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Banksy’s shredded masterpiece – who bears the loss?

Arabella Murphy, private wealth director at law firm Maurice Turnor Gardner discusses Banksy's infamous girl with a red balloon 'disaster' and asks - who picks up the bill when priceless art is damaged beyond repair?

Bang!  The hammer fell at Sotheby’s on the £1 million sale of an iconic image – Banksy’s sketch of a girl with a red balloon.

Whirr! The picture immediately slipped through a shredder hidden in the frame, and was destroyed forever.  Photos record the aghast faces of those in the room.  The reaction of the successful bidder, on the phone, is unknown.

Conspiracy theories abound – didn’t the auction house spot the shredder?  Is the very fact that it would self-destruct a work of art?  Was the buyer complicit?  Was it destroyed, or just curled up inside while other shreds emerged from the frame?  Has the publicity doubled its value?

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All that aside, damage to works of art does happen, though luckily rarely, and the question is then who bears the loss.  If it’s in your own home (even just before an intended sale), the loss is clearly yours, as US billionaire Steve Wynn discovered when he accidentally elbowed a Picasso before it could be consigned for sale.

If it’s in a public place, such as a museum, the accident is normally at the cost of the museum (insured or not) – such as when a visitor to Cambridge’s Fitzwilliam Museum tripped and smashed some priceless Chinese vases.  And in museums and galleries, stories abound of hapless cleaners making unmade beds, or sweeping away piles of ‘junk’, with painfully expensive consequences for the exhibition space.

There are rare cases of deliberate damage, such as the slashes inflicted on Repin’s famous painting of Ivan the Terrible at Moscow’s Tretyakov gallery this year (its second such attack in a century). As the eyes of the painting’s subject are so vivid that they are said to drive people mad, the perpetrator may have had a unique defence to criminal charges, but would remain liable for damages in a civil case.

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What if a painting or other priceless object is in transit, or stored elsewhere?  Any work of art is treated with respect and white gloves by the auction house, dealer, or specialist warehouse, but accidents can occur.  Some years ago, auction house porters put an empty box in the crushing machine, only later to learn that it contained a Lucien Freud.  And earlier this year, the unfortunate Mr Wynn suffered another Picasso-related mishap when a painting was damaged at an auction house awaiting sale.  In such cases, the auction house is generally responsible for making good the damage, and any loss to the owner.

Sometimes, there are subtle questions about who owns it at the time of an accident.  After the hammer falls, title and risk in the artwork usually passes to the bidder.  If it’s damaged at the gallery or auction house, then you’d expect them to foot the bill, but in some cases you may need to look to your own insurance.  This was the message first given to some clients who we recently assisted in securing compensation for the loss of a contemporary artwork destroyed in a fire before it could be delivered to them.  Owing to the unique nature of the work of art, title and risk could not pass until it was assembled in their home; until then, the risk remained with the dealer. It seems doubtful that Sotheby’s would be liable for a self-shredding Banksy, however.

Main Picture: @Max Pixel