COVID-19: FAQs for galleries

Posted on 03 August 2020

Online sales

What do I need to think about before putting and promoting our artists' work online?

Targeting
  • Consider what you are trying to achieve commercially with your website and consider the legal implications accordingly – is the emphasis on viewing, marketing or online-only sales? You should also consider the brand and reputational implications, where a pivot to online sales will increase your exposure, as well as your reach.
  • Online viewing rooms can be open for longer than physical spaces and allow for multiple visits. If you are setting up a room, think about the level of detail and sophistication that you want and can afford. Do you want the room simply to mimic a gallery space, or do you also want to allow for close examination of the artworks?
Price transparency
  • Think carefully about whether or not to list prices. Price transparency might seem to go hand in hand with the openness of digital interaction: it may help you reach a larger audience, will likely appeal to collectors, and facilitates online sales. On the other hand, withholding prices can help galleries protect artists by keeping price fluctuations private. It can also limit enquiries to those where there is a genuine interest.
Description, provenance and authenticity
  • There is a risk with online sales that buyers will claim an artwork does not correspond to its online description or presentation. An online description is a public and global representation. Therefore think carefully about how you describe artworks for sale, and consider limiting your liability to what you are contracting to sell. You may also consider preparing or commissioning condition and/or valuation reports, again with appropriate caveats where these may be based on online inspection.
  • Similarly, online selling compounds the problem of guaranteeing authenticity and provenance. Ensure that you have robust procedures in place to prevent fraud, and that your conditions of sale, in particular your warranty of authenticity, reflect the added difficulties where transactions involve online sellers and checks.
Logistics (including invoicing, payment, shipping, delivery and export)
  • Where you are not relying on your own, or another (established) online sales platform, you should check the implications of cross-border transactions. For example, with a business-to-consumer contract and an EU-based consumer, the governing law of the contract may be ousted by any mandatory consumer protection provisions of local law. You should also ensure that the terms of sale have been properly incorporated (i.e. that they have been communicated in clear terms to, and acknowledged by, the buyer prior to the conclusion of the contract).
  • Think carefully about the terms of storage: how long will the artwork be stored for, where and under what conditions, and with what security arrangements? Consider imposing a maximum period of storage prior to collection.
  • Consider how widely you are prepared to deliver, and how artworks will be packed and shipped. You should also consider excluding delivery to certain countries or regions.
  • Bear in mind the possible delay and other implications of export restrictions. The Export Licensing Unit (ELU) has put in place a new temporary procedure (using a digital application form) to issue export licences during the current exceptional circumstances. The procedure is intended only for "essential" export and will be kept under review. For those with items outside of the UK on temporary export licences that are due to expire soon, and where it is not possible to return them in time, there is no need to contact the ELU to request an extension. All temporary export licences will be extended automatically and there will be no sanctions for non-return before the original expiry date.
  • The continued uncertainty around COVID-19, including the potential for further lockdowns/restrictions, makes logistics even more of a challenge. Ensure that your whole infrastructure, from storage to shipping and complaints handling, is resilient and adaptable enough to allow you to provide good service in a difficult climate.
  • Above all, ensure that you have adequate insurance to cover loss and damage at every stage of the transaction, particularly when artworks are being packed and moved.
Distance selling regulations
  • Consider whether the buyer qualifies as a consumer and, if so, what rights they have when concluding a "distance" contract, which includes buying online. Where they apply, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 require you to provide certain information to consumers, including delivery charges and payment arrangements. Consumer-buyers also have the right to cancel distance contracts within 14 days of taking possession of an artwork, and must then be reimbursed.
Artists' consent
  • Check that the agreements you have with individual artists allow for online sales and marketing, as well as any restrictions, otherwise you will need to seek their consent, preferably in writing.
Intellectual property rights
  • Original artistic works are protected by copyright, which expires 70 years after an artist's death and prevents their work from being copied or reproduced without their consent. Where an artist (as is likely) retains copyright, you will therefore need their consent to reproduce the artwork online. There is however an exception under the Copyright, Design and Patents Act 1998 where you are advertising an artwork for sale. The exemption no longer applies once the artwork has been sold, so be careful at that point to take the image down or else seek consent for continued use. You could also consider providing for such continued use after sale within any contractual arrangements with the artist or alternative copyright holder.
  • Once artworks are listed online, you should take care to protect both artists' copyright (albeit that those rights come into existence on creation, you may consider using visual reminders and notifications of the same "All rights reserved" label) as well as your own. For example, a photograph of a painting is capable of being a copyright work distinct from the painting itself; anyone wishing to reproduce the photograph will require the consent of both the artist and/or the creator of the photograph. Consider how the use of images of artworks can be addressed in any agreement with artists alongside the consignment of the tangible asset.
  • Consider whether any moral rights apply, including an artist's right to be properly identified, and their right to object to a reproduction or representation of their artwork that is derogatory.
Websites/moving content online
We want to bolster our website offering to increase engagement. Can we migrate or "resurrect" existing content, such as video footage, photographs and recorded interviews from past events?
  • Generally yes, provided you have the necessary permissions (which may subsist from previous dealings/contracts) - including copyright consent – and particularly where the content might constitute private information.
  • You should also bear in mind data protection legislation (the GDPR and the Data Protection Act 2018): you need to have a lawful basis for processing personal data, which may be that you have secured the data subject's consent, or that your processing is necessary to achieve a "legitimate interest". There are exemptions to some of the rights and obligations in certain circumstances, notably in relation to processing for the "special purposes" of journalism, academia, art and literature.
What about content from other websites, such as images from public collections?
  • Do not assume that images or photographs you find online are free of copyright. As in the analogue world, where copyright subsists, you will need to seek the copyright owner's permission to reproduce or distribute the content. Bear in mind also that social media platforms typically assume a licence to use any content posted by users that is subject to intellectual property rights, for as long as the content remains on the platform.   

