Artist’s Resale Right: good intentions, bad law

PERSONAL VIEW: Simon Stokes, who has just published his updated legal guide, puts the whole issue of the Artist’s Resale Right in context.

All of us want to see the visual arts flourish in the UK. Some visual artists such as Damien Hirst earn fantastic sums; others, like my late stepfather, little if anything.

Governments naturally want to support the arts, part of the much-vaunted UK creative economy, and there is a long-standing view that economic incentives spur artistic creativity. If art were not bought and sold it wouldn't be created, or at least there would be a lot less of it.

In the past, patrons of art included the Church, aristocracy and a burgeoning middle class - now they are more likely to be the state and private enterprise.

So perhaps it wasn't that surprising that in 2006, when the Artist's Resale Right (ARR), the controversial copyright law that gives artists a share in the resale of their works, was introduced into UK law, the minister then responsible, Lord Sainsbury, justified its introduction on the basis: "The [Artist's Resale Right Regulations 2006] ensure a just reward for living British artists' creativity while protecting the valuable UK art market". A very Blairite and creative economy view that completely ignores the origins of French droit de suite upon which ARR is ultimately modelled.

We have ARR in the UK due to a 2001 European Union Directive, fought against by the then UK government, which harmonised ARR law across the EU. The argument was that as the Germans, French, Swedes and so on had it, then the British, Irish, Austrians and Dutch had to have it too. All this ignores the point that ARR is not a universal feature of copyright law - the vast majority of countries in the world (including the large art markets of China, New York and Switzerland) have not introduced it and appear to have no intention of doing so. A more logical approach would have been to abolish it as outdated, inefficient and expensive.

As a copyright lawyer, I can see it is the law on digital copyright that drives the world economy, not an arcane and historic early 20th century development the French appear to have introduced to provide an element of social security to struggling artists and their starving heirs after the collapse of the state-sponsored Salon in France. It certainly wasn't introduced to spur more new Labouresque artistic creativity.

A reciprocal arrangement exists by which the EU Directive extends the beneficent EU ARR law to artists from non-EU states that also have ARR. However, at present it appears no such countries operate ARR along the European model, so they do not qualify. A case of creating a fortress Europe if ever there was one.

Be that as it may, ARR is unfortunately here to stay. In 2006 Lord Sainsbury said the government would press the EU to give the UK a permanent "opt out" from the worst excesses of ARR - most notably its extension to the estates of dead artists from 2012. But there is no sign of any political support across the EU to change the 2001 Directive to allow such an opt out despite the British art market doing its best to keep the matter on the agenda at European level.

So the UK art market has to work with a law it never wanted but which is likely to remain on the statute book for the foreseeable future. Never mind concerns about its cost of administration, its disproportionate impact on dealers who quickly buy and sell in succession, and (in the author's view, although the evidence is disputed) a likely long-term shift of trade offshore or at least increasing attempts to avoid ARR in international transactions.

Legal Uncertainties

There are legal issues, too, which add uncertainty. For example, how does the law apply to international sales (the Directive doesn't help here)? What about artist/craftsman-designed furniture, jewellery and craft works - are these covered? Who has the right to request information and collect ARR if the artist or their estate have not mandated a collecting society, now there are two main ARR collecting societies in the UK: DACS and ACS?

In the UK artists can't collect ARR themselves; they must do so through a collecting society.

It is not easy to obtain precise data on the overall impact of ARR on the UK art market. Economic research tends just to use more readily available auction house data, so combining this with dealer data to obtain an overall picture is difficult, but the annual royalties based on auction house data are now likely to exceed £10m. However, we need auction house and dealer data combined to gain a clearer picture of what they actually are. Hopefully the two main UK collecting societies, ACS and DACS, will co-operate to provide this information in due course.

Previous studies indicate that the majority of the money collected goes to successful living artists and artists' estates. Again it is hoped that in due course both collecting societies will co-operate to publish readily comprehensible data on these payments, the better to inform the policy debate.

What this data does suggest, however, is that ARR is only likely to generate very modest sums for younger, less-established artists. If the government were serious about promoting artistic creation, targeted spending of similar amounts would surely yield better fruit and avoid all the downsides of ARR from an art market perspective.

So ARR has good intentions behind it, but it is a bad law. If it can't be abolished in the short term its worst effects could at least be ameliorated by raising the threshold in the UK at which it applies from €1000 to €3000. This is permitted under the EU Directive and is something that many in the art market are campaigning for.

Meanwhile, the UK Government could get off the fence and provide some sensible guidance to the art market on a number of contested areas and also be seen to be more supportive of art market concerns.

• The second edition of Simon Stokes' book Artist's Resale Right  has recently been published by the Institute of Art and Law. He is a solicitor and a partner in Blake Lapthorn (www.bllaw.co.uk). The views in this piece are his personal opinions and not necessarily those of his firm or of his clients.