Monday 3 June 2013

Due regard for diligence

As a lawyer, due diligence is certainly one of my least favourite activities, but I accept that it can sometimes be crucial. This weekend, the Observer highlighted the importance of carrying out sufficient due diligence on potential art sales. It also emphasised the effectiveness of the Art Loss Register (ALR), which I discussed here back in 2010.

The Observer reports:
European auction houses, dealers and collectors are failing to make adequate checks to avoid handling stolen artworks, an art lawyer has warned after recovering from an Italian auction an old master painting taken from its British owner in a burglary more than 30 years ago.
Christopher A Marinello [the ALR's general counsel], who specialises in recovering stolen art and resolving title disputes, said: "We do find a lot of stolen and looted artwork in civil law countries such as Italy, France and Germany. Consigners of tainted works of art often try to hide behind the good-faith purchase laws of these countries while performing little or no due diligence."
He spoke to the Observer after negotiating the return from Italy of a landscape painting by Jan van Goyen, a 17th-century Dutch painter, which was stolen in 1979. Negotiations were particularly delicate because, under Italian law, if someone buys a stolen work in good faith the buyer is sometimes entitled to keep it. Marinello was able to prove to the Italian auctioneer that the painting was one of nine pictures stolen at night by criminals who broke into the home of Paul Mitchell, an antique picture frame specialist in London.
[Marinello said]: "The Italian auction house involved did not search the work with the ALR, but the dealer did. While losing out on a potential future sale, the [dealer] protected his reputation and saved himself significant sums in legal fees defending a case over title to the painting." Unless more dealers, collectors and auctioneers make such checks, he added, other stolen items will remain undetected. "It's the same concept as having a survey done prior to purchasing a home. Considering the values involved, why wouldn't you want to know if there were serious title issues before purchasing fine art?"

Source: The Observer, 1 June 2013

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