Art Law: Auction House Liable in Sale of Fake Expressionist Painting

Last year, Wolfgang Beltracchi had been making headlines as one of the most, shall I say, “successful” counterfeiters in recent art history, when criminal proceedings were brought against him. Beltracchi had specialized in forging German expressionist painters. He managed to invent a completely fictitious early 20th century art collection, the Werner Jägers collection. His works of art thus gained a first class pedigree, and were sold through renowned auction houses such as Christie’s in London or Lempertz in Cologne.  In the criminal proceedings against him and his helpers, it became known that the turn-over Beltracchi’s art scam had generated was in the tens of millions of Euros. The buyer of a fake painting brought an action against the Lempertz auction house for damages. In a judgment issued today, the District Court (Landgericht) Cologne held Lempertz liable and ordered it to hold the buyer harmless for the purchase price in the order of EUR 2.9 million.

The painting in question, “Red Painting with Horses” (Rotes Bild mit Pferden) had been described as a lost piece of work by Heinrich Campendonk, a German expressionist painter and part of the “Blaue Reiter” movement. The issue before the court was what duties of care the auction house owed to the buyer, and whether these had been violated. The court held that the auction house should not have relied on the fact that “Red Painting with Horses” had been included in the Campendonk catalogue raisoné, since there was no scientific basis for doing so. Forensic evidence had established that paint used by Beltracchi did not exist in the 1910s. The full written judgment is not yet available, but it appears that, in the court’s opinion, Lempertz should either have made appropriate qualifications to the statements in the auction catalogue, or have commissioned a scientific analysis of the painting.

Lempertz have stated that they will appeal today’s judgment, so watch this space for future developments – whatever the final outcome will be, this case is bound to shape the standards of care for auction houses under German law.

****

Here is an update on this matter.