Legal experts advise artists and collectors on recovering works from insolvent galleries

Key facts

• Recent insolvencies of Stephen Friedman, Arusha, and Simon Lee galleries have left artists and collectors struggling to recover consigned works.
• Consignors are unsecured creditors and at the bottom of the pile when a business goes bankrupt.
• Petra Warrington, partner at Wedlake Bell, advises consignors to contact liquidators immediately and provide evidence of title.
• The art market relies on informal verbal agreements, making legal intervention often necessary.
• Consignment agreements should clearly identify works and state that title remains with the consignor.
• Emails, WhatsApp messages, inventory records, transport documents, and insurance policies can prove title.
• Artists are registering disputed works on the Art Loss Register (ALR) to be alerted if galleries try to sell them.
• James Ratcliffe, ALR's general counsel, says speed is key because more transactions complicate recovery.
• Other scenarios include dealers ignoring artists after promising to exhibit works, and consignment fraud.
• Due diligence, such as checking Companies House, is advised before entrusting works to third parties.
• ALR registration can affect marketability and may lead to claims of interference if used without grounds.
• Gallery owners should seek legal advice early to avoid personal liability and never move or sell works without advice once insolvency is imminent.