‘Deaccessioning Art & Cultural Heritage – The Legal & Ethical Framework.’

I have started drafting my essay for the Diploma in Art Law Course at the Institute of Art & Law in London about the duties (including fiduciary duties) and powers of Museum & Gallery Trustees in relation to deaccessioning. The working draft is set out on the ‘Mediation of Art & Cultural heritage Disputes’ page at www.carlislam.co.uk. This is an ongoing work in progress. In the introduction I explain,

Deaccessioning of art/cultural heritage occurs when a museum decides to dispose of a work of art/cultural heritage. Whether a non-statutory museum which is a charity has the power to deaccession is governed first by its constitution, which may or may not provide an express power. In the absence of a power, the necessary power may be obtained. However, any such power:
(i) can only be exercised in furtherance of the objects of the charity; and
(ii) in exercising the power, and subject to limited exceptions, the trustees must perform their duties (including fiduciary duties requiring them to obtain the ‘best price’). In this essay I will discuss the legal mechanisms for deaccessioning by a non-statutory museum. …

In England, where a museum is found to have disposed of an object from its collection by sale, exchange, donation or transfer by any means to any person in consequence of financial and economic pressures and inadequate capital and revenue funding, it may be censured by Arts Council England and stripped of its accreditation. That in turn, renders the institution ineligible for various sources of public grant and a low priority for other public schemes. …

A museum or gallery cannot voluntarily dispose of its property, however compelling the moral demand, unless the disposal is lawful. …

As a general rule, trustees would be ill-advised to return a work of art unless they were able to look to the Attorney-General , the Court, or the Charity Commissioners, for approval. Trustees of a Charity must carry out the trust in accordance with the terms of the trust instrument. In the context of repatriation, the critical question is whether the trustees have the power, i.e. a lawful right, to make a disposition of trust property. Furthermore, in the exercise of a power conferred on trustees to enable them to discharge their duties, they must exercise the power for the purpose for which it was given, i.e. to further the purposes of the trust. In the exercise of a discretionary power trustees must act honestly and upon a fair consideration of the matter.’

The essay will also discuss the provisions of the Charities Act 2022,  and whether a National Museum, e.g. the British Museum and Louvre, owe a wider duty under IHL, to strive to be better ‘collaborative custodians’ of world heritage. 

When does an interest in possession granted under a will arise?’

When does an interest in possession [‘IP’] granted under the terms of a will arise?’ – In Hall and ors v. HMRC [10.01.2023] [TC 08691], Judge Allatt held that at the date of the testator’s [‘T’s] death the beneficiary of the IP ‘did not have’ an IP. The Judge correctly concluded that the trustees ‘may possibly not have been under a duty to sell’ property [‘P’], in which, the deceased testator [‘T’] had conferred an interest in possession [‘IP’] on [‘B’]. The Trustees were not, because:

(i)               ‘Executors are statutory trustees of land, s.1(i)(a) Trusts Of Land And Appointment of Trustees Act 1996. [NB] Where Box 10 of a HM Land Registry form TR.1 declares that executors ‘hold the property on trust’, they hold the property on an express trust of land, i.e. as trustees.

(ii)             The duties of executors, trustees, and trustees of land [‘Trustees’] are the same in relation to land, see Byrnes v Kendle [2011] HCA 26, (2011) 243 CLR 253, at paragraphs 67 and 119, which was cited in Brudenell-Bruce v. Moore [2014] EWHC 3679(Ch), by Mr Justice Newey at 88.’ [extracted from my article ‘Electing between equitable remedies’ published in ‘Trusts & Trustees’ by Oxford University Press, December 2021 – available to view on the ‘Publications’ page at www.carlislam.co.uk].

(iii)           ‘An executor is not under a duty (i.e. any legal compulsion) to sell land, because s.2 of the Trusts Of Land And Appointment of Trustees Act 1996 states:

‘Abolition of doctrine of conversion.

1. Where land is held by trustees subject to a trust for sale, the land is not to be regarded as personal property; and where personal property is subject to a trust for sale in order that the trustees may acquire land, the personal property is not to be regarded as land.

