The UK Intellectual Property Office (UK-IPO) has published a report into the impact on the UK art market of the Artist’s Resale Right (“ARR”), which was introduced in 2006.

The ARR applies to works by living artists where that work is sold on the commercial art market. It entitles them to a royalty on sales of their works for €1,000 or more, calculated on a sliding scale. The maximum royalty payable is €12,500. According to the report approximately £1.5 million per annum is paid to British artists under this right.

At the time of introduction of the ARR, which was the result of a European Directive seeking to harmonise laws in the EU, there had been concerns that it would have an adverse impact on the UK art industry. The report suggests that the ARR has not in fact had a significant impact but points to some difficulties with the operation of the system, such as identifying the nationality of artists, which is important bearing in mind that not all nationalities benefit from the ARR.

Although the ARR currently only applies to living artists, the legislation originally envisaged that from 2010 it would apply to any work which remained in copyright (ie works created by artists who have been dead for 70 years or less). UK-IPO launched a consultation that looks at the possibility of excluding dead artists until 2012. This extension would require a change to the existing legislation and would also necessitate the UK Government persuading the European Commission that the extension was necessary to enable the “economic operators” in the UK “to adapt gradually to the resale right system while maintaining their economic viability”.

The report indicates that the extension of the ARR to dead artists in 2012 would, on current figures, increase the size of ARR payments fourfold, and art market professionals have reiterated their concerns that the result is likely to be the diversion of trade elsewhere. Whether this sentiment and the results of the consultation will be enough to persuade the UK Government to seek to postpone the introduction of ARR for dead artists remains to be seen.