Firm News
Partner Jonathan Freiman Featured in Citywealth Weekly on Art Forgery and Risk Mitigation
Jonathan Freiman, Partner and Chair of the firm’s Art and Museum Law Practice Group, was recently featured in Citywealth Weekly.
Jonathan emphasized that the critical question for collectors is what they do in the immediate moments after a purchase if they want to avoid being left with an expensive forgery. He noted: “An owner who finds out they’ve spent millions on a forgery is in a bad position all around. Insurers are no different than dealers or auction houses in this regard: they don’t want to pay for fakes. Whether a forged work is ‘covered property’ will depend on the specifics of the insurance policy language, but even if it’s covered, unless there’s an agreed value to the property, any recovery is likely to be quite low.”
On mitigating risk, Jonathan advised: “If a piece costs enough, it’s worth hiring experts immediately after buying the piece to do a forensics review and a provenance review.” He continues, “No one wants to do that when they’ve just spent a huge sum on a piece that a reputable dealer or auction house has promised is genuine. But if you wait until you suspect it’s a forgery, it’s usually too late.” He explains that if a promptly commissioned forensics or provenance review raises red flags, a collector can generally return the work to the dealer or auction house, and if that’s not possible, has at least learned enough fast enough to file suit against the dealer or auction house without being blocked by the statute of limitations.
Jonathan also suggests that options to mitigate risk include putting the work in a trust and then working with an art loan specialist to borrow against the work’s value.
Lastly, Jonathan says, “The overall big picture point is that collectors can best protect themselves from the risks of forgery by acting right after they buy the piece, when they have no reason to think it’s a forgery. But once they find out it’s a forgery, if it’s too late to return it to the dealer or auction house, there’s much less they can do to protect themselves.”
To read the article, click here.
