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Updated: Jul 15, 2022

This week, after a two-year pandemic hiatus, I attended the annual conference of the Fondation pour le Droit de l'Art at the University of Geneva, of which I have been a member for some time.

The topics addressed were the environmental sustainability of the art market and an examination of the activities carried out by intermediaries in art transactions.

I am well aware that I represent a scarcely politically correct position, but, in general, the subject of environmental sustainability just does not appeal to me: one always runs the risk of having only a partial view of the factors that affect it or of hypothesizing green solutions that are hardly viable in practice.

On the contrary, I found it of extreme interest to be able to discuss the legal profiles pertaining to intermediation activities in the art market and to listen to the practical cases presented by the speakers in elucidation of the vademecum that will be published by Responsible Art Market (RAM), an organization that analyzes the art market with the aim of endowing it with shared guidelines that are as uniform as possible.

Here is the link where you can find the publication, as well as other guidelines:

Below, I detail the main aspects, without prejudice to my and my firm's availability to provide interested parties with the appropriate insights.


Of course, the thought immediately runs to the figure of brokers, but intermediaries should also be considered galleries, auction houses, the varied figure of art advisors and, more generally, anyone who offers their professional input in a commercial transaction related to a work of art.

In this broader sense, lending institutions, lawyers, insurance companies, etc. also compete.

RAM's toolkit is addressed to all of them with the aim of identifying the major risks and issues that the market offers them, offering insights to be able to deal with them by mitigating their negative implications as much as possible.


In the field of art, the role of intermediaries is far from defined: often an advisor can also be found performing mediation or fiduciary interposition tasks, an auction house also operates in private negotiations, perhaps even offering advisory services, which are also normally offered by financial operators who hedge or insure commercial transactions.

It is clear, then, that each role carries its own obligations and responsibilities, which the shrewd intermediary must be aware of and adhere to.

Sometimes a role initially performed by an intermediary ends up "contaminating" with other roles, and this circumstance, if not properly handled, can lead to problems from a legal and/or ethical standpoint

The two figures most exposed to this kind of risk are:

- the art advisor

is the figure who plays only an advisory role, assisting one of the contractual parties from the point of view of art history (expertise is a typical example), market trends, with regard to issues of conservation or restoration (cf. Condiction report), transportation and shipping issues, including customs practices, and, last but not least, from a legal point of view (our clients know something about this).

- the agent

is one who acts in the name and on behalf of his client in order to conclude a transaction. Often the agent also acts as a fiduciary, not disclosing to the other party the name of the person for whom he or she is acting, in order to ensure confidentiality, which in the art business is undoubtedly an important value.

In order to properly determine one's role and the obligations involved, RAM asks the intermediary a few questions:

1) who is your client?

It is necessary for the intermediary to reflect on who is the one for whom he or she is acting or from whom he or she has actually received the assignment, whether there are other parties involved, and what the relationship between them is, in order to avoid conflicts of interest or position

2) Are you acting only as a consultant or also as an agent?

In particular, it is important for the intermediary to realize whether he or she has the power to dispose of all or part of his or her client's rights, e.g., by engaging him or her in a trade, bargaining over aspects such as prices, warranties, etc., up to and including whether he or she has the power to conclude the transaction.

3) Are you the only intermediary involved in the negotiation?

This is important, especially with regard to what pertains to the category of broker.

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Obligations vary depending on the role held but also in view of the national norms under whose auspices the negotiation takes place. It is important, therefore, to clarify this in the first place, because many differences in regulations and behavior cascade from it.

One thinks of anti-money laundering, tax or export regulations, which vary from one nation to another, with relevant effects on what the roles of the intermediary may be and under what conditions certain functions may be performed.

However, beyond national regulations, it is important that the intermediary, especially if bound fiducially to one of the contracting parties, comply with the following obligations:

- avoid unreported profits to the client

the client must be made aware in advance of who will pay commissions to the intermediary and how these will be calculated; it is important that any discounts or reductions, especially if they benefit the counterparty, are also communicated to the client

- clarify the existence of any mediation committees

the client must always be informed regarding any brokerage fees to be paid as a result of the counterparty contract presentation activity alone

- Maintain the confidentiality of the information acquired and avoid its use for personal purposes

for example, violates this rule if an intermediary, after providing advice on behalf of a client, uses the data collected to procure potential buyers in exchange for a brokerage commission without the client's knowledge

- act in the best interests of the client

it would seem almost unnecessary to reiterate, but do you really think that violation of such a behavioral norm is a residual exception?

