Fine Art Appraising #2:

Appraisals and Authentication

Read the previous articles in the series: Fine Art Appraisals

Introduction

Appraisal organizations such as the Appraisers Association of America (2009) advise their members that appraisals are opinions of value and not certificates of authenticity. This warning arises from clients of appraisers who believe that appraisals are statements of authenticity regarding the subject items being appraised. Appraisal organizations note that appraisal reports should contain a limiting condition note stating that the appraisal is only an opinion of value. Intuitively this seems illogical. To state that subject X has a value of 1 million dollars and in the same breath note that it is not clear that the item is authentic seems to negate the claim of value. It is almost like stating that X has been murdered but it is not clear if he or she is dead. An item cannot have the same value if it is authentic as it would if it is not. This is not to say that inauthentic items have no value; only that subtracting authenticity from an item removes a level of value from an item assumed to be authentic. Stating that the 1854 Chippendale side chair is worth $250,000 based on fair market value found in recent sales from Christies and noting that the appraisal is not providing a statement of authenticity, is to issue a seemingly contradictory or meaningless statement. Inauthentic or faux Chippendale chairs sell for a few hundred dollars, not $250,000. The problem arising here is that the note of questionable authenticity is not so much a contradictory statement as much as it is a statement of exculpability. What exactly is exculpability?

Appraiser Exculpability

Appraiser organizations have taken note of the misconception of how the public views the appraisal process and the liability associated with entering any note of authenticity into an appraisal. Authentication, whether for or against an item, may lead to litigation. Someone who has paid millions of dollars for a work of art, or who stands to gain millions from its sale, does not willingly accept authenticity conclusions negatively impacting the value of a given work without a challenge. The escape clause for the appraiser in the appraisal report is the note that the appraisal does not constitute an authentication. The appraiser note or limiting condition tells the client that he or she is exculpable or held harmless in terms of authentication and issues surrounding authentication. Unpacking the clause reveals that it is grounded on not only exculpability but that other considerations prevail. First, it announces that an appraisal does not consist of an authentication process. That is, the appraiser did not engage any scientific analysis, provenance research, or connoisseurial activities. He or she researched and provided a fair market value to the items rendered by the client, assuming they were what they were stated to be. Second it makes a point of asserting that since appraisers are not trained in authentication it is not expected that they provide authentication. A general practitioner of medicine is not trained in surgery and therefore it is not expected that surgery be provided by him or her. Thirdly, authentication is a costly process and if not handled properly may be damaging to a given subject item. If the client desires the process the appraiser may provide authenticators for the item at an additional cost (AAA, 2009).

Appraiser Training

The Appraisers Association of America (AAA, 2009), the International Society of Appraisers (ISA, 2009) and the American Society of Appraisers (ASA, 2009) provide education and limited training for individuals interested or engaged in appraising. Such programs are provided in house, in affiliation with colleges and universities, or outside organizations. The main courses consist of report writing, legal and ethical issues, IRS guidelines, research methodologies, the Uniform Standards of Professional Appraisal Practice (USPAP), and a varied quantity of courses in appraising printed works, rugs, silverware, porcelain, furniture, and fine arts. The New York University (2009) AAA group provides education studies in conservation, woods, and photography. All organizations are governed by the USPAP standards, and stress the ability to compose and write suitable appraisal reports. AAA offers mentorship or experience with accredited appraisers and also two years experience with the NYU certificate completion. Except for the required courses which mandate testing for competency, the other courses are of short duration - 10 hours. Please note that no organization offers any training in authentication. The focus and direction of the training is report writing and providing opinions of value. The short duration courses amount to an introduction to the various fields in appraising such as gemology, photography and so on. All three organizations require continued education credits to be achieved prior to the expiration of a membership. The basis of appraiser status is a combination of education courses, experience and most importantly the ability to provide appraisal reports. The various appraisal organizations provide the status upon membership application along with statements of background. Five years experience practicing appraising and report writing is a typical requirement to achieve accredited status (AAA, 2009).

