Hiring an Art Lawyer

The Clarion List just published an interesting post on four specific instances when a collector should consult with an attorney.  Of course the value of the work needs to be high enough to justify the additional expenses. Clarion List notes that collectors should look to attorneys when buying important works, when selling important works, when lending works and when defending a work, perhaps when a claim has been made against it.

Although not appraisal specific, having this type of knowledge base and understanding allows appraisers to discuss and refer additional services when consulting with a client.

The Clarion List reports

Sometimes, the only thing that separates a collector from a lengthy, pricey legal battle is some good professional advice. Hiring a savvy lawyer long before things get hairy can be one of the smartest, most proactive choices you can make to ensure that your art remains rightfully yours, that when you loan it out or bequeath it to an heir, the agreements align with your wishes. Lawyer Jonathan Freiman of Wiggin and Dana LLP offers a succinct explanation of when you should hire a lawyer: “buying, selling, lending, and defending.” These activities all involve risk, and a professional can help you better understand--and minimize--this risk. Of course, only some transactions / issues will merit the cost of working with one. If you’re buying a $500 photograph, for example, legal fees will probably be greater than the price of your work: not worth it. Freiman and Brooke Oliver of 50 Balmy Law P.C. offered more specifics about the cases they’ve handled and how collectors can best protect themselves in a variety of circumstances.

Here are four specific instances when consulting an attorney is recommended.

1. WHEN BUYING

If you’re buying an artwork, a lawyer can draft or review your contract with the seller, advise on title insurance, and counsel you about provenance issues that might arise. Title insurance protects purchasers against chain of title and lien risks--with a policy, you gain a clear legal title to your artwork and prevent seizure of your works. Provenance, or the record of ownership for an artwork, is a crucial concern for collectors, as it can guarantee the authenticity of a work and ensure that nothing unacceptable (theft, expropriation, etc.) previously occurred with the work. “Lawyers can consult on a wide range of things and help a collector source other professionals,” says Oliver. “We know the most qualified people in the business.” Lawyers don’t generally authenticate or appraise work, or advise on investments, but they often maintain relationships with people who do. A knowledgeable, well-connected lawyer can offer aid far beyond the scope of his or her work. Freiman suggests using art title insurance company ARIS. “You’d never buy a house for half a million dollars without buying title insurance,” he says, “but there are plenty of people who buy paintings for half a million dollars without buying title insurance. And they should.”

Also... Oliver advises against buying on eBay, where you can’t confirm whether a work is authentic. She recounts a recent case for an artist client, for whom she removed over 100 listings of counterfeit sculptures falsely attributed to the artist. “Buying art online is really ‘buyer beware,’” she says. If you’re buying a poster online, that’s one thing. “If you’re buying even an expensive digital image or a stone lithograph or a silk screen, make sure you get a certificate of authenticity.”

2. WHEN SELLING

If you’re selling a piece privately or if you’re consigning it to a private dealer, advises Freiman, you should have a lawyer either draft or review the sales or consignment contract.

3. WHEN LENDING

If you’re loaning a work to a gallery for an exhibition, Oliver warns of an often-overlooked detail. If the dealer goes bankrupt while showing your work, creditors can attempt to seize it. Your art can become a casualty of a gallerist’s financial woes. Either ask the dealer to file a UCC1 (Uniform Commercial Code-1) statement indicating that you have a security interest in the property while it’s in the dealer’s hands, or file it yourself, with a lawyer’s aid.

When consigning a piece to a dealer to sell, make sure the dealer has insurance and that your piece will be covered under it. “The collector should ask for the certificate of insurance and to be named as an insured party under the dealer’s insurance,” says Oliver.

4. WHEN DEFENDING

Freiman often works on issues regarding title claims--claims that a collector or entity (museum, foundation, etc.) doesn’t really own the artwork. He cites as one of his most famous cases a dispute between Yale and the government of Peru over artifacts from Machu Picchu. He’s also worked on issues involving Roman sculpture, Asian jewelry, Irish historical documents, Italian paintings, Native American grave repatriation, and more. These “cultural property” matters, antiquities issues, and expropriation cases investigate the past terms under which objects were acquired. What if it turns out that one of your artworks may have been looted by the Nazis or seized by a Communist government? Or what if you believe that one of your own ancestors suffered such a loss?

For analysis, advice, and perhaps eventual litigation, a lawyer is crucial. When someone makes a claim to your art, says Freiman, the most important thing to do is understand the facts and laws as well as you can. You don’t want to rush into court or make any kind of decision about settling until you consult a lawyer. “How good is their proof and what other type of fact finding can you do?” he asks. “For all of these things, you definitely want a lawyer to start with. Some claims are legitimate. Some are not.” You can’t know how to proceed--whether to attempt to compromise, or alternately refuse to speak to the claimant--until you marshal the facts.

You should also be aware of the statute of limitations, which varies from state to state. For example, says Freiman, New York’s statute of limitations does not begin to run until a person with a claim makes a demand and the person with the object refuses. In Connecticut, in contrast, the statute of limitations begins when the alleged wrong occurs. These slight differences in state law will greatly impact your case.

OTHER SCENARIOS

Oliver has advised clients on shipping matters, which she believes are part of any good art contract. She warns, as well, that it’s difficult to get FedEx, UPS, or other delivery services to pay for any damage incurred during shipping. Condition reports will help collectors confirm that the piece they’re receiving is in as good of shape as what they paid for.

Freiman addresses issues that arise with copyrights. “Copyrighting gives you permission to make reproductions, put the image in catalogs, have tee shirts and mugs made with the image, whatever you want,” he says. If this is important to you, make it clear in the contract. If you don’t bargain for this right, the artist retains rights to the image. He or she can make lithographs or other works that resemble the work that you own. Negotiation with the artist might be necessary in the case of site-specific works as well: a collector and an artist might have different ideas about how long a piece must stay in the location it was originally designed for, or how to disassemble the work after that period.

WHO TO HIRE?

So you’ve decided to hire a lawyer. Who should you choose? Freiman offers three simple considerations: specific experience, communication style, and price. “A lawyer should have experience doing the particular task that the client wants accomplished,” he says. Oliver agrees. If someone’s interested in collecting Southwest Native American pottery or rugs, for example, she says, “that’s a real specialty niche, and you would want somebody in that area who knows a lot about the trade and laws related to cultural artifacts.” She advises asking friends or acquaintances for referrals and checking Martindale-Hubbell, which gives peer ratings for attorneys. You can also discover firms on The Clarion List's database of art law firms or visit the bar website for the state where the lawyer practices to confirm that they don’t have any disciplinary action against them. Regarding communication skills, Freiman advises finding a lawyer with whom you feel comfortable, who keeps you in the loop, and maintains a flexibility that caters to your needs. You want a lawyer, he says, “who is putting herself in the client’s shoes, always asking whether this or that step is really worth it, giving the overall value of what’s at stake.”

Discover art law firms in your area on The Clarion List, the leading online resource for discovering top rated art service companies worldwide: www.clarionlist.com.

Source: The Clarion List