Art Law: Proposed “Lex Gurlitt” May Harm Owners of Lost Art

Yesterday, we had a closer look at the Bavarian initiative in the Gurlitt case designed to address the statute of limitation issue. Today’s guest post by Professor Lorenz Kähler, University of Bremen, reviews this legislative proposal. His assessment is rather sobering: The new provision of the Civil Code (BGB), if adopted, may not help heirs pursuing restitution claims, or even be more burdensome than the current law. But read for yourself:

In reaction to the Gurlitt art find the Bavarian government has proposed changes to the German Civil Code (BGB) which shall benefit the owners of lost art. Until now a lost art restitution claim is subject to a 30 year statute of limitation. The proposed changes would prevent possessors of lost art from raising this defense if the acquisition was not made in good faith. Whilst at first glance this proposal appears to benefit the owner, actually in some cases the proposed law could be to the owner’s disadvantage or, at least, not very helpful.

Firstly the proposal uses a concept of good faith (guter Glaube) which differs from the usual meaning of good faith in other areas as contract law (Treu und Glauben). According to the new Bavarian proposal a possessor of lost art acts in good faith if he did not know that the acquired art was confiscated by Nazi Germany or “only” negligently ignored this.

This understanding of good faith is in accordance with existing legislation regarding acquisition in good faith and means that in many cases looted art will not be restored to the owner. In order to keep the art it will be sufficient that the current possessor did not ignore the obvious. It is not safe to assume that a court will declare an acquisition of looted art made in the 1950ies or 1960ies as grossly negligent. The new proposal will provide greater protection for the negligent possessor of art than for the innocent dispossessed owner, a morally dubious situation.

Yet more alarming is the effect of the proposal on the key question in art law suits: “Who carries the burden of proof?” According to the proposal, the owner has to prove that the current possessor acted with gross negligence or knew about the confiscation. As the Washington Conference Principles on Nazi-confiscated Art stressed a long time ago, this is very difficult, if not impossible: How can the owner provide evidence about events which happened decades ago in which he did not participate?

The burden of proof plays a role not only in the statute of limitation. It is also crucial for the question whether the current possessor of looted art acquired the property by prescription after 10 years of possession (Ersitzung). German courts have started to shift the burden of proof to the possessor in cases where the former owner was dispossessed against his will. For looted art this case law may turn out to be quite helpful; the statutory basis however, remains tentative and it is precisely at this point that the proposed law could have a negative effect. If the proposal becomes law one will be able to argue that the legislator has made a general decision about the burden of proof being with the owner and thus, that the courts must implement this decision not only to the statute of limitation but also to acquisition by prescription.

The same holds for the question whether the owner loses all rights once the limitation period has expired. The proposal assumes that this is the case, however this assumption seems not entirely correct. Property entails more rights than the claim for restitution. There are other possible claims, for example damages for the destruction of looted art. According to existing legislation the limitation period may not have expired for these rights. But the Bavarian proposal – by taking the opposite position – could weaken the position of the looted art’s owners.

It is too early for a conclusive analysis of the proposed legislation; courts will hopefully interpret it differently. But it does seem clear that the proposal will disadvantage owners in cases where the current possessor acted “only” negligently; and it will probably harm victims who cannot prove that the possessor of their property acted in bad faith. The claim of the Bavarian government that the proposal draws the conclusion of the Gurlitt art find is thus questionable at best.

 

An earlier German version was first published in Legal Tribune Online. Lorenz Kähler also made a procedural proposal on how to ensure adequate representation of unknown potential claimants in the Gurlitt case, namely the appointment of a guardian (Pfleger) on their behalf by the Augsburg local court (Amtsgericht). Earlier this week, Lorenz told me that the court had rejected this proposal. Its key argument was that the unknown claimants were sufficiently looked after by the Augsburg Public Prosecution (Staatsanwaltschaft). 

 

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