Appraiser Expertise

Given that appraisal organizations provide no identified authentication program covering the process of scientific analysis, provenance research, and connoisseurship, it is troublesome for an appraiser to identify oneself as an authenticator of objects of art. Those that identify themselves as experts in this process seem to have lost all focus on what they are trained to do and what they are advised against doing. Appraisal organizations have consistently reminded their membership that appraisers provide opinions of value. Appraisers do not nor are they trained to, authenticate. Their expertise lies in their ability to provide quality in their opinions of value. Yet there are those who shout about being art fraud detectives, and authentication experts. Some have even listed themselves as expert witnesses solely on the basis of having attended a seminar on providing testimony as an expert witness. Those appraisers listing themselves as art fraud detectives or experts in a given specialty fail to recognize that it is against the consumer protection laws in many states to misrepresent having a particular specialty, expertise, or designation. "This section also prohibits misrepresentations regarding the sponsorship, approval, status, or affiliation of an individual. It prohibits misleading and false statements about the nature and authority of a person. For example, an accountant may not claim to be a Certified Public Accountant if that person has not taken and passed the CPA exam. Also, physicians may not represent themselves as qualified specialists when they are not" (Texas Bar, 1973). As far as being an expert witness, the requirements found in various Daubert rulings stipulate that expert witness testimony shall be used at the discretion of a given judge in a given court proceeding. In point, past experience as an expert witness does not guarantee use in the present nor does it provide a designation or badge of expertise. Further, the ability to provide expert testimony is a function of experience, education, training, supervision or peer review, and publication status. One would be hard pressed to argue for authentication expertise when the peer organization advises against it and provides no training or education to support it. Lacking the proper background would open the so-called appraiser authentication expert to judicial rebuke and opposition attorney challenges.

Appraisal and Authentication and How They Work Together

While appraisers are not trained to authenticate, their training and expertise lies in the ability to provide proper opinions of value. This does not mean that they cannot use evidence to support a view of authentication or non-authentication. For example, assume for the moment that a client requests that an appraisal for replacement value for insurance purposes be performed on a given Dali lithograph titled Aspiration signed by Dali. The client provides a Certificate of Authenticity indicating that the work was published by Collectors Ltd. and is signed by John Smith. In ascertaining the replacement value of the work, research documents indicated that the publisher was listed as having settled a case with the Federal Trade Commission regarding the sale of fake Dalis. In the settlement documents the work Aspiration was listed as having questionable authenticity. On the basis of evidence supporting the view that the subject item is of questionable authenticity the appraiser may provide a value reflecting the authentication status. Note here that the appraiser is not authenticating but carrying out appraiser training in providing opinions of value based on documented evidence. The appraiser also carried out the duty to provide due diligence (investigating all sources possible) in establishing the value of the subject item.

Conclusions

1. Appraisers are trained and educated to provide opinions of value.
2. Appraisal societies and organizations frown upon appraisers performing authentication.
3. Appraisal societies mandate that appraisal reports contain a limiting condition of no authentication process having taken place.
4. Appraisal organizations do not train appraisers to be authenticators.
5. Authentication is a separate and distinct process from appraising.
6. Expert witness status is not a designation or badge but a specific conferment arising in a specific judicial context.
7. Claiming specialized expertise or training in the absence of earned designation may violate the law.
8. While appraisers are not trained in the authentication process, they should avail themselves of the use of authentication evidence in the processing of their opinions of value.

References

• Appraisers Association of America , 2009. Retrieved on January 28, 2010 from www.appraisersassoc.org
• Appraisers Society of America, 2009. Retrieved on January 28, 2010 from www.appraisers.org
• International Society of Appraisers, 2009. Retrieved on January 28, 2010 from www.isa-appraisers.org
• New York University Appraisal Studies, 2009. Retrieved on January 28, 2010 from www.scps.nyu.edu
• Texas Bar, 1973. Retrieved on January 28, 2010 from www.texasbar.com

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— by John Daab Ph.D.  |  February 26, 2010

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