Artists will soon receive a fee when their work is resold at auction. Aidan Dunne examines implications of this new legislation
From January 1st next year, Irish artists will be entitled to resale rights on their work. Under the terms of an EU directive on the so-called droit de suite, artists must receive a percentage of the price when their work is resold at auction.
The terms and conditions of the right will be framed in legislation currently at draft stage. If the legislation is not in place and the scheme in operation by the beginning of 2006, the Irish government may be vulnerable to claims by artists under EU law.
The droit de suite originated in France in 1920. It was designed to ease the financial hardship experienced by the widows and orphans of French artists killed while serving with the armed forces during the first World War. It addressed the perceived injustice of a situation whereby the work of artists changed hands at ever higher prices while their families were destitute. Belgium and Czechoslovakia followed France's lead at the time, but it wasn't until the 1960s that the scheme began to be widely adopted elsewhere.
Since then, however, most European nations have introduced their own versions of the droit de suite. Samantha Holman, executive director of the Irish Copyright Licensing Agency, was well aware that Ireland was being slow about getting around to the issue. "Every time I attended a conference in Europe I was asked why nothing had been done in Ireland. The answer was that I just didn't know why." In the event, it took a looming deadline to concentrate the minds of the legislators.
There is no obvious reason for the Irish government's tardiness. Although there were rumblings of discontent in certain sectors of the arts world, the resale right is not exactly a political hot potato. Neither were there many votes in it.
It promises to benefit some artists in a modest way and it will, commensurately, modestly increase the price of many artworks sold at auction. So, presumably, auction houses are not overjoyed.
For example, it had been argued, Holman says, that works will be shipped abroad for sale, beyond the reach of the artists' resale right, and the auctions will lose out on business. At worst, the wholesale migration of the Irish art trade has been predicted.
But, she argues, hypothetical test cases indicate that in practice, apart from a very small proportion of the market, it would simply not be worthwhile for vendors to take this course of action. "If you look at the costs involved, never mind other factors, in all but a tiny minority of cases they would greatly outweigh the costs entailed by the resale right. It just wouldn't make financial sense to do it."
Jeanne Kelly, a Senior Associate with solicitors Mason Hayes & Curran, and a specialist in intellectual property, has been an interested observer of the progress of the resale right, and she tends to agree with Holman on this point. "It's something that is potentially going to affect only really valuable works."
James O'Halloran of Adams has been a vocal critic of the scheme, but not all auctioneers concur. John de Vere White is inclined to take a sanguine view of the implications. "Frankly, in Ireland I don't think it will have an impact on the trade. It could have an impact in England where, if you've got a picture worth a vast amount of money, it might be worth your while to take it to New York and sell it there. But that is not really going to arise here." Pragmatically, he sees it as an additional charge that will be absorbed, like others, with a certain amount of give and take. He is less happy about the prospect of repeat resales generating recurrent fees in a declining market. "I do feel that's unfair."
The specific structure and details of the droit de suite vary from country to country. The percentage involved, the kind of resales it applies to and the minimum amount at which it comes into effect all differ significantly.
"There is a baseline, though," Holman explains. "It has to apply to works of €3,000 or more."
That is, no country can set the threshold amount at which the right kicks in at higher than €3,000.
There is considerable disparity across Europe, with virtually everything liable in France, where the threshold is a mere €15. In Britain, where legislation is due to come into effect on January 1st, a parliamentary committee recommended a threshold of €1,000, but in the event the draft legislation plumps for the highest permissible figure of €3,000.
The percentage amount also varies, though the standard rate averages out between three and five percent, weighted towards the higher figure.
Generally, the resale right applies to sales at public auction, though in several countries it is also applicable to sales by galleries and dealers. Yet in France, where dealers' sales theoretically fall within its scope, the premium has not been applied to them in practice. It's important to point out, though, that the droit de suite is not a negotiable right that can be waived, under the terms of specific contracts, for example. It automatically applies to works that fit the criteria.
The consensus among several informed observers of the progress of the Irish legislation is that the threshold will probably be in the region of what Kelly describes as "the maximum minimum", €3,000, and that the level is likely to be about 4 percent, with a cap on liability set at around €12,500. In addition, the right will apply to sales by public auction, with sales through galleries and dealers being exempt. A purchase made directly from an artist which is then presented at auction will also be exempt.
The resale right will apply to the artist's estate for a period of 50 to 70 years after the death of the artist.
On the whole, de Vere White feels that vendors will not be deterred from committing works to auction by the prospect of an additional four percent.
It is likely that the body charged with implementing the droit de suite will be the Arts Council, but the Arts Council is hardly likely to be keen to take on the significant administrative burden involved. Which is where IVARO may well come in. IVARO, the Irish Visual Arts Rights Organisation, was launched last June with the backing of the Sculptors Society of Ireland (the main public artists' body since the demise of the AAI), the Copyright Association of Ireland and the Irish Copyright Licensing Agency.
Its interim board includes Holman, Linda Scales of the CAI, and well-established visual artists Robert Ballagh, Cecily Brennan, Shane Cullen and Vivienne Roche. Ballagh has long advocated the establishment of a clear copyright structure for visual artists and the implementation of a resale right. Indeed, it's hard to find an artist who is against the scheme, even though the vast majority will benefit, if at all, in a relatively small way.
Holman became involved because of her extensive experience with ICLA, which was established in 1992 to protect the interests of publishers and authors. The same principle applies to visual as literary materials. "When an artist sells a painting," she explains, "he or she retains the rights to the use of the image, say on a book cover, a poster or a postcard. A lot of people don't realise that."
IVARO aims to be the agency that negotiates licences for the use of individual works, and collects and distributes royalties. Clearly, the implementation of the droit de suite is closely related to this, and would greatly enhance the viability of a royalties scheme.
"It makes sense for everyone concerned to have one agency involved in collection and distribution of all funds," Holman says. The intention is that IVARO would become that agency. Currently underwritten by the ICLA and voluntary effort, it would initially require grant funding. To that end, since its launch, it has been recruiting members (a countrywide tour is planned for autumn). There is no membership fee, and artists' heirs, as well as artists, are entitled to become members.IVARO also aims to act as a conduit for funds collected by foreign agencies: some 14 of them are members of an umbrella group, European Visual Artists, EVA.
Obviously, the droit de suite will be more significant for some artists than others. De Vere White points out that perhaps 80 percent of the works sold at auction here fetch under €5,000. At those sort of figures, for the artists the financial implications are clearly welcome but hardly earth-shattering.
A relatively small number of living artists should fare better. Works by Louis le Brocquy, an exceptional case, command significant sums at auction. On a more modest scale, mid-career artists such as John Shinnors or Donald Teskey have seen the price of their work at auction increase dramatically in recent years, but even in such cases we are still not talking about vast sums of money in terms of resale rights.
It makes sense that Teskey, like other artists, welcomes the scheme. But, as with many of his contemporaries, he makes an important point that goes right back to the inception of the droit de suite in France. Art is by its nature an insecure occupation. Its practitioners often remain outside the conventional support systems.
"I can't see how the resale right isn't good for artists," as Teskey puts it, "but in a way I think it's even better for their families. It's really nice to feel that you might be able to do something for your family in that way."
www.ivaro.org, IVARO, Corner Halston St/Mary's Lane, Dublin 7
