Can the New York Legislature Bring Back Authentication Boards? The Effect of Proposed Legislation on Liability for Art Authenticators

Schechter, Hannah

On April 11, 2016, the New York Senate passed Bill S1229A and delivered it to the New York Assembly.1 The Bill is described as “an act to amend the arts and cultural affairs law, in relation to opinions concerning authenticity, attribution and authorship of works of fine art.”2 The purpose of the Bill is to “enhance protections under the law for individuals who are employed as art authenticator in the visual arts community.”3 Why does the New York Legislature feel the need to enhance protections for art authenticators? The Bill’s sponsors, Senators Betty Little and George Latimer, justified the Bill by stating that, “in recent years, the work of authenticators has come under pressure from meritless lawsuits against those who render opinions in good faith. Such defense of expensive and frivolous lawsuits has left many in the industry reluctant to lend their expertise in authenticating art works.”4 According to Senators Little and Latimer, this reluctance to opine is a problem because authenticators are “drivers of the art market,” and they act as safeguards against copies entering and devaluing the market.5 The New York City Bar Association’s report on Bill S1229A suggests that legislators may be concerned by recent high profile fraud cases, such as those arising from the sales of a number of forgeries through the former Knoedler Gallery, which may indicate that the market is not functioning properly due to a lack of freely given expert opinions.6

Since the seminal case of Hahn v. Duveen was decided in 1929, authenticators have feared liability for expressing their opinions. 7 So what has prompted the New York Legislature to act now? The legislature may be responding to the recent closures of several authentication boards, and the resulting public outcry. The boards are closing in an attempt to avoid the costs of defending more lawsuits, and have brought new attention to the chilling effect of liability on art authenticators. Senators Little and Latimer are likely referring to the suits that prompted the board closures when they mention “meritless suits” in their memorandum.8

According to Senators Little and Latimer, “[t]his bill would clarify the role of art authenticators to ensure that those who practice their profession, in good faith, would be afforded protections under the law to ensure that only valid, verifiable claims against authenticators are allowed to proceed in civil court.”9 This implies that the Bill should give authenticators the power to stop the sort of “meritless suits” mentioned above on a motion to dismiss. This would make sense, since many of the commentators stress that it is not liability per se that is deterring authenticators, but the costs of defending litigation.10 To avoid or lessen these costs, authenticators must have the legal tools to stop a suit on a motion to dismiss or on summary judgment. This Note will first lay out how authenticators—particularly authentication boards and artist foundations who author catalogues raisonnés—currently function in the art market, and how the financial stake in authenticity opinions has increased. It will also delineate the existing legal protections and liabilities that apply to authenticators, and how these liabilities have likely increased due to recent court decisions in New York. In Part II, this Note will examine how the proposed legislation, as intended, would (or would not) enhance legal protections for authenticators. Finally, this Note will suggest a stronger scheme for protecting authenticators that the legislature could pass, while also recognizing the limitations the New York Legislature faces in addressing the current chilling effect on authenticators.

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October 31, 2017