parties’ contradictory expectations regarding the prices that are to be realised.

2.4 Value, Money and Price Mechanisms: The Lack of a

knowledge, an unprejudiced attitude and a great deal of practice”.428 Whichever path

2.4.1 The Threat of Price Manipulation

This ﬁctional scenario is evocative of the ﬂipping of emerging artists at auction,

2.4.2 The Role of the Panama Papers

2.5 Art as a Financial Asset

pushed up.468 In addition, as far as the determination of high-end art prices is

2.5.1 Risks and Threats