News & Events

Artists Royalties Update

22 June 2006

New Regulations transposing into Irish law EU Directive 2001/84/EC on the resale rights of authors of original works of art, were announced by Mr Michael Ahern T.D., Minister for Trade and Commerce at the Department of Enterprise Trade and Employment on 19 June 2006.

S.I. No. 312 of 2006 (the “Regulations”) came into effect on 13 June 2006 and will have implications for the collection and redistribution of royalties that are now due to living artists as a result of resales made on or after that date.  The right entitles artists to a percentage of the net sales price every time a piece of their art is sold on the art market. The effect of the introduction of the Regulations is that any living artist whose work sells at auction or through an art market professional vendor in Ireland for more than €3,000 will have a right to ask the vendor for the details of the sale and sale price.

Under the Regulations, the minimum art value threshold (below which no royalty is payable) has been set at €3,000 (net of tax), the highest permissible threshold in the EU Directive. The thresholds chosen by other member states are much lower, with that of the UK set at €1,000. The duration of the resale right is the artist’s lifetime. The rate of royalty on the first €50,000 of the sale price is 4%. However, these are interim measures until the upcoming Intellectual Property (Miscellaneous Provisions) Bill revisits these issues in early 2007, when it is likely that the minimum art value threshold will be reduced.

Minister Ahern stated that the intention had been to implement this EU Directive through an Act of the Oireachtas.  “However, following consultations between my department and the Department of Arts, Sports and Tourism and the Attorney General’s Office, I have decided that, rather than wait for all the more complex matters to be addressed in their entirety, a more immediate two-stage approach to this transposition should be adopted”.  Without the consultation procedures, and ensuing public awareness, that the passing of an Act of the Oireachtas would have entailed, senior art dealers have been surprised at the timing of the introduction of this new right.  Some have warned that the introduction of the droit de suite might damage the art market and lead to Irish paintings being sold, for example, in America where there is no levy, or between private vendors who are not within the scope of the legislation.  Private sales, not involving art market professionals, do not fall under the EU Directive.

Also called the “Droit de Suite”, (the right to follow), Artists Resale Right Schemes have operated in many European countries since the 1920’s.  After World War II the number of states providing artists droit de suite increased steadily.  Most EU member states had operational schemes in place by the early 1990s.  Britain, Ireland, the Netherlands and Austria were those who held out against having droit de suite.  Under the previous rules, for example, Irish artists were entitled to a resale levy if their work was sold in France, but their French counterparts whose paintings were sold in Ireland were not.

Artists can choose to pursue the royalties on an individual basis, or they could mandate another body to collect the levy on their behalf.  IVARO (the Irish Visual Artists’ Rights Organisation Ltd), hopes to become that body, and has criticised the Regulations as being a “stop-gap” measure.

Following the failure of the government to implement the legislation on January 1^st of this year, legal action was instituted against the State by artist Robert Ballagh, claiming redress for lost revenue.  While Ballagh might not have had a cause of action against individual art dealers as the resale right was not yet part of Irish law, he could claim against the State for its failure to implement an EU Directive on time under the principle of state liability. Ballagh’s case was due for hearing in the High Court on June 30^th.  It is widely believed that the Regulations were put together in order to avoid a court finding in Ballagh’s favour.

It is hoped that the forthcoming Intellectual Property Bill will broaden the scope of the right into a form more favourable to artists and clearer for art market professionals to implement. However, splitting the implementation into a statutory instrument, to be followed by a Bill, has, in our view, added confusion to what was in any event a controversial right. The range of intellectual property protections available in Ireland has as a result of this new law been considerably widened.

For further information contact Jeanne Kelly, Senior Associate in the Intellectual Property Unit.