It’s been an important few weeks in the art world, with the unveiling of a rediscovered work by 17th-century Dutch artist Rubens, London’s National Gallery opening its doors for the first time since March, and auction house Christie’s premiering an online and in-person global sale that kicked off in Hong Kong before moving seamlessly on to Paris, London and New York.

Art lawyers might perhaps be forgiven a sigh of relief at the prospect of all of these events, hoping they mark the beginning of the end of a lockdown period that has proved challenging for a sector where face-to-face, or face-to-canvas, interactions are key to doing business.

Those hopes are tempered with a splash of reality, however, as Roland Foord, senior partner at law firm Stephenson Harwood, explains: “While the relaxation of lockdown is all very good, until buyers are able to travel more freely than they can at the moment I think it will be, particularly at the higher end, a fairly gradual return to normality. With the best will in the world, someone is unlikely to be spending millions on works of art without going to see them.”

Even so, for the past few months, many galleries and dealerships have relied on online viewings to keep their businesses ticking over, escalating a trend that was already gathering pace, but also potentially creating issues for the future, as Adrian Parkhouse, partner at Farrer & Co, points out.

“One of problems with online auctions and dealing is that [buyers] don’t get to see the item until it’s too late,” he says, adding that this may lead to disappointed purchasers potentially looking to find fault with the descriptions given in auction particulars or photographs.

Diana Wierbicki, head of the global art practice at Withers Worldwide, has a similar story: “Some galleries had already started using virtual viewing rooms, but others were saying, ‘No, this is a relationship industry, people have to see physical art.’ The experience [of lockdown] has forced this industry to be more agile in the tech space.”

Fewer “misunderstandings”

Another consequence of a remotely working art market has been an increase in sale and purchase agreements in writing, adds Wierbicki’s colleague Eleny Polycarpou, a partner in Withers’ London office.

“This has been a very welcome development because most disputes tend to arise from misunderstandings about what was and what wasn’t agreed… Because a lot of the sales have been happening without any physical inspection, we have seen an increase in requests for more extensive warranties. And people are taking advice before entering into agreements to make sure they are covered in the eventuality the artwork isn’t what they were told it was.”

Lockdown’s removal of the ability closely to inspect artworks has also emphasised the seemingly ever-increasing importance of scientific analysis to determine whether a work is genuine, although such input may perhaps not always be 100 per cent foolproof.

Foord, for example, was recently involved in a case that focused on whether a work by the 17th-century painter Franz Hals was a forgery.

“The whole saga was precipitated by an anonymous letter to a judge in France who then launched an investigation,” he explains. “The Hals experts looked at [the painting], some of them face to face, as it were, others via high-quality digital pictures, or photographs, and the overwhelming view of it was positive.“

However, Sotheby’s, the auction house that had bought the painting from Foord’s client, still felt uneasy about the work and decided to have it tested. When the scientific analysts said they had found evidence of 20th-century materials, the conoisseurs’ views were discounted and the auction house concluded the work was not genuine.

Foord adds: “We put in a report, from a very distinguished German scientific expert, whose conclusion was there was nothing wrong with it and there were perfectly good explanations for what had been found. But, because we had already settled [at that point] the witness wasn’t called. Despite the claims that it is a fake, the painting continues to have widespread support within the art world, so it will be interesting to see if it is eventually successfully rehabilitated.”

An opaque world

Not wholly unrelated to the subject of disputed authenticity, the coming months are also likely to bring with them an increased focus on money laundering legislation in the art world. Under the Fifth EU Money Laundering Directive, which took effect in the UK in January, art dealers and auction houses will be required to undertake anti-money laundering checks on their customers, risking prison if they do not.

Parkhouse says: “The legislation got enacted very quickly, because it got lost during the Brexit debate, and art dealers didn’t have much time to prepare the detail before lockdown was enforced.”

“It will be interesting to see how the past three or four months have impacted the art trade’s ability to prepare for the money laundering processes and what approach the supervisory authority (HMRC) will take towards enforcement. I imagine [the lockdown period] will have set people back because they will have been busy keeping their businesses afloat.”

And the necessity of survival has brought with it one further area of dispute where lawyers may find their services required. According to Withers’ Polycarpou a number of galleries discovered their insurers were unwilling to pay out on business interruption policies when the pandemic closed their doors.

The galleries are now considering joining forces to bring claims, dependant on the progress of an action being taken by the Financial Conduct Authority (FCA) that, the organisation says, aims to provide “clarity and certainty for everyone involved in these BI disputes”.

Polycarpou adds: “There is a hearing in the High Court on the FCA question on 20 July so we’re waiting for the outcome of that before we advise clients on their claims, but the current circumstances could give lead to quite a significant amount of litigation.”

A version of this article originally appeared in The Times Brief legal affairs bulletin.