Blog Archives

Wedgwood collection available to creditors

Sad news for The Potteries, the five towns of North Staffordshire famous for their manufacture of china tableware and ceramics and the setting for most of the novels of Arnold Bennett.
Over the years, many of the works have closed and the great names disappeared, or moved production to the Far East. One famous name, Wedgwood, is still trading, but it is insolvent and there is a big hole in the workers’ pension fund. The trustees of the fund could get some relief from the Pension Protection Fund, but only after trying to get as much as possible from the Wedgwood insolvency, in which the pension fund is the major creditor.
As early as 1774, it was decided that samples of every product from the factory should be preserved and so there is a Wedgwood Museum with a fine and valuable collection.  Unfortunately, the employees of the museum were also in the same Wedgwood pension scheme, making the Museum Trust liable and also insolvent.  The question, on which the London High Court ruled yesterday, is whether the collection belongs to the Museum Trust outright, in which case it must be available to creditors, or whether it is held in trust for others, and so protected.  The court has decided that the collection is not held in trust, and so is available to benefit the Wedgwood creditors.  As a result, the collection will probably be sold.
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Art and money laundering

The bane of every English lawyer’s life is having to deal with the requirements of the Money Laundering Regulations.  These hail from the EU, but were adopted and expanded with enthusiasm by the last government. 
For every new client, we have to establish the identity of the client and, if the client is a company or trust, the identity of those who control or beneficially own the client.  Original or certified copy documents showing addresses, such as utility bills, and official photographs, such as passports, are required.  Failure to carry out these checks can have serious criminal consequences for the lawyer or those responsible for compliance, and so they can not be avoided.  For a commercial law firm with international clients it can be very difficult to identify those companies, organisations or beneficial owners, and that is particularly so when acting for the owners or purchasers of art. 
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Props in the Galaxy

In 1976 a struggling art school graduate called Andrew Ainsworth was asked to give a visual dimension to the drawings and paintings of an artist … “.  So begins an interesting article by my partner Eddie Powell concerning the recent Supreme Court decision in Lucasfilm v Ainsworth [2011] UKSC 39.
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Res Nullius?

When and where I studied law, the Roman Law course was compulsory.  In retrospect, all I got from it was a collection of Latin legal terms.  The use of legal Latin became politically incorrect in the 1990s, culminating in the Civil Procedure Rules, which even changed “writ” to “claim form“.  Perhaps a new generation of lawyers brought up on Harry Potter will restore the balance, but I digress.
A “res nullius” in Roman Law was a thing that belonged to no one, and yet, I was taught, there was no such thing in English Law, except perhaps a corpse.  If an object’s owner cannot be identified, it does not make the object ownerless, and therefore ownership cannot be acquired by the taking.  That can make some objects problematical, and one such object is on a plinth outside the Houses of Parliament.

I refer to Henry Moore’s sculpture “Knife Edge Two Piece” which is the subject of an interesting article by Martin Bailey in The Art Newspaper.

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My property litigation partner, Alison Mould, has raised an interesting point. She tells me that permission may be required for attaching art to surfaces in premises that are let to the occupant.  Substantial works will require substantial hangings.  Anything more than the odd drawing pin may involve interacting with the fabric of the building and require a landlord’s licence to alter.  Licences can take two or three months to obtain and so, if anticipating an exhibition or gallery, this is something that will need to be factored into the timetable.
There’s good reason for landlords to be concerned.  One of our construction litigation partners, Frances Alderson, has a case where a building owner innocently hung several heavily framed paintings on a wall.  What he failed to check was whether the wall had been designed to take either the weight of the pictures or the movement in the wall caused by the weight.  In the event, the movement caused cracks, giving rise to a dispute as to who was to blame – the owner, the architect or the builders.
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Droit de suite

The reports last week of the decision of the Paris High Court regarding the droit de suite (aka artist’s resale right) on the sale of certain paintings by Salvador Dali are a reminder of what is coming our way.  In less than five months the scheme will be extended to the UK, for deceased artists, under EU Directive 2001/84/EC and the Artist’s Resale Right (Amendment) Regulations.

The scheme provides for part of the sale price of works of art, sold on the art market, to be paid to the artist or his or her heirs for 70 years from the artist’s death.  The maximum amount to be paid is €12,500 per item, based on a sliding scale from 4% down to 0.25% of the price.  The UK has dragged its feet for as long as possible, with the right being introduced for living artists in 2006 and it is now to be extended for deceased artists from 1 January 2012, which will quadruple its scope.
There is a fear that the London art market will be damaged as vendors will choose to sell in countries without such a scheme, especially the US, Switzerland and Hong Kong.  That may particularly be the case where there is a collection of items to be sold.  On the other hand, selling art is expensive and the amount paid under the right may make little difference in most cases. 
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