2. Subsection (1) does not apply to a trust created by a will if the testator died before the commencement of this Act.

3. Subject to that, subsection (1) applies to a trust whether it is created, or arises, before or after that commencement …’ [See my article above].

 (iv)           S.34 and the First Schedule to the Administration of Estates Act 1925 neither: (a) specify the way property could or should be applied to discharge debt,  nor (b) state that property ‘must’ be sold (which is the ‘litmus test’ of a duty imposed on Trustees – i.e. imperative wording).

 The Judge correctly observed that under s.6(5) of TLATA 1996‘trustees of land’ are under a duty to ‘consult’ beneficiaries, and to obtain their consent to the sale of land – see Lewin on Trusts 20th Ed, Vol 2 para 37-055).

Was the Judge wrong to conclude that at the date of T’s death B did not acquire an IP in P?


(i)           An IP conferred upon a person [‘B’] under the terms of a will is an equitable ‘right’ (Pearson v. IRC [1981]). ‘Interest in possession’ is a concept of general law. There is a statutory definition in Scotland (IHTM16071), but not in England and Wales or Northern Ireland. It is defined in IHTM16062 [Interests in possession: definition of an interest in possession], as an ‘immediate right to the income or enjoyment of property (irrespective of whether the property produces income’.  

(ii)         The will does not confer an interest on B in unadministered estate property. It confers a right exercisable in relation to estate/trust property, whether administered or not, from the moment that P becomes estate/trust property.

(iii)       ‘Where an executor is appointed by a will, he derives title from the will, and the property of the deceased vests in him from the moment of the testator’s [T’s] death, so that probate is said to have relation back to the time of [T’s] death. Thus, while an executor cannot rely on his title in any court without producing the grant of probate, that grant is merely the authenticated evidence of his title. … Because an executor’s title is derived from the will he may, before he proves the will, do almost all the acts which are an incident of his office, except some which relate to litigation.’ (Tristram & Cootes, para 5-04). 

(iv)           Therefore, following T’s death, title to P vested in the Trustees, subject to: (a) the ‘right’, i.e. ‘IP’ in favour of B conferred by T’s will; and (ii) the exercise by the Trustees of their ‘duties’ in accordance with their ‘powers’.

(v)            An unencumbered sale of P by the Trustees would have extinguished the ‘right’/’IP’, e.g. if Trustees had sold P to fund the payment of IHT.

(vi)           A logical corollary of that proposition, which is the converse, is that where P was not sold following occupation of P by B after T’s death, that the ‘present right to present enjoyment’ of  P conferred on B by T under the terms of her will, subsisted, i.e that the ‘IP’ subsisted.

(vii)         Therefore, B could not have been a ‘gratuitous licensee’ as a result of a decision made by the Trustees to not sell P.

Because of the far-reaching tax implications of this decision, I wonder if HMRC will appeal?

