overpriced or even over-exposed, “burnt” on the market-place, and so no longer desirable and saleable for its purported value. This should warn any collector who is about to invest hard earned money in fine art of the potential risks and to conduct proper and thorough due diligence before making a purchase. In the spring this year, the Art Due Diligence Group was launched. This company brings together leading professionals in the core elements of art due diligence. It provides a streamlined and costeffective service to help buyers and sellers conduct appropriate due diligence on their artworks pre-sale and also to provide appropriate assistance in the event of any problems that may arise post-sale. Why now? The art market has long established traditions of highly informal and often opaque transactions, commonly without even written contracts, where the actual buyer and seller sometimes never even meet. This can cause great problems. In any financial market where there is the potential to make large profits, there are inherent risks of fraud and costly errors. The art market is no different; however where the systems and procedures for transactions can be opaque and are not uniform, the risks to its participants are very great. To date, there is no standard process for a fine art transaction, unlike the purchase of land, which has clear and well understood processes which every person engaging in a transaction of real estate can follow. Where the purchase of diamonds is concerned, there was established the Kimberley Process Certification Scheme (KPCS) in 2003 to ensure a compliance process to protect against
conflict diamonds entering the mainstream rough diamond trade. The Art Due Diligence Group makes due diligence easy for buyers and sellers. Its aim is to introduce straightforward and clear processes and to begin to standardise due diligence in art transactions and ultimately to take unnecessary risk out of high value deals. Says Jessica Franses, MD of Vitruvian Arts Consultancy Ltd (a fine art brokerage service), art lawyer and a director of the ADDG, “Overcoming the hurdles can be tricky and we plan to de-risk and demystify the art transaction process. Our checkpoint system involving all the members of the group will assist with a quick efficient and smooth process for all pre-investigatory work prior to private or indeed public sales. This also applies to transactions which might otherwise be aborted because one of the parties to it might see a ‘red flag’. By conducting different types of verification, we can aim to eliminate hurdles.” The Group aims to work alongside collectors’ advisers, art dealers, galleries, auction houses and other professional advisers to help them by providing an independent checking process. The founding members of the group cover the following disciplines: database and title claim checks, provenance research, forensic research, condition reporting, security and commercial due diligence, brokerage services for handling sales transactions, art legal services for contracts and commercial transactions, art recovery for stolen or looted art, reputation management, mediation and litigation services. www.artduediligencegroup.com.
www.magazine-art.com
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