Comment | How do we protect artists from gallery insolvency?
A recent spate of closures has led to calls for legislation—but education is important, too
In a recent panel discussion on art law at the Art Business Conference in London, art lawyer Jon Sharples proposed legislative changes in the UK to protect artists from gallery insolvency. The discussion came after witnessing several gallery insolvencies, raising concerns about what happens to an artist's consigned stock when a gallery goes bankrupt.
If a gallery has been keeping the artist's work with an unpaid third-party storage company, the artist may never see their art again, as recovery is often contingent on paying storage costs. New York has already implemented statutes that protect artists from unscrupulous financial practices by dealers, requiring dealers to hold works on trust for artists and keep accrued funds in trust accounts.
Sharples suggested that the UK should adopt similar protective legislation, as it would benefit artists without harming the London market compared to New York, where galleries already comply with more stringent requirements. Another potential avenue for protection is the law of agency, which states that galleries are fiduciaries for their artists and owe them duties to account, prohibit secret profits, and treat the artist's interest as their own.
While new legislation may be beneficial, Sharples believes galleries should first understand their existing fiduciary duties. Education and advocacy could also play a role in protecting artists, with calls for a UK visual arts trade body similar to those in the music industry.
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