Thwaytes vs. Sotheby’s*
Background:
The case concerned a professional negligence claim by Thwaytes against Sotheby’s, a global art auction house, relating to a painting believed, by some, to be an autograph work by Caravaggio. The Plaintiff had inherited the painting from a relative who was an avid art collector and had previously sold an original Caravaggio work to a US museum. The Plaintiff consigned the painting to the auction house for research and advise to determine whether the painting he inherited was an autograph replica, knowing that the original was already on display in an American museum. The auction house determined it was a 17th century copy by an anonymous artist. The Plaintiff decided to sell the painting at auction for £42,000. The painting was purchased by a well-known Caravaggio scholar who subsequently identified the painting as real and it is currently on display at a London museum and insured for £10 million.
Case Characteristics
Jurisdiction: UK
Case Stage: Early stage
Case Type: Prof’l Negligence
Funding Period: 30 months
Case Economics:
Proceeds: Nil
Investment: £2.3MM
Multiple of Capital: 0X
Gross IRR: NM
Case Overview:
Litigation: Plaintiff claimed professional negligence against the art house for failing to properly identify the painting as an original
Damages: Lost profits
Stage: Manager was approached at the early stages of the claim as the Plaintiff did not have the financial resources to pursue the case
Manager Assessment:
Case Merits: Counsel had determined the case had good merits and a high probability of success
Representation: The case was being represented by counsel with experience and a good track record in similar cases. The team included an art litigation specialist who had a track record of success in similar claims
Collectability: multinational auction house
Commitment: £2.3MM to pay out of pocket expenses
Case Outcome:
Plaintiff was not successful at trial and decided not to appeal. Manager lost £2.3MM
Lessons Learned:
Rigorously review the budget for the Plaintiff and the Defense (In the UK, the Defendant is awarded defense costs if the Plaintiff loses)
Cases involving art have a high degree of subjectivity. The firm has learned to only pursue those cases where the claims being made can be easily substantiated and not subject to a great degree of interpretation
Litigation Finance has to absorb some losses along the way…
* Source: Various articles on Boodle Hatfield, Clyde & Co. and Forsters websites. NM = Not Measurable