UK Law and Practice Contributed by: Margherita Barbagallo, Sanskriti Mohta and Nilojana Nirmalan, Dragon Argent
6.3 Gallery and Auction House Liability for Fake Art Auction houses and galleries rely on provenance, exhibition history and scholarly opinion to support attributions. Specialists develop deep familiarity with an artist’s work and will consult catalogues raisonnés , foundations and estates when in doubt. However, lia - bility for inauthenticity depends on the circumstances. A distinction is drawn between forgeries, which are deliberately deceptive, and misattributions, which may be innocent, negligent or fraudulent. The contract is the starting point for determining liabil - ity. Many auction houses offer a limited authenticity guarantee, typically for a fixed period, under which the sale is cancelled and the purchase price refunded if the work is proven to be a forgery. Contracts often seek to exclude or limit liability for misattribution, though such exclusions may be tested for reasonableness under the Unfair Contract Terms Act 1977. Liability cannot be excluded for fraud. Where a seller has made an untrue statement that induced the purchase, remedies may also arise under the Misrepresentation Act 1967. 6.4 Pre-Sale Checks for Auction Houses and Galleries Before accepting a work on consignment, an auction house or gallery must verify the seller’s identity and authority to sell. This involves detailed due diligence on provenance and ownership history to ensure that the seller holds good title. Any gaps in the chain must be investigated, and the seller’s compliance with import and export rules should be reviewed. The resi - dence of the seller in a sanctioned or high-risk country will trigger enhanced scrutiny. If the work is of cultural importance, consideration must be given to whether it could have been unlawfully possessed. Authenticity must be assessed by reference to current scholarly opinion, and correct attribution is essential to avoid potential liability. This is a non-exhaustive list, but it covers the core areas of investigation. 6.5 Role and Responsibilities of an Art Adviser An art adviser typically assists clients with acquisi - tions, sales and portfolio management, advising on value, authenticity, provenance and condition, and often arranging shipping, insurance and storage.
interest over 50 years old and exceeds a specified value threshold. These thresholds vary by category: for example, a painting in oil or tempera over 50 years old has a threshold of GBP180,000, while a textile of the same age has a threshold of GBP12,000. Once an application is submitted, the Arts Council determines whether the licence can be granted rou - tinely or whether the matter should be referred to an expert adviser. If the object may be of national impor - tance, it is referred to the Reviewing Committee on the Export of Works of Art, which assesses it against the Waverley criteria: • whether the object is closely connected with UK history and national life; • whether it is of outstanding aesthetic importance; and • whether it is of outstanding significance for study. If one or more criteria are met, the export decision may be deferred to allow a UK institution to match the price and retain the object. Additional export controls may apply. The Convention on International Trade in Endangered Species requires a CITES permit if the artwork incorporates material from endangered species. The Ivory Act 2018 bans the exportation of ivory unless a narrow exception applies, and violations can lead to criminal liability. Practical considerations include reliable shipping, insurance, and condition reports to document any damage before transport. For business purchasers, an EORI number may be required for customs dec - larations. VAT implications are also significant. UK VAT is gener - ally charged at 20% by registered sellers, but if the art - work is exported outside the UK within three months of purchase the sale is usually zero-rated. Import VAT may be payable in the destination country. For imports into the UK, a reduced rate of 5% typically applies. All shipping documents, airway bills and customs dec - larations should be retained as they form part of the due diligence chain for any onward sale.
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