‘It is a well known melancholy truth that the tribe of auctioneers, connoisseurs, and picture dealers have monopolised the trade of pictures, and made it a matter of ridicule to purchase any modern production, or encourage an English artist. By this craft the leaders of taste of these kingdoms acquire fortunes and credit, whilst many of our painters, men of genius and industry, are absolutely starving.’

This comment was published in 1861 by the St James’s Chronicle, a forerunner of London’s Evening Standard. It reflects a then growing recognition and concern for the welfare of impoverished artists living and working in major European cities, especially in London and Paris, where traditional salons and private patrons had significantly declined. By 1893 a proposition had emerged in France to create an automatic legal right of artists or their heirs to receive a small share of the resale price of their works in what had become a vibrant secondary market. In 1920 it was enacted into French law as droit de suite. This ‘right to follow’ spread through continental Europe during the 20th century. In 2001 such laws were harmonised by a European Union Directive requiring all Member States to enact into their national laws a common EU-wide scheme by 2006.

In February 2006 the UK enacted the Artist’s Resale Right regulations (ARR), which gives EU-citizen creators of original artworks an automatic legal right to receive a royalty payment each time one of their works is resold (in the UK and throughout the EU) in a sale involving an art-market professional; and this right lasts for 70 years after death to benefit artists’ heirs. ARR only applies to resales of €1,000 or more and is calculated on a sliding scale (up to 4% of the resale price), with €12,500 as the maximum royalty payable on any single resale. The royalty is subject to ‘compulsory collective management’, which means that artists cannot claim their royalty themselves. Instead, art-market professionals are legally responsible for paying the ARR to an artists’ collecting society, which then pays its artist members. Two such collecting societies operate in the UK: the Design and Artists Copyright Society (DACS), and the Artists’ Collecting Society (ACS).

DACS recently published a retrospective snapshot of its ARR operations, Ten Years of the Artist’s Resale Right: giving artists their fair share. DACS was established by UK artists for artists in 1984 as a not-for-profit-share organisation to administer artists’ copyright, and in 1994 began a national campaign for the UK’s introduction of ARR. DACS’s report paints a positive picture, including the following notable points: ARR successfully balances the interests of artists with the interests of the art trade; ARR recognises the continuing stake an artist has in the economic value of their work; and ARR has mechanisms in place to protect the interests of the art trade, including especially the cap of €12,500 on the total royalty paid on individual works sold for over €2m.

ARR’s operation is regularly monitored by the EU, UK Government, art-trade representative bodies, artists’ collecting societies and independent researchers. In 2011 the European Commission reported that ‘no clear patterns can be established to link the loss of the EU’s share in the global market for modern and contemporary art, with the harmonisation of provisions relating to the application of the resale right in the EU on 1 January 2006’.

DACS’s report gives voice to its artist members. ‘Whenever something like this starts,’ argues Jeremy Deller, ‘people say “it’s going to end the art world, it’s going to be terrible” but it never happens. The art world just carries on and gets bigger and bigger. It’s important for artists to benefit from the sale of their work. The thing is that auction houses make so much money on a single sale. Obviously that’s not pure profit but they make incredible amounts of money – much more than virtually any artist, much more than any museum has to spend on art so I think it’s good that they put something back to the people who made it. A lot of people do very well out of the art market and obviously the artists aren’t always the ones doing that.’ Gavin Turk says: ‘For me, the reason why Artist’s Resale Right is something I really value is because it puts me back in contact with pieces of work. It’s like a tracking system and that’s really useful to see how my work is moving in the market place … and obviously the money helps as well.’ DACS stresses that ARR also benefits artists’ heirs, for whom it provides invaluable support towards managing an artist’s legacy in helping to meet costs that accumulate through conservation and authentication. ‘The royalties which are collected by DACS,’ Beverley Heath-Hoyland says ‘are vital as it helps to run the artist estate so that the work continues to be alive in the world for future generations to enjoy.’

Artists’ Collecting Society is also a not-for-profit-share organisation established in 2006 (at the request of artists, dealers, galleries and auction houses) specifically to administer ARR in the UK as an alternative to DACS. ACS has issued a press release celebrating the 10th anniversary of ARR, and its benefits to artists and estates; it stresses the importance of financial support for artists as well as contributing to the protection and promotion of artists’ legacies and supporting various charitable and educational projects. Both DACS and ACS share the view that the UK should put in place legal safeguards to combat recalcitrant dealers and galleries (who fail to report relevant resales and evade paying ARR royalties).

Since 2006 over £52m has been distributed in ARR royalties: £46.9m by DACS to 3,900 artists and estates; and £6m by ACS representing a further 1,000. During this period there have been significant ARR developments beyond the EU’s 28 Member States. ARR has now been enacted in 53 more countries, making a 81-strong international pressure group that has been advocating the introduction of a worldwide treaty to create a level ARR playing field for artists and the art trade (as has been effectively achieved for copyright). Progress is being made; in May 2016 the United Nations’ World Intellectual Property Organisation will for the first time consider ARR from a global perspective. Meanwhile, key countries in the world economy, and especially in the art trade, are being lobbied to introduce ARR legislation, with encouraging signs of success.

Introduction of ARR into national laws is currently being considered by various governments and legislatures including China, Japan, Switzerland, and Canada. In the US the American Royalties Too (ART) Act of 2015 was introduced into Congress for consideration later in 2016. ART proposes ARR royalties are paid to artists only for auction sales of at least $5,000; and (like the EU scheme) protects the art trade by capping the royalty for any one auction sale at the lesser of 5% of the purchase price or $35,000, and requires payment by auction houses to an artists’ collecting society. Provision is also made for enforcement of foreign ARR from countries that reciprocate for US ARR. If ARR were enacted into federal US law, it is highly likely that most other countries, including especially China, would do likewise.

© Henry Lydiate 2016

This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.