Everyone loves the story of the garage sale one-in-a-million priceless work of art find, which turns the lucky buyer into an instant millionaire.
Sometimes it happens, though, that these treasures are found not at the local church sale, but in the hallowed halls of an esteemed auction house.
This is what is alleged to have happened to a work by renowned Italian 16 and 17 Century artist, Michelangelo Merisi da Caravaggio when Mr. Lancelot Thwaytes took a long-owned family painting to Sotheby’s for appraisal in 2006. According to Mr. Thwaytes, he thought the work to be by the legendary Caravaggio and asked Sotheby’s to research the picture. Sotheby’s came back to say that it was a 17 Century copy after Caravaggio’s original work ‘The Cardsharps’, which hangs in the Kimbell Art Museum in Fort Worth, Texas. Resigning himself to the lesser stature of his prized possession, Mr Thwaytes’ agreed to auction the piece and an estimate of between GBP20,000 and GBP30,000 was set.
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At auction, the now late renowned collector, Sir Dennis Mahon, snapped up ‘The Cardsharps copy’ for a well-bid GBP42,000, moved subsequently to declare the work to be no insignificant copy but, in his view, no less than an earlier version by Caravaggio himself and declared its value to be more than 200 times what he paid for it on auction: a staggering GBP10 million.
Naturally disturbed by this, Mr. Lancelot Thwaytes sued Sotheby’s for negligence, alleging that Sotheby’s did not properly perform the tests required of it in appraising the painting.
Sotheby’s persists in its denial that the piece is an original Caravaggio, and the legal joust with Lancelot continues apace in London’s High Court.
Besides having the air of enchantment that most get-rich-quickly stories possess, the case presents a fascinating intersection of law and art, bringing into focus the role played by the judge, who ostensibly has no expertise in art, in being the final arbiter of what is or is not authentic, even where the experts can’t agree.
It also showcases the pure liability potential risked by an appraiser or authenticator in plying a trade which is by no means an exact science, particularly where these days it is common practice for auction houses or other appraisers to appraise on the strength of a photograph, offline or online.
Where there is a windfall profit making buyer on Auction, there is bound to be an aggrieved seller waiting in the wings. And as can be seen from The Cardsharps, the dollar stakes are high.
The legal context of the auction house’s relationship with its sellers underscores this exposure. In accepting a work on consignment, under the laws of various US States, the Auction House is an agent of the consignor, and owes its consignor fiduciary duties; to act in the utmost good faith and in the interest of the consigner. This comprises a range of duties established by statute and by the courts and includes the duty to obtain “the best validly offered price for the consignor’s offering”.[1]
Negligence, negligent misrepresentation and breach of contract are the usual grounds on which disgruntled sellers or purchasers sue auction houses. The question usually turns on whether the auction house has ‘a duty of care’ to the seller or buyer who brings the suit and whether that duty was breached. The question asked in this enquiry, to put it simply, is whether the auction house exercised the level of care in appraising that the reasonable expert appraiser would have exercised in the circumstances. This is most often not an easy question given the conflicting expert views that the litigants produce to argue their cases.
But all is not so bleak as it seems for the auction house.
As appears to be the case here, Mr Lancelot Thwaytes would have to address the presupposing questions of whether this is actually an original Caravaggio, and if it were, whether what Sotheby’s failed to do (if anything) would have revealed the work to be an original.
And a well drafted consignment agreement could offer the auction house further relief. No doubt Mr Thwaytes would have signed Sotheby’s consignment agreement. If this case were being decided before a US Court, as would most likely be the question in England as well, Mr. Thwaytes would conceivably also have to deal with any Sotheby’s friendly disclaimer in the consignment contract. Courts in varying US states have held that auction houses or other contractors can disclaim liability even for their own negligence.
So it would seem that the pendulum may swing back in favor of the auction house. Oftentimes a well-drafted agreement can work wonders.
Although this may not have a happy ending for Mr. Thwaytes, the excitement of finding a piece that may be a treasure still captures the imagination, and it shows when it comes to fine art, not even the experts can agree.
So, the next time you notice a famous signature on a piece that your grandfather bought many years ago, don’t necessarily believe the first expert who tells you that it is ‘after’ or ‘from the school’ of the artist, and not the real thing.
Like law, art is argument and perception, and the most convincing argument may win, regardless of the truth.
A fascinating case indeed of the intersection of law and art.
[1] Lerner & Bresler, “ Art Law”, Vol.1, 3Ed. Pg. 339.
** **The first in a series of posts where we look at the Fine Art auction market, a few of the nuances involved in consigning works, and selling on auction. This will include a look at some of the legal issues and pitfalls to avoid in selling on auction, none of which though is, or is intended to be legal advice and should not be relied on for that purpose. Look out for further installments from the Fine Art Ledger in this series.