Art valuers must be diligent given risk of forgeries

Estimates on the exact number of forgeries in art markets and museums vary widely, with some experts believing a conclusive number is impossible to determine.

In this article, the terms fakes and forgeries are used interchangeably, employing the definition put forward by Eric Hebborn.

In Drawn to Trouble: Confessions of a Master Forger, Hebborn states that fakes and forgeries are merely misattributions that may be intentional or not.

The difficulty of gauging the extent of the problem is, in part, a result of professional forgers such as Elmyr de Hory, a Hungarian-born painter who is thought to have sold more than 1,000 forgeries to reputable galleries and museums around the world during the 20th century.

In some cases, those selling artworks do not know that they are fraudulent. More commonly, however, sellers choose not to conduct the due diligence required to confirm an artwork's provenance, legal ownership or authentication because they have a financial stake in it being sold as authentic.

Galleries and dealers have been found to be active conspirators or complicit in fraud for financial gain, e.g. the Knoedler Gallery case which resulted in the closure of a world famous enterprise.

Prospective buyers, therefore, need to carry out their own due diligence before purchasing an artwork to avoid these pitfalls.

Since forged artworks are often given a fake provenance as well, the valuation, sale, purchase and any subsequent transfer of artworks can be significantly affected. Expert authentication and provenance verification are therefore crucial at each transaction stage for any artwork or artifact.

Although similar in nature, authentication differs from appraisal, which aims to provide a financial market value. While tedious, exhaustive authentication and verification require multifaceted processes, including, but not limited to, academic and legal reviews, scientific analysis and ownership history investigation.

Verifiable provenance is also vital in the purchase of antiques and antiquities to assure legal ownership, proper attribution and the preservation of the knowledge associated with the object and its culture. Dealers operating in illicit art and cultural heritage depend on the falsification of written provenance, as seen in the cases of the convicted antiquities dealers Giacomo Medici and Gianfranco Becchina.

The broader value and reputation of a particular artist's work can also be greatly affected by a substantial number of forgeries being introduced to the market. This may cause prospective buyers and collectors to avoid dealing in works by that artist, or pay significantly less given their concerns over authenticity.

One example of this is artwork created by Elmyr de Hory. So many forgeries purported to have been created by de Hory were introduced to the market after his death that his works have decreased in value substantially, and many auction houses will not consign works purported to be by de Hory anymore.

Valuation is also extremely important to lenders, insurance agencies and other entities who have a financial stake in artworks. An accurate valuation is essential to avoid substantial financial losses for having covered a forgery for the value of an authentic piece.

In the case of the Knoedler Gallery, the gallery and its curator were taken to court in 2016 regarding their roles in the sale of forged masterworks purported to be by Mark Rothko, Robert Motherwell and Jackson Pollock.

The due diligence they have conducted into not only an artwork and its provenance, but also the person or entity from whom they have bought it, will be crucial in determining any criminal or civil remedies available to them.

The efforts made in this regard will often determine whether law enforcement investigating will consider the purchaser a co-conspirator or an innocent buyer.

Conducting exhaustive provenance research will also aid a purchaser in any civil litigation by showing due diligence efforts that a reasonable jury will factor in when determining liability and compensation.

The sale of artwork also depends on confirming authentication and verifiable provenance. Whether carried out by an auction house, gallery, or private transaction, sales of artwork found to be forged can have serious legal implications for sellers, as seen in the Knoedler Gallery case.

As a consequence, research into any transactions or previous examinations along with their accurate documentation must be conducted and retained in case it is needed in future legal proceedings.

The efforts made to authenticate an artwork and its provenance prior to its sale will often be factored into civil and criminal proceedings. They will often be vital considerations in determining knowledge and liability if the artwork sold is later determined to be inauthentic.

Countries have vastly different laws concerning the protection of art and heritage, e.g. national patrimony laws, the definition of crimes, and the thresholds that need to be met to hold a purchaser or seller responsible for a stolen or forged artwork that falls within their jurisdiction.

The due diligence undertaken by sellers is considered both a mitigating and aggravating factor in any legal proceedings. 

Minimal due diligence will often be seen by judges or juries as a lack of good faith on the part of the seller, creating a higher level of culpability and thus lead to more severe criminal or civil penalties.

Thus, it is incumbent on the seller to document all due diligence and research conducted in order to show good faith and exhaustive efforts made in that regard.

Whether you are beginning your collection or it is years in the making, it is crucial to take the time to verify your acquisitions and be proactive in the detection of forgeries in the art and antiquities markets.