LAW OF ART FALLING APART[dagger], THE

FDCC Quarterly, Fall 2004 by Perry, Bill, Carter, Stephen

I.

INTRODUCTION

Lawyers like to compartmentalize problems, organizing them neatly into boxes in order to apply logical solutions. The emergence of "new" art, in which the artist is free to choose any medium at all - from wax to ice or, more controversially, blood to bedsheets - provides real challenges to the lawyer.

The insurance lawyer typically reviews policies designed to protect owners from damage to works of art. Given the prevalence of "new" art, however, the lawyer is likely to encounter novel disputes which inevitably will surface when it becomes apparent that the traditional legal framework does not accurately or adequately fit the wave of new art. For the lawyer, art most likely will "fall apart" in two distinct claims. More rarely, there could be erosion of the "honour and reputation" of the artist - damage and loss arising from infringement of intellectual property rights. More frequently, in commercial terms, insurance claims tend to involve physical damage to the works of art themselves. From the liability perspective, interesting questions surface regarding physical damage if deterioration is inherent in the nature of the work. Should insurers cover such losses?

As background to this question, it is perhaps helpful to examine the concept of contemporary art in its more extreme forms. In the UK, for example, the "Young British Artists" phenomenon has emerged. For the lawyer, this phenomenon presents a canvas that is stretched against what can only be described as a framework of old British law. The terminology itself, however, is little more than ten years old. Charles Saatchi staged a series of exhibitions entitled, "Young British Artists," that began in 1992. Perhaps the most representative work displayed was Damien Hirst's live tiger shark that was used for a work entitled, "The Physical Impossibility of Death in the Mind of Someone Living."

Hirst's work, while notorious, was part of a longer standing tradition. Robert Rauschenberg, who is known for working in mixed media in unusual combinations, won the Venice Biennale's grand prize back in 1964. His success marked a turning point in the global assessment of artistic prestige. "Conventional" painting became overshadowed by "combination" works that brought together three-dimensional "real" objects with traditional media such as paint and photography.

Moving forward from 1992, Sarah Lucas exhibited one of her most famous works, "Two Fried Eggs and a Kebab," at a shop in Soho. Every morning she bought a kebab, fried the eggs and arranged them carefully on a table. The notoriety of Lucas's work arose from the fact that Charles Saatchi bought it. A few years later, in 1997, Ron Mueck's "Dead Dad" marked another staging post. Sean Rainbird, curator at Tate Modern in London, himself has caused controversy, acquiring works by Lucas and her contemporaries, Rachel Whiteread and Catherine Yass. Rainbird also is known for his interest in contemporary German art, including the work of artists such as Joseph Beuys, who deals with primal and elemental forces: the earth, animals, excrement and death. Perhaps the most recent event has been Damien Hirst's own show, "Romance in the Age of Uncertainty," which concluded its London showing in October 2003. It featured tanks, formaldehyde, spots, flies and blood on every floor.

The most significant unifying factor joining all of these examples is the fact of their perishability, to a greater or lesser extent. Perishability, however, does not always sit easily with the legal concept of fortuity, which is a pivotal issue when the lawyer is presented with a claim for damage or deterioration.

II.

THE GENERAL INSURANCE FRAMEWORK FOR WORKS OF ART

A. "All Risks" Policies

Works of art generally will be insured under an "All Risks" policy, which remains in force for an agreed period of time. "All Risks" cover does not literally mean "cover against all risks," however. Debate persists about whether it would be more appropriate if the term "open peril" was used, in contrast to "named peril" policies. To be successful, an insurance claim must concern fortuitous or accidental damage; it is not sufficient to show damage alone. In that regard, all loss is fortuitous, save that which was inevitable at the beginning of the cover or was caused by the wilful misconduct of the assured.

Liability insurance generally is procured by those who deal in fine art or those who act as custodians - private owners, museums, exhibitors, galleries, and banks. Typically, the risks covered include physical loss or damage arising from fire or flood, loss or damage in transit, or theft. According to a 1921 House of Lords decision, which concerned an "All Risks" policy, an inference that a fortuity occurred might arise when the insured subjectmatter begins a voyage in sound condition and is damaged upon arrival1 (although packaging and transit are discussed in greater detail below).

B. The Role of Marine Insurance Law

The Marine Insurance Act of 1906 codified the common law and articulated established principles, such as the duty of good faith imposed on the assured under a contract of insurance. Generally, it is accepted that the Act also represents the law of non-marine insurance to a significant extent and, as such, it is of interest to those who insure works of art as well.