Auction houses to settle anti-trust claims outside US

The settlement of the so-called Kruman case, subject to US court approval, means that any UK dealer involved in transactions at London salerooms between January 1993 and February 2000 is entitled to compensation. But individual shares of the proceeds are likely to be small as the number of potential claimants has been estimated at 150,000. As part of the agreement, a separate action brought by London legal firm Class Law on behalf of vendors at English auctions will not now be pursued.

The Kruman settlement is the latest, and probably the last, in a series of class actions arising from the price-fixing scandal that engulfed the auction houses over two years ago.

When the art market was at a low ebb during the early to mid-1990s, Sotheby’s and Christie’s had conspired to fix the rate of charges to clients to protect each other’s profits. By way of compensation to over 100,000 buyers and seller’s who attended their US salerooms over this period, the two auction houses agreed to pay $512m in November 2000, but this did not cover auctions outside America.

The difference between the two settlements – $512m and $40m – does not reflect the auctioneers’ relative turnovers in the US and elsewhere. But a New York lawyer familiar with both cases explained why.

“Firstly you have to remember that the Kruman case was dismissed by the presiding judge as ‘virtually worthless’, before his ruling was overturned by the Court of Appeal in March last year,” he said. “Secondly, the US settlement gave equal provision for buyers and sellers, whereas the non-US settlement is expected to divide the spoils in favour of sellers because the criminal trial of Sotheby’s during the intervening period failed to prove that they were guilty of fixing buyer’s premiums. The third point is that the whole world is aware of Sotheby’s and Christie’s financial difficulties at the moment, and to the impose punitive measures would probably be counterproductive.”

The agreed settlement is virtually equivalent to the £13m that the European Commission fined Sotheby’s last October for fixing prices at EU auctions.