Deaccessioning of art & antiquities by a museum in breach of fiduciary duty

With reduced funding, some museums have turned to ‘deaccessioning’ the removal of an object from a museum collection with the intent to sell it.

‘Trustees of museums, like trustees of other public and charitable organizations, are subject to the legal obligations imposed upon fiduciaries.This proposition has, however, rarely been recognized either by museum trustees in their conduct of museum affairs, or indeed, by the legal system itself. As a result, museums have often been operated by their curatorial staffs and boards of trustees with little external supervision. Particularly in such areas as self-dealing, conflicts of interest and failure to observe donors’ directives.’ ‘The Fiduciary Duties of Museum Trustees’, by Patty Gerstenblith, Columbia-VLA Art and the Law (1983).

What claims may arise from deaccessioning in breach of fiduciary duty? see, ‘Art Deaccessions and the Limits of Fiduciary Duty’, by Sue Chen, Art Deaccessions and the Limits of Fiduciary Duty (duke.edu)

Art deaccessions prompt lawsuits against museums, and some commentators advocate using the stricter trust standard of care, instead of the prevailing corporate standard (business judgment rule), to evaluate the conduct of non-profit museum boards. This Article explores the consequences of adopting the trust standard by applying it to previously unavailable deaccession policies of prominent art museums. It finds that so long as museum boards adhere to these policies, their decisions would satisfy the trust standard. This outcome illustrates an important limitation of fiduciary law: the trust standard evaluates procedural care but cannot assess deaccessions on their merits. Yet this limitation, far from undercutting the trust rule, balances judicial review with protecting boards’ management discretion. This article ventures beyond formalist analysis of fiduciary duty and examines the non-legal, substantive rules governing art deaccessions. It argues that complemented by non-legal rules, the trust standard provides the best framework for adjudicating deaccession lawsuits because it ensures judicial scrutiny of deaccession procedures while leaving appraisal of deaccessions’ merits to museum professionals and the public they serve.’

The commercial settlement (i.e. through mediation) of a breach of fiduciary duty dispute resulting from the de-accessioning and sale of art and antiquities by a Museum, is therefore inextricably linked with established norms and standards of behaviour by Museum trustees.

See also Museum ethics: when the law plays catch up’

Posted on: March 23, 2021 by Alexander Herman:

Museum ethics: when the law plays catch up | Institute of Art and Law (ial.uk.com)

I am developing the negotiation and mediation of Art and Cultural Heritage Disputes as a niche practice area, and am a member of the Institute of Art & Law in London, where I am studying for a Diploma in Art Law. I plan to qualify as a mediator in 2024. I can then be appointed as an expert co-mediator to provide technical support to mediators on law, best practice, and ethics.

My book, the ‘Contentious Trusts Handbook’ contains a practice note contributed by the distinguished Art Historian, Pandora Mather Lees (www.artonsuperyachts.com), entitled, ‘Art & Heritage Assets – Duties of Trustees’, and I am currently researching substantive aspects of art and antiquities law for a new book I am planning to write for publication in 2023 provisionally entitled,

‘Fiduciary Theory of Art And Cultural Heritage’.

To view the current outline of the book please vists the ‘Art & Antiquities Disputes’ page at www.ihtbar.com.