Bulletins Story: RESALE RIGHT: A VALENTINE'S DAY GIFT FOR ARTISTS

Date: 21.02.2006

The Artist's Resale Right Regulations 2006 came into force on 14 February 2006, giving artists (including photographers) the right to a royalty on the resale of their works.

The new law is intended to ensure that artists and their estates benefit from the value of resales of their work, and to put them on an equal footing with other copyright owners in the fields of writing, composing and performing. The regulations implement an EC Directive of 2001. Similar rights, known as droit de suite, have been in force for many years in a number of European countries (in France since 1920).

Artists now have a right to a resale royalty on sales of their work other than the first transfer of ownership by the artist. The right only applies if either the buyer or seller (or their agent) is 'acting in the course of a business of dealing in works of art'; this would include galleries, art dealers and auction houses, but not private individuals, corporate collections or museums.  The sale price must be at least EUR1,000.

Resale right applies to most forms of artwork, specifically "any work of graphic or plastic art such as a picture, a collage, a painting, a drawing, an engraving, a print, a lithograph, a sculpture, a tapestry, a ceramic, an item of glassware or a photograph."  Editions of work are covered provided the copies are of a limited number and made by or under the authority of the artist.

There is an exception where work is bought direct from an artist and then sold within 3 years for less than EUR10,000.

The royalty will be payable for the same period as copyright, ie normally the lifetime of the artist plus 70 years.

On an artist's death the resale right will be transmitted to the artist's personal representatives, who will be able to claim royalties.  However, royalties will not be payable on sales of work by dead artists until at least 1 January 2010. The government has stated that it will seek to extend this date indefinitely in order to 'protect the most valuable sector of the UK art market, which is works by deceased artists.'

The royalty will be payable on a sliding scale of percentages of the sale price when a work is resold: from 4% (on the first EUR50,000) down to 0.25% (on anything above EUR500,000). The maximum royalty payable on any sale is EUR12,500.

The royalty is payable to any artist who is a national of the UK or of any EEA country (EU plus Norway, Iceland, Liechtenstein) or of any of the other countries which have similar laws. These countries are listed in the regulations.

The right cannot be sold or transferred during the lifetime of an artist, nor can it be waived. This will ensure that artists are not pressured to sign contracts excluding the right to a royalty.

The royalty cannot be collected by artists on an individual basis, but only by a Collecting Society acting on behalf of the artists. DACS is the main UK Collecting Society. DACS has published guidelines and explanatory notes on the new right, www.dacs.org.uk.

The implementation of the regulations follows an extensive government consultation in 2005 and lobbying from the London art market which maintained that the new law would drive sales away from London to centres like New York and Geneva, where there is no equivalent law. It is likely that this fear will prove to be exaggerated, given the modest royalty rate and the capped royalty per sale; and, as commentators have noted, when the market introduced a whacking 20% buyers' premium some years ago, this had very little adverse impact on sales.

Although the resale right will only affect some 2% of the UK market in works of art by living artists, the regulations are still an important step in (as the Government puts it) 'ensuring a just reward for living British artists' creativity while protecting the valuable UK art market.'

For further information or advice on how the new regulations may affect you, please contact Nicholas Sharp or Charlie Swan.

Nicholas Sharp and Charlie Swan

Photography & Visual Arts

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