Loaner Beware

This is a very unusual step for any artist to take in the UK. How have these circumstances arisen, what is the likely outcome, and what lessons can be learned by artists, collectors and galleries?

The case of Robyn Denny

Last October Robyn Denny’s solicitors, Stephens Innocent, issued proceedings in the High Court against the Corporation of London and the Department of National Heritage, claiming damages of £40,000 to compensate for irreparable damage done to his abstract work 7/1960, plus further damages to compensate for his loss of opportunity to enhance his reputation by exhibiting the work.

This is a very unusual step for any artist to take in the UK. How have these circumstances arisen, what is the likely outcome, and what lessons can be learned by artists, collectors and galleries?

The Loan Agreement

In September 1992 Robyn Denny signed a written loan agreement with London’s Barbican Art Gallery. Its terms and conditions included the following: The exhibition was to be held at the Barbican between March and June 1993, entitled The Sixties Art Scene in London’. Denny agreed to lend a work from his personal collection, 7/1960: an abstract executed during 1960 in rebellion against 50s figurative work; it is 90 x 54in, using oils of red, blue and orange, on canvas; and is one of a series of three that Denny had exhibited in the seminal exhibition ‘Situation’ in London in 1960; the other two were purchased by the Tate and by the United States Embassy. The Gallery agreed to take proper care of the work while it was on loan, and to arrange transport of it ‘nail to nail’. The Gallery undertook to insure the work ‘nail to nail’/shelf to shelf either through the Corporation of London’s insurers or through the Government’s Indemnity Scheme – operated under the provisions of the National Heritage Act 1980. If the work was lost or destroyed, it was agreed that the insurers would pay the agreed value, which was stated as being £40,000. If the work was damaged, the Gallery and Denny would have to agree the reasonable works of repair by reputable restorers, which would be paid from the insurers together with an amount to cover the reduction (if any) in the market value of the work after repair. In the event of agreement not being reached on these matters by the Gallery and Denny, an arbitrator would decide. Denny did not elect to maintain his own insurance to cover the loan of the work, which was also stated in the agreement. The Barbican wrote to Denny confirming valuation of the work by an independent expert as being £40,000 for the purposes of insurance.

The Damage

Just before the exhibition opened in March 1993, there was a leakage of water from the Gallery’s roof which fell onto 7/1960, causing damage. The water contained a corrosive liquid substance, possibly from cement, which left the work with irregular disfiguring lines running down most of the length of the canvas. In turn, this caused cracking and broke down the oil bonding, leaving visible blemishes right across the work. As a result of this the painting was not exhibited, and Denny obtained opinions from two independent experts who agreed that the work was irreparably damaged and/or was not capable of satisfactory or successful repair or restoration for the purposes of exhibition in future.

It is difficult for a lawyer to describe the effect of the damage without visual aids, but the first thing to try to describe is the work itself. The composition involves a careful arrangement of straight lines, in a precisely delineated relationship, offering the eye and mind of the viewer no direct or inherent guidance as to what to see and what to eliminate. The presence of the irregular disfiguring lines interferes with the work and confuses the eye. In other words, in the absence of guidance as to what to see, the accidental marks have the same character and effect upon the eye as the intended ones. It is argued that the visual integrity of the work has been utterly spoiled and destroyed. Accordingly, it is alleged that the work has also been destroyed financially. Any effort to repair the work would fail because restoration could not reinstate uniform consistency to the visual texture of the surface at the repair sites. Thus runs the gravamen of Denny’s grievances: artistic, financial and now legal.

The Claim

Denny is claiming either breach of the agreement to look after the work and to pay the agreed insurance value, or damages for negligence by the Gallery or both. He also claims damages for future lost opportunity of enhancing his reputation, including publicity at the Barbican which was lost to him as well as at subsequent exhibitions.

The Defendants

There are two defendants: The Corporation of London owns and operates the Barbican Art Gallery, which contracted with Denny; the Department of National Heritage operates the British Government Indemnity Scheme which provides certain indemnities to cover the loan of works of art for the purposes of exhibition at certain public institutions. Denny’s claim against the Government is because its Indemnity Scheme covered loss or damage to the work.

The Court Proceedings

Much negotiating has taken place between Denny, his solicitors Stephen’s Innocent, the Barbican, the Corporation of London, and the Department of National Heritage over the past 12 months or so. Clearly, these negotiations have now broken down, resulting in Denny’s writ being issued. The current position appears to be that the defendants are seeking an order of the court to stop the proceedings going any further, because arbitration has not taken place. The court will decide that issue shortly, including whether or not discussions between the parties about arbitration and Denny’s willingness to partake in that process should prevent the case from coming to court.

The lessons at this stage

One of the positive features of these regrettable circumstances is that the original loan agreement was put into writing and signed by the parties, Denny and the Barbican. Another is that an independent valuation of the work was carried out and put into writing at the outset. What appears at first sight to be further positive aspects have proven to be the sticking points at present: the provision in the agreement that both sides would agree upon damage and restoration; arbitration in default of agreement; agreement that the Gallery would insure nail to nail; and that the British Government’s Indemnity Scheme would cover all claims. These issues are the basis of the dispute and have serious implications for all gallery administrators, especially public but private also; for would-be lenders, be they artist-owners or collectors: for insurers and, not least, for the Government and its Indemnity Scheme. Finally, one further feature of the case which is of particular interest is Denny’s claim for loss of opportunity. Research indicates that the last time such a claim succeeded in the British courts was in 1939; an actor was awarded £1,000 by the court as compensation for loss of opportunity after being unlawfully dismissed from employment. Were Denny to succeed in this element of his claim, the level of damages could well be substantial for his toss of opportunity in relation to future exhibitions of what is widely acknowledged as an unique and historically important work. The most upsetting aspect of all is, of course, the fact that 7/1960 has been damaged, arguably irreparably.

© Henry Lydiate 1994

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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.