Sotheby’s play down UK class action

“There is no comparison between the American settlement and what is happening in the UK,” said Sotheby’s spokesman Matthew Weigman, referring to the $512m compensation for buyers and sellers at US auctions, on which Class Law are basing their putative action, and adding that the figure of £100m-200m quoted as possible compensation by the law firm was therefore not realistic. “For one thing, we do not face the prospect of treble damages under English law,” Mr Weigman said. “The second point concerns the number of people involved. In America we had 130,000 class members, but in the UK the number is bound to be far lower.”

Mr Weigman also insisted that Sotheby’s would not have a case to answer over the buyer’s premium. He played down the fact that it was agreed under the terms of the civil settlement that buyers at US auctions had been overcharged by five per cent on each purchase under $50,000 between 1993-99, referring instead to the trial of former Sotheby’s chairman Alfred Taubman “...in which the prosecution made it absolutely clear that there was no evidence of illegal activity over the buyer’s premium”.

Sotheby’s and Christie’s had raised the buyer’s premium to the same level in 1992, but Mr Taubman and former chief executive Dede Brooks’ offences related only to seller’s commissions. “No settlement amount in the UK will take into account the buyer’s premium,” said Mr Weigman.

Class Law admitted that it would be easier to resolve the complaints of vendors, rather than buyers, and that they would proceed with their case first. Sotheby’s have analysed the impact of vendor’s commissions
on the European market since changing their fee structure for sellers in 1995. “We found no significant increase in revenue, mainly because the commissions mostly affect the major sellers, and there have not been many big collections sold by Sotheby’s in Europe since 1995,” said Mr Weigman.