Looted art immune to limitation period

A ruling on the limitation period governing lost items has implications for the art and antiques world, writes Roger Pearson

A High Court ruling leaves little doubt that those who put items of art up for sale and fail to research their background do so at their peril.

The case, held during the summer vacation, centred on a tiny Dutch masterpiece with an estimated value of #700,000.

The Holy Family with Saints John and Elizabeth and Angels was painted by Joachim Wtewael in 1603. It disappeared from the Schloss Friedenstein art gallery in Gotha, East Germany, when the city fell into Russian hands at the end of World War Two.

The painting was smuggled to the West in the mid 1980s but then disappeared until 1992, when Panamanian corporation Cobert Finance tried to sell it through Sotheby's in London.

The dispute over the painting's future was between the German government and the City of Gotha (which sought its return) and Cobert-Finance (which claimed ownership).

By putting a new perspective on limitation periods, Mr Justice Moses' ruling has sent ripples through the art, antique and auction world – and the second hand goods market as a whole. Judge Moses made it clear that, although stolen property may not come to light for years after its disappearance, limitation periods cannot be used to override a rightful owner's claim.

The decision is viewed as a breakthrough which could assist former owners of looted works of art.

The judge ruled that the painting should be returned to the German authorities. His decision was greeted by Eversheds, who had fought for the painting's return as "a legal landmark" which could help former owners of other looted works of art.

Cobert Finance argued that the German authorities had lost the right to ownership of the picture, claiming that limitation periods meant that they had left it too long to bring their claim.

But, in overruling that argument, Judge Moses said that the law favoured the true owners of property which had been stolen, regardless of the period that had elapsed since the original theft.

Apart from having to surrender the painting, Cobert Finance now faces a legal bill estimated at more than #2m.

At Eversheds, the case for the German authorities was masterminded by German solicitor and lawyer Dr Michael Carl, who heads the firm's German desk.

He says the ruling is one of major importance and has served to restrict the access of those involved in "laundering" stolen goods to limitation periods as a means of side-stepping claims.

"Previously this was an ideal vehicle to achieve a sort of cleansing process, whereby the true owner of something that had been stolen would be deprived of proceeding with a restitution claim," he says.

"Dealers and auction houses will be expected to do a lot more homework on the provenance of what they are offering for sale. They will, in their own interests, need to search in all the newly available data banks before they can safely offer items for sale."