Thousands of UK dealers and collectors allegedly cheated by inflated commission rates illegally set by the two auction houses between 1993 and 2000 have received eight-page letters from the claims administrator about how to claim if the settlement is approved.
Stripped of its dense legal phrasing, the letter informs those who wish to share in the $40m package to wait for ‘proof of claim’ forms which will be issued to them by Sotheby’s and Christie’s in the coming months. In other words, do nothing.
However, those who wish to exclude themselves from the package have until May 19 to respond in writing to the claims administrator. While it may seem ludicrous to look a gift horse in the mouth, some leading dealers might exclude themselves because of sensitive credit arrangements with the auction houses that they would not wish to jeopardise.
Another reason could be the desire to pursue private litigation against Sotheby’s and Christie’s in the hope of increasing the amount of compensation – acceptance of a share in the proposed settlement would effectively prevent them from making any further claims of a similar theme against the two firms.
The letter to class action members also gives details of how the $40m settlement will be divided among the estimated 150,000 claimants.
Sellers will share $30m, each receiving a sum equal to “a reasonable estimate of the percentage overcharge paid on each transaction”, while the buyers will be left with a share of $10m, the sum equal to five per cent on the hammer price of each purchase up to $50,000.
For dealers who have bought regularly at the London salerooms between 1993 and 2000, this could add up to a fairly large sum. But, given the finite amount of money being paid by Sotheby’s and Christie’s, the potential number of claimants and, of course, the lawyers’ fees (up to 25 per cent of the $40m package) it is unlikely that sums paid out to many individuals will be large. Instead, claimants may receive a proportionate sum of money, with an assurance that no buyer or seller “will receive a cheque for less than $20”.
June hearing will rule on auction house compensation
A JUNE 3 New York court hearing will rule whether Sotheby’s and Christie’s should pay $40m compensation to clients who bought and sold at their auctions outside the US during the 1990s.
