Legal Updates

Artist’s new resale rights – Droit de Suite – From 1 January 2006

The European Community has passed a directive to give artists a right to royalties known as the Droit de Suite (“DDS”), which is to be implemented by 1 January 2006. Artists (and their heirs in 2010) will be entitled to a percentage of the resale price of their works up to a maximum of EUR 12,500 (£7,820). The DDS attempts to put artists on an equal footing to authors of copyright work by ensuring artists also receive a royalty on the sales of their work. The DDS is not a new concept but rather has been operating on the continent since the 1920’s and most EU member states have such rights already in place. However, the London art market sees many disadvantages to the DDS.

Auction houses, galleries and dealers are concerned that the DDS will result in loss of business because it will force administrative costs and sales to shift to the US and Switzerland where there is no DDS.

Artists also argue that they will receive little benefit from the DDS. They believe that sales prices will drop to take into account the extra charge. Alternatively, more sales could become private so as to avoid the DDS. Yet another concern is the number of artist which, in reality, will actually benefit from the DDS. It is likely that only commercially successful artists, many of whom are dead, will obtain any significant advantage from the DDS.

The DDS will apply to all resales following the first sale by the artist, involving sellers, buyers and art intermediaries such as art galleries and dealers. Member States may provide for an exception from the DDS where the seller has acquired the work directly from the artist less than 3 years before the resale and where the resale price does not exceed EUR 10,000. Given the UK’s opposition to the DDS, it is likely to implement this exception.

The DDS is unassignable and inalienable and therefore cannot be transferred, sold or waived.

The DDS is calculated on a tapering scale as the sale price of the work increases. Member States are free to set a minimum sale price for which DDS will apply. At the moment the minimum resale price proposed in the UK is EUR 3,000 (which is the maximum threshold permitted by the directive).

It is still uncertain how DDS will be administered – either by a collecting society or leaving it to the market. It is also unclear who will be liable to pay DDS.

Please contact us for more information on DDS [email protected]

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© RT COOPERS, 2006. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.