The news that claim forms would finally be sent out to dealers and collectors who had bought or sold at Sotheby’s or Christie’s auctions in America between 1993 and 2000 came only two days before the European Commission announced a £13m fine for Sotheby’s on price-fixing charges in Europe linked to the scandal.
Christie’s escaped any EC penalty for the same reason that they did in the US – because they were the first to approach the authorities on both sides of the Atlantic with dossiers of information on the secret meetings between the then chief executives of both companies when the price-fixing scandal first broke in December 2000.
Whether a civil case for compensation will now be launched in Europe is not clear, although Class Law, a legal firm co-ordinating an attempt at a class action, are confident one will.
Christie’s were granted immunity from prosecution by the US government in return for their assistance, while Sotheby’s were fined $45m (£29m) for their joint conspiracy to fix vendor’s commissions between 1995 and 2000.
The US investigation wiped
millions of dollars from Sotheby’s share price, which now stands at a third of its value two years ago.
Former chief executive Dede Brooks pleaded guilty to the collusion while her boss, former chairman Alfred Taubman, is three months into a year-long jail sentence after being convicted on similar charges. His controlling stake in the company is up for sale.
News of the EC fine knocked another 50p off the value of Sotheby’s A shares last week, but the auctioneers, who could have faced a fine as large as £21.6m without the “leniency discount” for co-operating with the investigation, announced that they had budgeted for the fine in their third quarter results. “As the fine was materially less than it could have been, we are very pleased to have the investigation behind us,” said chief executive Bill Ruprecht. “It has been very important to everyone at Sotheby’s that no current employee of the company was involved in or aware of the anti-competitive practices.”
Sotheby’s have also recently secured a credit agreement of $200m as they attempt to return a yearly profit for the first time since the 1990s.
However, there are concerns that the EC judgment may open up Christie’s and Sotheby’s to civil action in Europe.
London solicitors Class Law have recently served “letters of claim” against Christie’s and Sotheby’s. The firm are confident that the US settlement is an adequate basis for a UK action. They claim to have registered over 400 potential litigants – dealers, collectors, museums – willing to pursue a £100m-200m class action against the auctioneers.
The UK’s leading dealer associations did not express such certainty, however. BADA have always said that any lawsuit against the auctioneers alleging price fixing would have to come from individual members, although secretary Elaine Dean promised that the association “would discuss any possible action at the next council meeting”.
Meanwhile LAPADA chairman John Newgas said that it would be “premature” to draw any conclusions from the EU judgment.
US price-fixing compensation can go ahead say courts
EC fine Sotheby’s £13m – Christie’s escape penalty: THE US courts have given the go-ahead for compensation settlements to be paid in Sotheby’s and Christie’s $512m price fixing case. The green light came last week after the 90-day appeal period set by the US Supreme Court expired with no challenge to the ruling.
