"No one loves the messenger that brings bad news," Sophocles famously wrote. Recently, New Yorkers displeased with experts who label their hoped-for masterpieces as fakes or misattributions have turned to the courts, suing authenticators and authentication boards, including those of the Andy Warhol Foundation and the Calder Foundation, for negligence, disparagement or even fraud.
A bill recently proposed in New York's legislature by Republican Senator Betty Little and Democratic Assemblywoman Linda Rosenthal aims to protect art specialists who render good faith judgments about an artwork's attribution from lawsuits they say are "meritless" and "expensive and frivolous," raising the burden of proof on claimants and allowing authenticators to recover litigation expenses from the plaintiffs. Fear of lawsuits has created a chilling effect, they say.
Authoritative authentication is essential to a well-functioning art market, the bill's sponsors maintain. Yet authenticators have been stymied, they claim, and many decline to opine at all out of fear of liability and defense costs. New York's Andy Warhol Foundation disbanded its Art Authentication Board in 2012 after defending several lawsuits brought by disgruntled art owners. It won every time, but defense costs exceeded $10 million, according to Joel Wachs, the Foundation's president.
"We were constantly sued by people unhappy with our results even though they agreed in advance to be bound by our decisions," Wachs told A.i.A. in a telephone interview Thursday. "These frivolous lawsuits have had a broad, chilling effect on art historians," he added. Other artist foundations and estates, including those of Pablo Picasso, Roy Lichtenstein and Jean-Michel Basquiat, have ceased to authenticate work, leading to fears of more fakes on the market, greater risk to buyers and unwieldy warranty obligations being imposed on dealers, Jo Backer Laird, an art lawyer at New York firm Patterson Belknap Webb & Tyler, told A.i.A. by phone Wednesday.
"Existing law is very favorable to authenticators," Laird said. "I don't know of any case an authenticator lost where the claim arose out of the opinion they gave. But the litigation can be grotesquely expensive." The new proposal would amend New York's Arts and Cultural Affairs Law, forcing plaintiffs to plead their cases more specifically and prove them by "clear and convincing evidence," rather than the lighter "preponderance of the evidence" standard. "The ‘clear and convincing evidence' standard falls somewhere between ‘preponderance of the evidence,' meaning more likely than not, and the more onerous ‘beyond a reasonable doubt' standard used in criminal cases," said Laird.
The legislation also allows successful authenticators to collect attorney fees, costs and expenses from whoever brought the lawsuit. "The attorney fee provision alone would give a trigger-happy plaintiff something to think about," New York art lawyer Sergio Muñoz Sarmiento told A.i.A. in an e-mail Thursday.
Art experts are fallible, and the proposed legislation would not insulate them from liability, said New York art lawyer Donn Zaretsky via telephone Thursday. But it's "a net loss to society and art history if scholars are unwilling to participate in an open, free, robust discussion," Zaretsky added. "If experts are afraid to offer opinions, it creates a climate hospitable to fraud. In the recent Knoedler situation, maybe fakes would have been identified much earlier if there'd been less reluctance by experts to speak and fear of being sued." New York gallery Knoedler & Co. closed abruptly in 2011 and is caught up in a number of lawsuits over tens of millions of dollars in allegedly fake modern artworks it sold to various collectors and institutions.
The proposal "isn't stacking the deck," Laird said, "but it's making it more difficult for people to bring baseless lawsuits to coerce a result or intimidate authenticators into giving desired opinions. It will give authenticators more breathing space to feel comfortable giving the opinions the art world really needs them to give."
The Warhol Foundation's Wachs "applauds the effort to address this serious and complicated issue." But Zaretsky said he's not overly optimistic about the impact the legislation would have if enacted. "It will make a marginal difference," he said, "but I don't think it will be a game changer. Authentication is still risky, and the economic stakes are very high."