Art experts’ determination is not covered by litigation privilege, says High Court

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The seller of an Old Master painting was entitled to inspect letters between Sotheby’s, one of the world’s largest art auction house, and two art experts regarding the authenticity of the painting as those were not covered by litigation privilege.

The case of Sotheby’s Mark Weiss Ltd [2018] EWHC 3179 (Comm) concerned the defendants who acquired the painting which was later sold to a private buyer by Sotheby’s. The buyer provided evidence raining doubts about the painting’s authenticity, and Sotheby’s instructed experts in support of their decision to rescind the sale and return the purchase price to the buyer.

In the present case, Sotheby’s were seeking rescinding of their contract with the defendants and repayment of the purchase price that they had to return to the buyer. In course of the proceedings, the defendants sought inspection of the communications between experts and Sotheby’s who refused to disclose on the grounds on litigation privilege.

In English law, there are certain principles governing the ability of a party to keep communications in respect of their litigation matter confidential. One of these principles is litigation privilege which allows a person to prepare for litigation without being concerned about whether it will be necessary to disclose any of the documents for litigation. The rule is that litigation privilege arises only when litigation has commenced or is in a reasonable prospect. The purpose of the communications between a party and its lawyer or, indeed, a third party must be so to conduct litigation.

In Sotheby’s Mark Weiss Ltd the High Court ruled that the auction house could not withhold inspection on the grounds of litigation privilege as it was not able to show that the dominant purpose of the correspondence with the art experts was its use in the litigation.

It was found that the letters were written for two purposes: to establish whether the painting was authentic, and to rescind of contract if it were found to be fake, and to use in the litigation contemplated between Sotheby’s and the seller. However, Teare J was of an opinion that both purposes were “of equal importance and relevance”, and that Sotheby’s was not able to establish that the second purpose was dominant of the two purposes.

Teare J also noted that although the litigation “was likely, perhaps inevitable” after Sotheby’s determination that the painting was a counterfeit and deciding to rescind the contract, the two purposes could not be treated as one dominant purpose for the correspondence to be covered by litigation privilege.

Sources: Litigation Futures, https://www.litigationfutures.com/news/letters-to-art-experts-not-covered-by-litigation-privilege

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