Trust Accounts for the Galleries

EXTRACTS OF TOM LOWENSTEIN’S RECENT SUBMISSION TO THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION (ACCC) AND THE VICTORIAN MINISTER FOR THE ARTS REGARDING TRUST ACCOUNTS FOR THE GALLERIES

In the early 1990s, the art market was quite depressed, and sales dropped dramatically, with the result that some galleries had to close their doors, owing artists substantial monies. There is a general concern that with the current downturn of the economy, there is a danger of the repeat closure of commercial galleries. In many cases artists will be the ones who will suffer most.

Furthermore, we are constantly aware of certain galleries (and let me stress that these cases are exceptional) who do not pay their artists promptly; in a few cases, legal action had to be taken to recoup the sales proceeds.

There is no legal, moral, or financial justification for galleries using artists’ monies, without the artist’s consent, as their working capital.

The only way in which to ensure that the present gallery system is not used to the disadvantage of artists, is for galleries to operate Trust Accounts for their artists, similar to Solicitors and Estate Agents Trust Accounts.

It is my recommendation that Legislation should be introduced, whereby when a Gallery receives payment for sale of an artist’s work, the proceeds will be placed into a Trust Account and payments then made from the Trust Account for the artist’s share of the sale, and to the Gallery for their commission.

A number of commercial galleries and the Australian Commercial Galleries Association have opposed this concept, and it is unlikely that the ACGA will self-regulate and set up Trust accounts without some form of Government intervention.

Read the full submission on www.lowensteinsarts.com.au