Supreme Court in Paris rules that auction house can now charge buyers rather than sellers for artist levy.
Extracted from Antiques Trade Gazette | Alex Capon
Christie’s has succeeded in overturning a law in France that insists the Artist’s Resale Right be paid by vendors. The ruling by the Supreme Court in Paris means that the levy can now be transferred to buyers.
Unlike in the UK where auctioneers typically charge ARR to buyers rather than sellers, in France Droit de Suite (as it is known) is traditionally applied to the vendor. According to the wording of the French law, the charge should be made to the seller ‘without exception’.
Christie’s challenged this convention in 2009 when it demanded that buyers pay the resale rights owed to contemporary artists in the landmark Yves Saint Laurent sale in Paris. It sparked a long-running legal case, brought by the dealers’ associations Comité Professionnel des Galeries d’Art (CPGA) and Syndicat National des Antiquaires (SNA) which claimed that Christie’s was gaining a competitive advantage.
In light of the proceedings, the firm reverted to the old reading of the law in 2010 and since then has been fighting to reverse this state of affairs.
Most recently in 2017, the Court of Appeal of Versailles ruled that transferring the royalty charges to buyers infringed the French Intellectual Property Code (which transposes into French law the EU Directive on the resale right).
However, Christie’s decided to appeal this decision and, at the end of last year, the French civil Supreme Court [the ‘Court of Cassation’] overturned the previous judgment.
A Christie’s spokesman said that the firm is “pleased” that the court has “agreed with Christie’s France reasoning”. It started applying the charge to buyers for the last sales in December and will continue to do so for all future sales where Droit de Suite is to be charged.
Rivals Sotheby’s have also confirmed to ATG that it will start charging the levy to buyers in France from this month.
The latest ruling follows a European Court of Justice decision in 2015 in an earlier case involving Christie’s France and the SNA that had reached the same conclusion. The ECJ had ruled that Christie’s could pass the obligation to pay ARR to the buyer via a contract.
In a statement, SNA said it “regrets” the supreme court’s decision, pointing out that the resale right exists as a mechanism to compensate artists based on the surplus value realised by the seller when a work is resold.
“The SNA has fought these proceedings for a decade to ensure that the rights of the buyer were respected and that the interests of the collector were defended. This action was also intended so that market professionals are not penalised by bearing the charge of the resale right twice – once during an acquisition in the auction room, and then at a sale in their gallery.”
ATG contacted French auctioneers’ association Symev but had yet to receive any comment at the time of going to press.
Application of Artist’s Resale Right – explained
While the levels charged for the Artist’s Resale Right (ARR) are enshrined in an EU directive (with very limited room for national differences), individual countries are free to determine how they are applied – whether the seller, buyer, auctioneer or all three are liable for ARR.
In the UK, the government decided in effect that the seller together with the art market professional involved (for example the auctioneer) should be liable.
However, auctioneers have the option in their terms of business/sale to decide whether to charge ARR to either the buyer or seller although, in practice, salerooms tend to charge the buyer.
In France, where Droit de Suite charges have existed longer than in the UK, traditionally the levy has been applied to sellers. However, the ruling in the French civil Supreme Court in November in favour of Christie’s effectively allows the auction house to transfer the charge to the buyer.
It follows a European Court of Justice decision in 2015 in an earlier case involving Christie’s France and the SNA that reached the same conclusion. The ECJ ruled that Christie’s could pass the obligation to pay ARR to the buyer via a contract. The latest French Supreme Court decision is consistent with the earlier ECJ ruling and it will be no surprise if many French salerooms start applying the charge to buyers.