The Cost of Reselling Artwork

Christie’s and France’s associations of antique dealers and galleries have been in a legal battle for almost a decade now. The main issue: artist’s resale rights and who must pay for them. It all began back in 2009 when Christie’s declared the buyers should pay the resale rights owed to the contemporary artists, particularly in the case of a €375m Yves Saint Laurent-Pierre Bergé sale. One of the ways the auction house justified this demand was the fact that in New York there is no such royalty included; in Britain it is up to the company in charge of the sale to make that choice; so Christie’s figured this would help collectors sell their work in France, and further stimulate the art market. Recently, the French court made a ruling that would very much change the system and shift the burden back to the seller of the work.

On March 24th, the French court declared all resale rights must be paid by sellers, with no exceptions. Christie’s is adamant about their attitude and keeps fighting the court. The auction house contests the law by suggesting it puts unwanted pressure on the French auction market and the added obligation might be prompting clients to actually consign their works elsewhere simply to avoid the undesired complexity. The Court of Appeal of Versailles stated that Christie’s manner of operating infringes on an article of the French Intellectual Property Code. Christie’s France firmly stand by their belief that the decisions of the Court of Appeal of Versailles are not legally justified, and the auction house appealed these decisions before the French civil Supreme Court.

Amidst all of this legal battling and constant firing from both sides, another important issue pops up. Bendor Grosvenor, art historian and Art History News blogger, astutely pointed out that this could open up the prospect of many thousand sales being re-worked. Should it come to that, the buyers might get refunded for if they bought an artwork and already paid the fee, selling it now, they would be obliged as a vendor to actually pay it again.

The artist’s resale rights were adopted in France back in 1920 and one of the aims was to allow the artist to benefit from the price increases in their work, particularly when it came to sudden and rapid shifts. The royalty would be passed on to the artist’s heirs for 70 years. The dealers and auction houses would always charge the fee to the buyer, until now. This law is applied in 65 countries, including the European Union members, however, with the possible Frexit in the near future, it may even further change the circumstances for France and Christie’s.

Interestingly enough, the law is not administered in the US and China, which are two major markets for living art. In the UK, the dealing and auction community hopes the ARR will go out of use after Brexit, but it remains to be seen how this tense relationship between Christie’s France and the French art market might affect other countries.

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