The Resale Right Directive

Droit de suite

The right of a visual artist to be remunerated each time an original work is sold to a new owner originates from France in the 1920s. The droit de suite was subsequently adopted in other European civil law jurisdictions. However, as with copyright, common law countries have been reluctant to follow their approach. There has been particular resistance in the United Kingdom and the United States, two of the largest markets for modern and contemporary works of art. 

Two enduring arguments represent the different positions. On one side, it is argued that the true value of a work of art is often unrecognised at the time of its first sale. A resale right is therefore needed as a means of redress and to protect artists from opportunistic dealers or speculative investors. Conversely it is argued that the right actually disadvantages more artists than it favours. Some economists have suggested that it lowers the initial sale price by forcing the pros­pective buyer to factor in the future cost of selling.   

The Resale Right Directive 2001 applies to works made entirely by the artist or copies considered to be original works (such as limited productions or signed works). It aims firstly to ensure that “authors of graphic and plastic works of art” share in the economic success of their works and secondly to harmonise this right across the EU.

The resale right is usually payable by the seller; however Member States (MS) can also designate another art-market professional to be solely responsible or to share the responsibility. MS must also set a sale price (minimum of €3 000) as of which the resale right will apply. However they may also determine that the right does not apply to a resale within three years of purchase and where the resale price is below €10 000. The term of protection mirrors that for copyright within the EU, enduring 70 years after the artist’s death.

In 2001, four of the then 15 MS did not apply the resale right in national law: Austria, Ireland, the Netherlands and the UK. Whilst they had to imple­ment the right for works by living artists by 2006, they made use of a transitional period until 1 January 2012 in which they did not have to apply the right to works by eligible deceased artists. The Directive is now being fully applied in all MS.

Following a public consultation carried out at the start of 2011, the Commission published a report on the implementation and effect of the Directive at the end of last year. In particular the report examines the effect of the right on the internal market and on those MS that did not immediately apply the right.

The report notes a reduction from 2008-2010 in the EU’s market share in auction sales of works by living artists and by artists deceased within 70 years of sale. This was largely due to reduced UK figures. These were off set by small increases in some MS that already had the resale right (e.g. France) and in some that had only implemented it in 2006. However given the changes in the contemporary and overall art markets, the report could establish no clear link between the loss of EU market share and the introduction of a resale right. Similarly, there was no clear evidence of trade being diverted away from those MS which had promptly implemented the right.

One significant difference however was in the administration of the right. The report found that in some MS, a significant burden was placed on art-market professionals which in turn could lead to reductions in the royalties granted to artists. To this end, the Commission recommended an exchange of best practice at EU level to manage and minimise these costs. A stakeholder dialogue would be established in this respect. A further report will be delivered in 2014.