Implications of Brexit for the Law Affecting Cultural Heritage: Geoffrey Bennett, Institute of Art and Law, United Kingdom,
Frustration and beyond
Whatever you think about Brexit, uncertainty and frustration are common feelings. When Geoffrey agreed to do this talk he didn’t think we would be in the position we are in. It is still hard to know what will happen, nothing has been settled except the tone – that of a soft Brexit. Lawyers would call it an agreement to agree, which is not an agreement at all. This is a sign that the parties are still negotiating. It might be two years yet before we will really know what is what. This is the problem that much of law is about: providing certainty in an uncertain world.
The current situation – an agreement to agree
Article 167 of the Lisbon Treaty states that ‘the Union shall contribute to the flowering of the cultures of the Member States…bringing the common cultural heritage to the fore.’ It shall be aimed at supporting, amongst other things, ‘non-commercial cultural exchanges’. It is an EU objective that cultural mobility is facilitated and EU law that there is freedom of movement of goods and people. There is also the Network of European Museum Organisations, NEMO
, which has a useful standard loan agreement template.
There are a number of income streams from the EU that support a variety of initiatives such as ‘Creative Europe’
which the UK has benefitted from. Liverpool for example received 10 million pounds from the EU Regional Development Fund, which unlocked more money through the multiplier effect.
Post Brexit, the UK will be ‘beyond’ the EU, joining countries such as Iceland, Norway, Bosnia and the Ukraine. What impact will this have? The UKRG’s EU exit impact statement is a good document to see the list of areas that could be affected. Many questions are raised, such as:
- Will the spirit of loans be affected?
- Will existing long-term loans be affected by import and export changes?
- How long will the law be in limbo? Will this affect planning?
- Will costs increase?
- Will the UK be a less attractive partner?
- How will VAT, staff and transport be affected?
What can we do?
We can be weary of gaps in our contracts. There is a danger that one invalid clause invalidates the whole contract, so we need to guard against that.
Examples from case law
Taylor v Caldwell (1863) – this was about hire of a music hall that was destroyed by fire, which was not the fault of either party. The hirers sued and lost. If an event renders a contract impossible/illegal the legal doctrine of frustration applies.
A casino magnate bought Picasso’s ‘Le Reve’ for 48 million dollars and had a contract to sell the painting to a hedge fund manager. The magnate accidentally poked a hole in the painting with his elbow. The legal question was had the contract been frustrated? The answer is unclear but in case law something has to be dire to bring about ‘frustration’.
Amalgamated Investment v John Walker (1977): John Walker advertised a whisky warehouse for sale. The building became a listed building, decreasing development potential. Amalgamated Investment argued for frustration of contract but this was dismissed by the court who said that the contract had not been frustrated.
If a loan contract stated that only the lender’s curator could handle a painting and a volcano stopped that curator’s travel, this could be frustration but if the exhibition had 30-40 works, the loss of 1 would probably not be frustration. If things happen unexpectedly there isn’t an automatic legal remedy and Brexit itself is not going to be a surprise. The new arrangement probably won’t make things illegal, just expensive and irksome and we need to prepare for it in our contracts. In this perhaps unprecedented period of legal uncertainty it is more important than ever to consider provisions for things not going as smoothly as in the past.
- Avoid frustration by including a force majeure clause so that the contract says what will happen.
- If loans have to be cancelled, agree what would happen about costs in advance.
- Consider making a provision in the contract to limit the effect of currency fluctuation.
- Include arbitration clauses
Positives to remember!
- For the UK it shouldn’t be worse than dealing with a non EU country such as the USA.
- There is a large amount of trust and good will in the sector
- There is a common professional language
- Joint working such as the acquisition of two Rembrandts by the Louvre and Rijksmuseum shows that we can work together.
Written by Katie Robson, Registrar, Royal Armouries