 

Business support
What funding is available to support my business?
  • The Government has announced a £1.57bn rescue package for the UK's arts, culture and heritage industries, to include emergency grants and loans, as well as funding to restart projects paused as a result of the pandemic. £500m in grants will be overseen by Arts Council England, which is accepting applications for the first round of funding from 10 August and will also administer £270m in long-term loans of over £3m. The Council is also now accepting applications for its National Lottery Project Grants, aimed at smaller independent organisations and individual practitioners.
  • You may be able to access additional funding from private sources, and you might consider an art-backed loan from a bank (most likely a private bank) or specialist lender.

 

Insurance
Will my existing business interruption policy cover me for COVID-19?
  • Assuming that you are within the claim notification period, whether you can claim or not will depend on the exact terms of your policy. Unfortunately, the majority of policies are aimed at loss caused by physical damage (such as a fire or flood) or else restrict cover to disruptions arising at the insured premises or in the immediate vicinity. They may also have an exclusion for communicable diseases. Many claims have already been rejected.
  • You should talk to your broker and/or seek legal advice. Where appropriate, you should start to quantify and record your losses. In the meantime, the financial services regulator, the FCA, has brought a test case in the High Court seeking clarity on which policies should respond, and how, to claims relating to the pandemic, to ensure that policyholders are treated fairly.
What about a new policy?
  • Most likely not, as the virus is now a "known risk". For new polices, as well as renewals of existing policies, the FCA has stated that insurers should treat customers fairly and that, where firms are changing their policies to exclude COVID-19, it expects them to make consumers fully aware - before renewal - of the policy change and exclusion. The FCA has also suggested that, where a firm may be relying on renewal for continuity of cover, it may not be “treating customers fairly” to refuse to renew a product, even where it is has otherwise been suspended.
How can I minimise my insurance costs?
  • You could seek to renegotiate existing terms ahead of renewal, for example to remove art fair cover, and to improve your payment/credit terms. Be careful, however, not to cancel insurance that you are legally obliged to have, such as employer's liability insurance, or to leave your business exposed to risks such as fire, theft and accidental damage, particularly where a property is unoccupied or less occupied than usual.  

 

Employee/employer issues

For information on the Coronavirus Job Retention Scheme and other coronavirus-related concerns for employers, please see our separate, detailed FAQ.

Refunds and cancellations
Can I claim for losses related to cancelled art fairs?
  • First of all, check your agreement, specifically the amount of refund and compensation offered by the organisers. Some fairs will offer a full refund of booth fees and other deposits; others may offer to defer paid fees to a later date.
  • Then, check the terms of any event cancellation insurance policy, which may cover losses relating to travel expenses and stock transportation costs, as well as specific advertising and marketing costs. However, the policy may have an exclusion for losses arising from a communicable disease and any quarantines or movement restrictions imposed as a result. As with business interruption policies, any new policies are unlikely to cover events cancelled due to COVID-19.
  • In terms of future art fairs, plan ahead and check the small print. What will the organisers offer by way of a refund if the event is cancelled, and what will your insurance cover? Likewise, ensure that your agreements with third-party suppliers such as caterers and shippers are clear as to refunds, etc. so that you can weigh up the full cost of a cancelled event.

 

 

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