A fraud or a Freud? Solving the mystery of authenticity in art

Jil Birnbaum, solicitor & Tim Maxwell, partner, Wedlake Bell, 13/01/2023

That is a question that haunts art buyers, be they private collectors, auction houses or professional art dealers. In an art world full of mysterious claims to expertise, constantly evolving scholarship and engulfing exemption clauses, it is inevitable that art market actors sell artworks that in retrospect, sometimes years later, transpire to be a forgery.

Authenticity is a crucial aspect of the art market, as it determines the value of an artwork and is vital for many reasons, including for sales, loans, inheritance, insurance and tax. Unsurprisingly, art dealers often seek experts' opinions to ensure the authenticity of the art they sell. Identifying and authenticating works of art is of concern to art historians, scientists, and judges - if an expert casts doubt on an object's authenticity, it can significantly decrease in value.

When authentication disputes go to court, judges must decide if a seller's authenticity warranty (if applicable) applies and if the expert evaluated the object with the necessary care and skill. Judges may also be called upon to determine authenticity but often strive to avoid this. The practices of the art market and those of judges determining court cases differs, which can have divergent consequences for the art object and its owner.

In a world where expertise often conflicts (at heart most views are opinions), the cases are often very fact specific. The practice of the art market is to try and mitigate this uncertainty by offering practical ways to protect a buyer of forged art: by specific contractual guarantees to rescind or repudiate a contract, and potentially to compensate the injured party for potential adverse publicity, legal and expert fees as well as any losses suffered.

A UK consumer purchasing art may also be entitled to various legal protections under the Consumer Rights Act 2015 and the Consumer Contract (Information, Cancellation and Additional Charges) Regulations 2013. Sales of art that are not considered consumer sales are governed by the Sale of Goods Act 1979, which implies certain terms such as the art being consistent with its description and of satisfactory quality. 

These implied terms can be altered or excluded by express agreement between the parties. The Unfair Contract Terms Act 1979 determines the extent to which a seller can restrict or exclude their liability under the contract in non-consumer sales. It is best as a buyer to avoid such exclusions of liability in relation to authenticity and replace these with robust warranties that the artwork in question is genuine. However, this is often a question of the respective parties' bargaining positions.

Like forgeries, fraud is a serious issue in the art market. It can take many forms, including selling fakes, selling works that have been falsely attributed to an artist (by upgrading an attribution), or selling/borrowing against works that the seller does not actually own. Under the Fraud Act 2006, it is a criminal offence to make false representations with the intent to make a gain for oneself or another person, or to cause a loss to another person. Individuals who introduce forgeries into circulation may also be subject to civil liability, where someone is found to have knowingly passed a forged document or used a forged instrument to obtain goods or services. 

In the case of borrowing money against artworks, the fraud often occurs when the borrower pledges artworks as collateral for a loan, but then sells the artworks or fails to repay the loan. The lender may not be aware that the borrower never owned or no longer owns the artworks and may not be able to recover the loan. The lack of a central register of ownership is often identified as a facilitating factor in such frauds.

Several methods can be used to advise your client(s) to increase their chances of purchasing genuine works of art and preserving their rights in the event of a dispute.

Research the artwork: Before making a purchase, prospective buyers should research the artist to get a better understanding of their style, techniques, and materials. This will help spot discrepancies that may indicate a forgery.

Get an expert opinion: Prospective buyers should consult with an art historian, museum curator, or other experts to verify the authenticity of the artwork. Such an expert should ideally be the leading expert in the artist's field although they may not always be willing to offer an opinion. These experts can provide valuable insights into an artist's work and help make an informed decision. An expert opinion should be delivered in writing and signed by the expert where possible.

If the value of an artwork so justifies or in the event of a dispute, scientific analysis is a powerful tool that can be used to examine the materials and methods used to create an artwork. Experts can sometimes determine whether an artwork is genuine or forgery by using techniques such as radiocarbon dating, pigment analysis, and infrared spectroscopy.

Check the provenance: An artwork's provenance, or history of ownership, can help establish its authenticity. Look for documentation such as receipts, bills of sale, and exhibition records that can provide information about the artwork's origins. Where possible verify that these are genuine.

Document the transaction: Keep any documentation related to the purchase of the artwork, including receipts, bills of sale, and communication with the seller. This will assist if your client needs to take legal action.

Legal advice: Seek legal advice from specialist lawyers early on who can assist with the due diligence, drafting the Sale and Purchase Agreement or once it has been discovered that a forgery has been sold and/or a fraud committed. 

Ensuring the authenticity of an artwork requires thorough research, and careful analysis of various factors, including the artist's signature, materials used, and expert opinions. However, the time and costs spent in ensuring authenticity are worth investing in, especially given the costs incurred in trying to extricate buyers (and indeed sellers) from contracts where authenticity has become an issue post-completion.

About PAM

PAM Insight is the world’s leading independent provider of essential specialist news, analysis and comparative data for the fast-evolving world of wealth management.

Read more about PAM


eprivateclient is the leading website and news service for private client practitioners, including lawyers, accountants, trustees and fee-based IFAs.

Read more