Artists Resale Right: 4th Year Report

February 2010 marks the fourth anniversary of the introduction into UK law of the Artist’s Resale Right (ARR). Invented by the French around a century ago, where is it known as droit de suite, ARR gives authors of original artworks an automatic legal right to receive a royalty each time one of their works is resold in a sale involving an art market professional.

ARR legislation spread through mainland Europe during the 20th century. It gained momentum when it was introduced into the worldwide international agreement, the Berne Convention for the Protection of Literary and Artistic Works, which encouraged signatory countries (most of the world) to enact ARR legislation. In 2001, further momentum was stimulated by UNESCO’s declaration: ‘All original works of fine art in its widest sense, including works of graphic art and photographs of a creative nature, which are resold on the art market in the world, must be subject to droit de suite legislation.’ The same year, the EU issued a Directive requiring all EU Member States to introduce a common scheme into their domestic laws by 2006. The EU scheme now operates not only in the 27 EU Member States, but also in Iceland, Liechtenstein and Norway.

Beyond the EU, ARR operates in an increasing number of countries, including: Algeria, Brazil, Bulgaria, Burkina Faso, Chile, Congo, Costa Rica, Croatia, Ecuador, Guinea, Iraq, Ivory Coast, Laos, Madagascar, Mali, Monaco, Morocco, Peru, Philippines, Russian Federation, Senegal, Serbia and Montenegro, Tunisia, Turkey and Uruguay. There is no federal ARR legislation in the US, where the only state to introduce it is California, despite its having been debated in a dozen or so other state legislatures.

The EU scheme operates on a consistent basis throughout its Member States, although each is given some discretion to decide the starting price for resale royalties becoming payable, the methods of payment and collection, and whether deceased artists’ estates may receive payments. In the UK, ARR only applies to resales of €1,000 or more and is calculated on a sliding scale, with €12,500 being the maximum royalty payable on any single resale. The royalty is subject to ‘compulsory collective management’, which means that artists cannot (and do not have to) claim their royalty themselves; art market professionals are responsible for paying the ARR into a not-for-profit-share artists’ collecting society, which then pays its artist members. Two such collecting societies operate in the UK: the Design and Artists Copyright Society (DACS) is the body to which art market professionals must pay ARR they have collected for resales in the UK – unless artists have chosen to become members of the other UK collecting society, the Artists’ Collecting Society (ACS).

ACS was formally established in 2006 to collect ARR ‘in response to requests from artists and from their dealers via the British Art Market Federation (BAMF) and the Society of London Art Dealers (SLAD) for artists to be provided with a choice of collecting society for the management of Artist’s Resale Right’. It currently represents around 300 artists, and is now working with an increasing number of foreign societies and also collecting directly from a large number of foreign dealers. ACS expresses confidence that ‘nothing is slipping through its network’ of links with art market professionals. It charges UK artists 15% commission for administering royalties received for them; its charge to overseas artists differs according to the foreign collecting society with which ACS liaises (artists’ collecting societies outside the UK send the royalties of UK artists to either DACS or ACS for payment, and they reciprocate this arrangement). ACS pays artists either the same day or the next day following receipt of their ARR royalty. Harriet Bridgeman, Managing director of The Bridgeman Art Library (who sponsored the establishment of ACS) says: ‘I feel very confident that the introduction of ARR was in the best interest of artists and we are very aware of individual cases where it has made a great difference to them.’

DACS was established in 1983 and is the UK’s only copyright management and collecting society for artists and visual creators; since 2006 it has also collected and paid out ARR. It has collected over £10m in ARR royalties since February 2006, benefiting 1,800 artists in total. DACS pays artists every 30 days, charging UK artists 15% commission for royalties collected from UK resales, and charges no commission on royalties received for UK artists from foreign collecting societies for resales abroad. 65% of the royalties collected by DACS for resales in the UK are paid to UK artists, the remaining 35% is paid to foreign collecting societies for artists abroad. Gilane Tawadros, DACS’s chief executive, says: ‘We are delighted by the ongoing success of the Artist’s Resale Right. Artists of all types are receiving resale royalties in recognition of their ongoing stake in the value of their work. We are committed to ensuring that the Artist’s Resale Right continues to be a meaningful and successful piece of legislation which achieves its original aims.’

The UK Government was persuaded by art market professionals in the UK to be cautious about the introduction of ARR during the 1980s and 90s, through fears that the secondary market for modern and contemporary art would be damaged by buyers and/or sellers choosing to trade in countries that did not operate ARR – such as the USA, Switzerland, or China. Such fears have proved unfounded to date: four years on, no evidence has been produced showing that the UK art market has suffered from the introduction of ARR.

Such market fears, though evidently unfounded in the event, caused the EU to allow the UK, Austria, the Netherlands and the Republic of Ireland to implement ARR only for living artists between 2006 and 2009. This is because, unlike the rest of the EU member States, those four countries had never operated an ARR scheme before, and were given an initial three years’ grace to implement the new EU scheme and to assess whether the feared damage would in fact be done to their art markets – before applying their ARR to the estates of their deceased artists’ (for 70 years after their deaths). Each of the four was required to submit to the EU by the end of 2008 its written reasons for continuing the so-called ‘Derogation’ (non-implementation of ARR to their deceased artists) throughout 2010 and 2011. In December 2008, Secretary of State for Innovation, Universities and Skills John Denham wrote accordingly, stating: ‘The current economic downturn could only but affect the UK market’s ability to cope with the application of the artist’s resale right to the works of deceased artists.’ Denham’s letter thereby automatically triggered the UK’s continuing Derogation until 31 December 2011. This was written despite his public consultation with artists and art businesses, and the UK’s two collecting societies, about the matter during 2008; and his receipt of over 400 responses to the consultation – 90% of them being in favour of the full implementation of ARR from 2010, including DACS and ACS.

The good news is that in December 2009 Parliament amended UK law so as to apply ARR to deceased artists from 1 January 2012. This means that the estates of UK artists who died after 1941 will be entitled to receive a royalty on each resale of their works (involving an art market professional) from 1 January 2012; embracing those who would otherwise have been excluded, for example, Jacob Epstein (1959), Pauline Boty (1966), Barbara Hepworth (1975), Henry Moore (1986), Elisabeth Frink (1993), Paul Neagu (2004), and Barry Flanagan (2009).

© Henry Lydiate 2010

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This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.