Down in the Flood

Well, it’s sugar for sugar
And salt for salt,
If you go down in the flood,
It’s gonna be your own fault. *

Or is it? The Conditions of Entry said: ‘Works submitted for consideration are at all times at the owner’s risk and it is a condition of entry that the Arts Council and their agents will in no circumstances be liable for any loss or damage, however caused. Artists must make their own insurance arrangements to cover any such loss or damage. Works selected for the exhibition will be covered against all risks by the Arts Council. Cover will be effective from the time that the artists receive notice that their work has been selected. Cover will apply only to works selected’.

This clause comes from the Arts Council’s Notice to Artists for the Hayward Annual 1982. Each artist was allowed to submit up to three works for selection, and the arrangements for sending in were as follows:

  1. Artist delivers work to London warehouse (Pitt and Scott Ltd.), or to regional collection centres for transfer to London.
  2. Works to be delivered unpacked; frame corners to be protected by corrugated cardboard; unframed works to be adequately protected; no works to be rolled or in tubes.
  3. Artist meets transport charges.
  4. Artist submits entry form, with £7.50 handling fee, to the Arts Council.
  5. Artists whose works were not selected for exhibition to be notified by the Arts Council, and works were to be collected by a certain date from the London or regional collection centre.
  6. Works not collected by the removal date to be charged the agent’s usual fees, including storage; and all works not claimed within one month could be disposed of (by sale or otherwise).
  7. Works included in the exhibition to be returned to the artist by the Arts Council at the close of the exhibition.

The purpose of this article is to examine the meaning and effect of the Conditions of Entry clause (quoted above), in the light of a tragic incident which caused damage to hundreds of rejected works whilst at the London warehouse of the Arts Council’s agents before the expiry of the removal period. What appears to have happened was this:

During the final weekend of the removal period, at the London warehouse, a burst pipe connected to a coffee machine in the offices above caused water to drip down onto many works stored in pallet boxes. Although the pallets were off the floor (and so they did not stand in the water), the dripping water may have become acidic as it seeped through wood and corrugated wrapping. When the damage was discovered on the Monday morning, the works were taken out of the main storeroom to dry out and on Tuesday a conservator was called in and advised that everything be taken out of frames. It appears that the Arts Council were able to contact some artists, though not all, and many works were left in their frames all week.

It is reported that 240 works were damaged, some of them seriously, but most of them to a minor degree. Many artists who claimed compensation from the Arts Council were referred to the Conditions of Entry. Before looking at the effect of any disclaimer in the Conditions of Entry, it is important to establish just what relationship artists were entering into.

The Contract
By reading the Notice to Artists, signing and sending in the Entry Form and delivering their works, artists were entering into a contract with the Arts Council; not with Pitt and Scott. It was open to every artist who disliked any of the conditions not to agree to be bound by them, by not entering. Those who did were bound by all the Conditions of Entry.

Pitt and Scott were employed by the Arts Council to act as agents for collection purposes only. There was no contract between the artist and Pitt and Scott, and so any problems which arose in relation to the sending in were governed by the Conditions of Entry agreed between the artist and the Arts Council.

The Disclaimer
Artists agreed that their works were at all times at their own risk, and that in no circumstances were the Arts Council or their agents liable for any loss or damage to works, however caused. Moreover, artists were advised in writing by the Arts Council to make their own insurance arrangements to cover any loss or damage which might occur whilst in the hands of the Arts Council or its agents. (Selected works were to be insured by the Arts Council from the time of selection until delivery back to the artist by the Arts Council).

The Unfair Contract Terms Act 1977
The disclaimer of liability clause, agreed to by the artist, does not necessarily mean in law that the Arts Council’s liability has been avoided. The Act says that such a disclaimer can only be valid in law if it is reasonable in all the circumstances; and that it is for the Arts Council to prove (in court, if there is a fight) that it is reasonable. (For further detailed consideration of such an issue, see the Artlaw column in Art Monthly No.49).

The Act goes on to say that reasonableness is to be determined by:

  1. the resources which anyone would expect to be available for the purpose of meeting the liability should it arise; and
  2. how far it was open to effect insurance cover.

Was it reasonable?
On the facts of this particular case, there appear to be two issues which arise:

  1. the burst pipe and the dripping water; and
  2. the damaged works being left in their frames after the initial damage had been done and discovered.
  1. The burst pipe: Applying the first reasonableness criterion, what resources would be expected to be available to the Arts Council for the purpose of meeting the possibility of burst pipes damaging any quantity of works, of any value, that might be sent in? In fact, the Arts Council contracted with Pitt and Scott, a reputable fine art warehousing firm, to store the works in a professional manner, which they apparently did. Applying the second reasonableness criterion, was it possible for the Arts Council to effect insurance cover for possibly thousands of works, of any value, that might be sent in. (In the event, 2200 artists sent in – max. 3 works per artist). Or, was it possible for every artist to effect his or her own insurance cover for the period the works were to be warehoused with the Arts Council’s agents – the artist alone being able to place a value on work and pay an appropriate premium.
    In all the circumstances, it could very well be that a court would find that the Arts Council’s clause was indeed reasonable in relation to the burst pipe.
  2. Further damage from lying in frames: Applying the first reasonableness criterion, what resources could be expected to be available to the Arts Council for the purpose of meeting the possibility of already damaged works being left for a further period of time in their frames when wet, and so risking further damage. Perhaps they could have employed someone to remove wet works from their frames, as advised by the conservator. In fact, they tried to contact the artists.

Applying the second reasonableness criterion, insurance cover for the possibility of further damage caused by the non-removal from the frames would probably not arise, if it were considered reasonable in all the circumstances for the Arts Council to have removed them.

In all the circumstances, therefore, it could well be that a court would find that the Arts Council’s clause was not reasonable in relation to the possibility of further damage caused by leaving wet works in their frames.

Is there a solution?
This analysis is the framework of the issues involved in this unhappy affair, but where does that leave the artist? Many aggrieved artists have approached the Arts Council claiming compensation, some on moral and professional grounds, others on a legal basis, or both. It is reported that the Arts Council is giving serious consideration to making amends, and it is hoped that an acceptable solution is found, and on an amicable professional basis. Meanwhile, the only artists who can be reasonably sure of receiving compensation for damage are those who were prudent enough to effect their own insurance cover while their works were at the warehouse; and that itself raises important issues.

Insurance for open submissions
Insurance cover for works submitted for such projects can and should be effected.
Premiums can be reasonable and within most professionals’ means (a tax deductible expense, too!): the higher the value of the work, the greater the premium to reflect a higher cover. Any artist faced with such a situation in the future would be well advised to heed the good and helpful advice/warning/disclaimer given to artists by the Arts Council in this particular case, and take out insurance themselves. If problems are encountered, advice and help can usually be offered by the national arts councils, regional arts associations, some galleries (public and private), or Artlaw Services.

One further word of caution and advice to those artists whose works are not yet insured whilst in their studios; insurance cover should be effected straight away – and should be up-dated every time a work is near completion so as to increase the value of the insured stock. Again, premiums are reasonable and can be included in a package deal to cover studio contents as well.

It’s easy to be wise after the event; smarter to be covered.

© Henry Lydiate 1982
*© Dwarf Music 1967

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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.