Fear of Litigation Adversely Affecting the Fine Art Market

In the fine art market, plenty of art experts have been timid to authenticate artwork in fear of possibly being litigated. Art scholars are scared that if they authenticate a piece of art that turns out to be the product of forgers, the authenticator could be held liable and get sued for millions of dollars. Many art institutes have entirely eliminated their art authentication division to avoid jeopardizing the health and well-being of their foundation or organization as a whole.

As a result, the price for pieces of art that have been authenticated by an art authentication board fetches an exponentially greater price than unauthenticated ones, since it increasingly has become a rarity. These authenticated pieces of art’s purchase price are thus greatly inflated and the ones that are indeed genuine but not authenticated, for whatever reason, have cost the owners up to millions of potential profit.

I consider this article to be an excellent example of why a fundamental understanding of the law and its impact on the business environment is essential for business students. Alluding to the fine art market, the article demonstrates why it is essential for business models to take into account legal concerns in implementing a strategy or operation.

http://economist.com/news/business/21567074-fear-litigation-hobbling-art-market-collectors-artists-and-lawyers