The Artist's Resale Rights Regulations 2006 (ARR) introduced a new regime in the UK in relation to the royalties awarded to artists on a resale of their work. These regulations entitle the creator of a work of art to a "resale right", which allows an artist to receive a royalty each time his work of art is sold by a third party. This means that an artist receives not only the proceeds of sale from the first sale of his work, but continues to receive money on each subsequent resale.

This new regime generally brought the UK into line with the way artists' resale rights are treated by its European counterparts. However, the UK Government chose to opt out of fully implementing the European Directive that gave rise to the ARR (Directive 2001/84/EC), and at present the resale applies only to living artists and will not apply to dead artists until 2010 at the earliest.

The UK Intellectual Property Office (UK-IPO) recently held a consultation seeking views on whether to maintain the opt-out for a further 2 years until 2012, or to allow it to lapse, extending the resale right to dead artists. The resale right only applies to works that are still in copyright, which lasts for the duration of the artist's life, plus 70 years.

Under the ARR, the artist will have a right to a resale royalty for each sale subsequent to the first transfer of the work when the following conditions are met:

  • the buyer or seller is "acting in the dealing in works of art"; and
  • the sale price is over 1,000 Euros.  

The royalty is collected on behalf of artists by a collecting society. The Design and Artists Copyright Society (DACS) is the main one in the UK. The amount of royalty payable is worked out on a sliding scale, although the maximum royalty payable is capped at 12,500 Euros.

The artist's right to a royalty is a touchy subject in the art world, and has long caused a division between artists and the auction houses and dealers. The UK art trade has argued vociferously against this right stating that such practices will cause untold damage to the lucrative UK market. An extension of the resale right to the works of dead artists serves only to lengthen this feud.

Art dealers are concerned that this right will drive the art market away from the UK and the EU to countries such as the USA and Switzerland where there are no equivalent rules. However, artists argue that application of the resale right to deceased artists would bring the artists' rights into line with owners of other types of copyright such as writers and musicians.

The UK-IPO is currently reviewing the responses to its consultation, although it remains for the UK Government to decide whether to extend the opt-out, as it must make its case to the European Commission by the end of this year if it wishes to do so.