- act with care and skill

The art market is far from simple in its dynamics and, at times, erroneous behavior can cause serious damage not only to the negotiation in progress, but also to potential and future ones, for example by causing a depreciation of the work (think of behaviors that can engender the affixing of administrative constraints).

For this reason, it is important for the intermediary to act within the scope of his or her abilities, delegating to other consultants those activities that fall outside the scope of his or her authority, and keeping the client constantly informed about the mode of action and the purposes and expected results.

- operate good reporting to the customer

- take care of the client's property in packing, transportation, and storage operations

Choosing the professional dealer to whom to entrust the work of art is an activity to be done wisely, and good insurance coverage is never inappropriate.

It should always be kept in mind that the intermediary is required to exercise a degree of diligence that sometimes exceeds what is expected of the owner, especially when dealing with consumers.

In addition to the obligations related to the fiduciary relationship, each intermediary must pay special attention to compliance with regulations related to the following aspects

- national and international money laundering regulations

- tax discipline

- Follow-up law discipline (where applicable)

Conducting the assignment without taking these aspects into account, or failing to deal with them properly, may result in even very significant damage to the client and the intermediary.


Whatever the method by which the broker's fee will be determined, it is exceedingly advisable that the client be informed in advance and that this also be done in writing (preferably by signing an actual agreement).

It will also be appropriate to specify whether the fee is to be understood as including any costs or whether these are to be paid separately.

It should also be borne in mind that, even in the absence of an express prohibition, it is extremely inadvisable to link the fee of a consultant (e.g., the one who has given an attributive opinion) to the sale price; this is in order to avoid possible conflicts of interest, the implications of which in the long run are absolutely unpredictable.

Again, RAM advises the intermediary to ask himself the following questions:

1) who is paying your fee? Will it be paid by the client or by a third party?

2) How will the fee be calculated? Are expenses included or separate?

3) Have you clarified with the client the method of payment? Did you do this before the deal was concluded?

4) Is the client aware of the total amount of fees you will receive if the deal goes through?

5) How will you be paid? Are you authorized to deduct your fee from the amount paid in settlement of the transaction?


There is a conflict of interest, even if only potential, where the intermediary is in a position to gain a personal advantage by acting in the name and on behalf of the client or even only by carrying out his advisory activity for the client.

Particularly delicate is the position assumed by the mediator who, in a position of theoretical equidistance between the parties, often ends up letting the interest of one prevail to the detriment of that of the other; for this reason, the RAM toolkit sees this figure as particularly prone to problems and advises against those who carry out this task taking on fiduciary duties.

The following questions will help the intermediary better assess the concreteness of any conflict of interest that may exist:

1) Are you acting, in the same transaction, for two parties who do not have the same interests?

2) Are you playing different roles in the same transaction? (e.g., the role of agent and the role of art consultant)

Further instances of conflict of interest arise in the presence of opaque clauses on the arising of the right to compensation and its determination.

Transparency is, therefore, to be considered an extremely important value, especially when related to activities of a fiduciary nature; to avoid running into problems, the intermediary must:

(a) operate a complete information activity towards the client

(b) follow up on actions to be taken only following his or her informed consent

Before accepting an assignment, the consultant should clarify:

(a) clarify on whose behalf he/she is actually acting

(b) identifies who his or her contractual counterpart actually is (whether he or she is the owner of the right, e.g., the seller or buyer, or his or her agent)

(c) avoids stipulating fees that may create potential conflicts of interest with its client or that is not rendered in a fully transparent form (e.g., it is not appropriate to stipulate that payment is made by the counterparty if its client is not fully informed and has not given express consent).


RAM advises intermediaries to establish written agreements with their clients in accordance with the regulations of the states in which they are going to operate.

In this regard, I must reiterate the importance of drafting such agreements with special attention to anti-money laundering regulations.

Finally, RAM recommends including one or more clauses aimed at settling any disputes between intermediary and client; I would like to point out that, in the art market, these clauses are particularly important, since state judges rarely have in-depth knowledge of the dynamics of the sector.

For example, I recently happened to read a ruling rendered by an Italian judge who, blatantly ignoring the most basic mechanism of how an auction works, equated auction houses with those companies (such as, for example, telephone companies) that guarantee a service to anyone who offers them the asking price.

On the contrary, there are arbitration chambers, or those offering mediation services, with specific reference to the art market, with staff with specific training in the field, capable of providing a professionally adequate dispute resolution service.

In Italy, art arbitration service is offered by the Venice Arbitration Chamber, while the Milan Arbitration Chamber (CAM) offers mediation service, both in accordance with Italian provisions and international mediation rules.

The same services are also offered by the Court of Arbitration for Art (CAfA), based in The Hague.

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