Mediating the Repatriation of Art & Cultural Heritage

Issues for the Mediator to discuss during a Pre-Mediation Zoom Call about preparatory steps & agreeing ‘criteria’ i.e. applicable ‘Principles of Repatriation.’ – I am devloping a table of Mediator Tools which is set out in my essay ‘Mediating Art & Cultural Heritage Disputes’ on the ‘Mediation of Art & Cultural Heritage Disputes’ page at www.carlislam.co.uk. What follows is an extract. 
1.    Inventory – Has a list and index been made of the artefacts [‘A‘] which an institution e.g. a museum [‘M’] is holding that are being claimed?
2.    When and how were the artefacts acquired? – i.e. how did they get there.
3.    Why is M holding A – i.e. what is A doing in the possession of M? e.g. is A even on display, in what context (e.g. in a cabinet of ‘curiosities’ / ‘spoils of war’), and for what purpose?
4.   What connection does the Claimant [‘C’] have to ‘A’ e.g. ancestral lineage i.e. because A is part of C’s living culture.
5.   Why is possession of A of importance to C? e.g. to keep their culture alive, because they can only record and transmit the sacred and artistic/artisan knowledge manifested in A by visiting M – which may not be accessible.
6.   How important is A to C? e.g. because A is part of C’s identity/genetic ‘cultural’ blueprint, and therefore A is of unique significance to C.
7.   What is the cultural home of A? [‘H’] – which is linked to the concepts of:
7.1  a ‘Lex Originis’;
7.2  the ‘legitimacy’ of a place where A should be located (‘Patrie’ – i.e. the cultural ‘homeland’ of A);
7.3  the sovereignty of indigenous peoples and their human rights; and
7.4  the concept for public display of  a ‘unity of art.’
8.   What is the applicable legal framework.
9.   What Code(s) of Ethics and Museum Guidance apply to M.
10. Is M under a wider moral and possibly ‘fiduciary duty’ under International Humanitarian Law, to strive to be a better ‘collaborative custodian’ of objects of cultural importance to an indigenous people?
11. Is M’s freedom to return A to C contrained by a legal prohibition against alienability?
12. Are there exceptions? – This is connected to the negotiation of an agreement to enter into arrangements which de facto return A to C, e.g. an indefinite loan of C to A.
13. What are M’s counter-arguments?
14. What larger ‘relationship’ issues are in play?
15. What repatriation precedents illustrate how a creative deal can lawfully be done to settle a moral claim, e.g.
15.1 The Constitution of Australia.
15.2 The Derynaflan Treasures.
15.3 The Hebrew Manuscripts in the Vatican Archives.
15.4 The Lakota Ghost Dance Shirt.
15.5 The Lewis Chess Pieces.
15.6 The Lindisfarne Gospels.
15.7 The Stone of Scone.
15.8 The determinations made by the UK Spoliations Committee about looted art during the Holocaust.
15.9 The Treaty of Tolentino – The fruits of war: how Napoleon’s looted art found its way home (theartnewspaper.com)
Legacy of Napoleon‘s artistic plunder on show in Rome (koreaherald.com)

‘Mediating Cultural Heritage Disputes’

This morning I wrote the opening paragraph to my essay entitled ‘Mediating Cultural Heritage Disputes’, which is a work in progress that I am writing on the ‘Mediation of Art & Cultural Heritage Disputes’ page at www.carlislam.co.uk.

In a dispute about the repatriation and relocation of cultural, historical and sacred material (a ‘Cultural Heritage Dispute’), the P’s assert a moral case and make ethical i.e. value-driven choices which are not about money.  There is also a wider ‘relationship’ dimension in a repatriation dialogue, becuase ‘larger’ issues at play, e.g. righting a historical wrong which took place during colonial times. Mediation may therfore also be an opportunity to transform an acrimonious and long-standing political dispute into a constructive joint-problem solving exercise, by applying ‘fiduciary principles of international relations’ (see my essay a ‘Fiduciary Theory of Art’) to advance the foreign policy agenda and imperatives of each P through a process of Cultural Heritage Diplomacy.

In my experience, there is nearly always a deal to be done. First, however, the P‘s need to find common ground. Then a conversation can begin through a Mediator who has sufficient knowledge of:

(i)  ‘Art and Cultural Heritage Law’; and

(ii)  the wider cultural, social, political, and international relations issues, which underly and are driving the dispute.

However, whereas the mediation of a commercial art dispute may be concluded in the course of a series of one day mediation meetings in person or by Zoom/TEAMS, the process of conducting a repatriation dialogue is more protracted, and may involve a series of meetings and conversations that take place behind closed doors over a period of years. There is rarely a quick fix in the mediation of a moral claim about possession of cultural property. The challenge  for the P‘s is to develop a relationship which enables a deal to be done within the constraints that apply. That takes time, patience and sustained effort.

In this essay I will discuss: (i) the challenges facing Mediators in steering the participants toward resolution in a‘Cultural Heritage’ dispute; (ii) the necessary ‘qualities’ of the Mediator; and (iii) ‘tools’ for overcoming and reconciling: conflicting perspectives; agendas; and imperatives, in order to facilitate a lawful, practical, and sustainable solution to the multi-faceted underlying problem which lies at the heart of a moral claim for the repatriation and relocation of cultural, historical and sacred material.’

