In a matter of months, the spread of COVID-19 has caused what may be lasting changes to the art world. As galleries and museums reopen their physical spaces, at the same time as sales and fairs migrate online, we offer some practical guidance both for dealing with the ongoing impact of the pandemic, and anticipating change.
- Consider the ongoing Government support for businesses and employers in general, and the art sector specifically. This includes the business rates holiday for the retail, leisure and hospitality industry; HMRC's Time to Pay service; various grant funds and loan schemes; and the Self-Employed Income Support Scheme (applications for the Second and Final Grant will open on 17 August).
- The Government is due to announce further details of its £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. Arts Council England is also now accepting applications for its National Lottery Project Grants, aimed at smaller independent organisations and individual practitioners.
- Consider claiming for wage costs for employees on furlough (a leave of absence) via the Government's Coronavirus Job Retention Scheme, which runs until the end of October 2020. For more information on this and other coronavirus-related concerns for employers, please see our detailed FAQ.
- 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.
Contracutal, legal and insurance issuess
- To the extent that you have not already reviewed existing contracts to understand your and other parties' obligations – for example in respect of loaned works or works in transit – you should assess your ability to perform (now and in future) and consider agreeing changes to key terms. Where performance is impossible, consider whether you can invoke force majeure or frustration to suspend or cancel a contract.
- Likewise, ensure that you have reviewed your policies to check whether you can claim for business interruption and other losses (including third party claims) arising from COVID-19. Some policies will cover, for example, losses caused by the "action of competent authorities", "loss of attraction", "prevention of access" and "pandemics", as well as those relating to cancelled events or business travel. Use this quieter time to update or renew existing policies, and ensure that your files are up to date – with the correct provenance information, receipts and good quality images – to protect your inventories going forward.
- If works are being sold online, provisions should be included in the conditions for sale to allow for the fact that works may appear differently on screen than in person. Sellers should also consider obtaining condition or valuation reports to guard against potential disputes.
- Consider the potential impact of consumer legislation. For example, if a buyer qualifies as a consumer, they will have certain rights if buying online that they do not have when buying in person, including the right to cancel "distance" sales within 14 days of taking possession of the artwork.
IT and cyber-security
- Assuming that many employees will continue to work remotely, at least for some time, ensure that you have appropriate IT systems and support in place, and that platforms and devices are protected. The pandemic has seen an increase in cyber-crime, which should be of particular concern for the art world given the scope for high-value and remote transactions. Be aware of the potential for online fraud and phishing attacks, and ensure that your authentication and authorisation controls are sufficiently robust.
Reopening a physical space
- You will need to plan extensively for how to keep your business compliant with (changing) rules, and your staff and customers safe. This will likely include a mixture of limiting the number of customers at any one time; implementing a one-way system or "by appointment" viewing; providing hand sanitiser and/or masks; installing protective barriers/screens; and ensuring that premises (and objects) are thoroughly and regularly cleaned.
- Make sure you keep these measures under review, and keep track of evolving guidance and legislation.
- Now is also a good time to assess your security provisions and whether they need to be updated in the light of different/reduced opening times, new staffing arrangements or new insurance requirements. You may, for example, decide to invest in additional on-site security cameras and alarms, or to outsource security personnel.
Online sales and engagement
- A considerable proportion of business is likely to be conducted online for the foreseeable future. This is both a huge opportunity for a sector that had been slow to embrace the digital space, as well as a burden (at least initially) for businesses forced to adapt.
- Firstly, consider your online presence and how you engage with customers remotely. Now is the time to refresh your website and think creatively about content that will draw users' attention, such as videos, podcasts and other news or commentary, as well as email updates and newsletters. Regular communications (including social media updates) are also a good way to keep customers informed about new measures related to reopening and online sales. If you have not done so already, consider directing all enquiries related to COVID-19 to a specific email address.
- Secondly, consider the practicalities of selling online: How will you display works, and to whom? You may require interested parties to register before accessing an online viewing room (and at the same time seek their consent to be added to a mailing list). How will you take payment securely, and how will you ensure compliance with the new anti-money laundering regulations?
- Finally, consider how digital viewing and sales will complement viewing and buying in person. For example, offering virtual tours (possibly at a reduced rate) may prove to be a valuable, long-term way to reach a wider audience, not just a lockdown stopgap. Monitoring online footfall and talking to customers will help you assess which changes should survive the pandemic.
As a Firm, we have implemented our own containment policies and created a cross-Firm group to answer any legal, practical or operational questions that you may have. Please contact us with any queries.