Mediation of Tax Disputes – Part 2

Part 2 of my article about the Mediation of Tax Disputes was published today online and in print by Taxation (Tolley). https://lnkd.in/eeP3-vCY

For subscribers to Taxation the link to the article is: Off to mediation with HMRC | Taxation
There are also links on the ‘Publications’ page to my other related and recently published articles:
– ‘Follow the Yellow Brick Road – Off to Mediation with HMRC – Part 1’. 
– ‘Mediating Probate and Trust Disputes – Process Challenges and Tools – Part 1.’ Published online by Oxford University Press in Trusts & Trustees 14.11.2022 which will be published in hardcopy in the Journal in February 2022.].
– ‘Back to the future’ – Part 2 – Mediation and Estate/Business Succession Planning. Taxation (Tolley) 08.03.2022.
– ‘Back to the future’ – Part 1 – Mediation and the tax-efficient settlement of probate disputes. Taxation (Tolley) 01.03.2022.
The ‘Tax Gap’ i.e the amount of uncollected tax = £36 Billion.
The hole in public finances = £40-50 Billion.
£36 Billion = 90% of £40 Billion.
Therefore, the amount of uncollected tax a proportion of which can be settled and collected through Mediation of tax disputes, represents 90% of the hole (at its narrowest) in the public finances. See Uncollected tax which can be settled through Mediation = 90% of the hole in public finances | Carl’s Wealth Planning Blog
As I discuss in Part 1 of the article:
·        Tax mediation Works.
·        Mediation is available in almost any kind of tax dispute, and HMRC are keen to encourage tax-payers to enter into the process.
·        However, the total number of tax disputes that entered into mediation in 2021/2022 was about 1000, which is a tiny fraction of the total number of tax disputes that remain unresolved and would benefit from ADR, thereby also saving FTT resources funded by all taxpayers.
In Part 2, I conclude:
·        Success in HMRC ADR depends upon HMRC and the TP [Taxpayer] acting reciprocally in good faith – which is a two-way street.
·        The HMRC Mediator will treat the TP’s ‘negotiating position’ as ‘private’ unless and until the TP is prepared to share it with the HMRC case team.
·        In order to develop creative and bespoke ‘pre-mediation strategies’, the P’s need to think commercially, and put a ‘price’ on settlement versus proceeding to trial.
·        At some point in the Mediation Day, the Mediator has to say to both the TP and HMRC – ‘Is there any benefit to you in settling today? If there is put a value on it. Combine that with pricing up the risk of doing better or worse at a hearing and that gives you the exit price.’
·        Thus, calculation of the ‘exit price’ by each P ahead of the Mediation Day, is the ‘golden key’ to success in the Mediation of a tax dispute.

What can Government and Mediation organisations do to: (i) unchain Mediation in tax disputes; (ii) educate; and (iii) encourage the use of Mediation by TP’s – thereby ednabling the ‘Tax Gap’ to be reduced?

In other words, ‘What systemic, i.e. institutional, policy and management changes, need to be made to enhance the collection of unpaid tax through Mediation by encouraging TP’s to enter into the process? When researching Part 3, the author will discuss these issues with constituents in each participant community. Meanwhile to catalyse debate and test the institutional resilience of the ‘system’, the author poses the following two questions. If readers would like to comment either on an ‘attributable’ or ‘non-attributable’ basis about any of the issues discussed in these articles, they are invited to write to the author at carl@ihtbar.com:

  • While the contents of the Record (which is not a minute of meeting and is essentially a summary of: (a) issues that have been agreed; (b) issues which remain to be agreed[i]; and (c) proposals for continuing the Mediation conversation going forward toward final overall resolution), must be agreed,  what legal justification is there for any concern by a TP or their legal representatives, that anything said in the course of Mediation may subsequently be relied upon by HMRC as being a new and significant tax fact.
  • What contract terms need to be agreed by a COM[ii] with a TP in order to both comply with HMRC overriding ‘Principles,’ and the:
  • Code of Professional Conduct of the COM’s professional regulator.
  • Code of Ethics, of any Mediation organisation, to which the COM belongs.
  • Terms of the COM’s professional indemnity cover.’

[i] I.E. there will be no Record of the outcome unless and until it has been agreed by both sides.

[ii] The author understands that while in certain cases, HMRC will agree to the appointment of a single external Mediator, that the number of cases in which this is appropriate and has happened is vanishingly small.