Musrum Managemrntond Curatorship, Vol. 16, No. 2, pp. 105-I 10, 1991 Published by Elsevier Science Ltd. All rights reserved

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Editorial Legal Risks Facing Museums in England and Wales

Publication of the Museums & Galleries Commission consultative green paper, The Legal Status of Museum Collections in the United Kingdom (e&ted by Jer- emy Warren, ISBN 0 948630 40 X), has brought these problems back into the public arena and this document has to be read in the context of the views of the former Department of National Heritage, expressed earlier in 1996 in Treasures in Trust-A Review of Museum Policy, not least the statement that ‘a museum’s collections are to be held on behalf of the public as inalienable cultural assets’. Today this is patently not the case and it is arguable that collections in the pos- session of English and Welsh institutions calling themselves museums have prob- ably never been at greater risk. Any failure of the law to recognise the special status of museum collections is compounded by the current drive to reduce public expenditure on them, partly through increased trading activities. Consequently the Museums & Galleries Commission has been reviewing the options for legal reform, and possible models, with a view to advising Govern- ment, and in conjunction with the major firm of London lawyers, Allen & Overy, the Commission organised a seminar on ‘The Legal Status of Museum Collec- tions in the United Kingdom’ at their offices in the City of London, 24 April 1997. This seminar is seen as a substantial contribution to the review and it set out to look at the objectives going forward in terms of, for example, whether recommendations made in the consultative green paper are practical and tenable, whether the law does enough to protect collections, and what practical steps could or should be taken in respect of collections within the United Kingdom.

What then are the main legal risks currently facing museums and their col- lections? though this question immediately demands clarification of the purposes for which museums have been established and thus the legal environ- ments within which they acquired their collections and now hold them. In the view of the scholar-curator for whom the central function of museums is archival, objects are entrusted to museums-by gift, bequest or purchase-for their preservation by that institution for the benefit of the community (at least in theory). That is preservation in kind and within a specific intellectual environ- ment. However, for reasons better known to historians of the Law in England and Wales than to museum curators, this fundamental tenet of museums since the time of Elias Ashmole (himself a distinguished lawyer) has been largely ignored by the Law or has provided a challenge to those of its practitioners wishing to circumvent its obligations. You need look no further than the Hol- loway College saga.

At the heart of these problems is the fundamental issue that the rule against perpetuities forces museums to set themselves up as charities rather than public benefit trusts, while the maintenance of an archive of objects in perpetuity for

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the benefit of the public is not of itself a charitable purpose defined by the 1601 Act and subsequent legislation. The various fudges forced onto the Charities Commission understandably do not inspire great confidence when trustees choose to be uncooperative, and if the charitable object of a particular trust is to be educational, it is self-evidently undesirable for that ‘flag of convenience’ to sup- plant the primary purposes of the trust when they include the preservation of specific chattels in perpetuity. Indeed, it is essential that any such trust is so drawn up as to ensure that the collection is maintained inalienable in perpetuity for that primary purpose, and that it is not merely held as a disposable asset of a trust which includes educational purposes.

A failure to differentiate between chattels held as the object of a trust and those held as assets of a trust is probably the greatest legal risk to which museum col- lections are exposed today. Property held as the object of the trust has no pecuni- ary value as far as that trust is concerned. The trust is more the guardian of the property than its absolute owner, and the beneficiaries of the trust are the ultimate owners. Consequently, if disposal is under consideration because that trust is unable to continue to discharge its obligations, that property should always be handed over in kind to another suitably constituted trust which is ready and able to discharge the obligations placed upon the first trust in respect of that property. In recognising the changing abilities of trusts to discharge their obligations faith- fully, due to lack of funds and other predicaments, Cy-pres surely applies in this context just as much as it does with regard to convertible assets when a trust is wound up?

The paragraph in the consultative green paper on ‘Original purpose and Cy-pres’ is very interesting, but when the Court is called upon to clarify the intentions of the benefactor-or even the contract entered into by Sir William Burrell many years before his death-there is also the unwritten component which may be described as the intellectual environment within which the original transfer of property was made. As the pioneer in this field, Elias Ashmole could not refer to any such common understanding of the nature of a ‘museum’ and much of his tortuous negotiations with the University of Oxford were to establish precisely these principles. Subsequent benefactors have been able to take advantage of that common understanding, and failure to recognise this component constitutes a particularly insidious legal risk.

Gifts and bequests to museums, and even certain purchases made specifically for museums by persons with trustee responsibilities for their collections, embody the common understandings of the time as to what constituted ‘a museum’ and consequently the future envisaged for the property taken into its care. This has meant, at least until recent years, inalienability and, in theory, conservation in perpetuity for the benefit of the public or a section thereof. Indeed, much of the intentions of the benefactor are not spelt out in mind-numbing detail in the accompanying documentation because those intentions were encapsulated in the common understanding of the intellectual constructs of the time, not least that cultural entity called a ‘museum’. Only in recent decides have the mean- ings become sufficiently blurred as to require additional definition in the documentation in order that the benefactor’s wishes would be absolutely clear to a contemporary audience. This approach fits in well with the concept of property which constitutes the ‘fundamental purpose of the trust’ as set out in

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the consultative green paper, and we ignore or attempt to circumvent it at our peril. It apposite to suggest that the rules applying to heirlooms have a certain relevance here. The life tenant of an heirloom may only enjoy it in kind and is prohibited from converting it or committing waste in respect of it. In principle, heirlooms cannot be capitalised, at least not without the consent of the Court and those beneficiaries in being. The old continentalfidecommesso operated in much the same way, and this way of thinking could be explored with advantage.

Another important legal risk stems from the situation in which the Local Authorities find themselves. Their trustee responsibilities were clarified by Lord Halsbury back in the 1%‘Os, but those principles accord ill with the new trading culture being adopted today. The Museums & Galleries Commission Registra- tion Scheme specifically prohibits the mortgaging of collections by institutions seeking Registration, and it is useful to adopt the position that, in accepting the Commission’s requirements in this respect, those museum authorities applying for registration have pro tern publicly withdrawn their museum collections from the general collateral enjoyed by bodies in which the ownership of those collec- tions is currently vested. One may in principle welcome the former Secretary of State’s rather vague proposals that the Local Authorities should establish their museums as charitable trusts, though a strong case can be made that the Local Authorities are already single trustees in respect of their museum collections and are not-as compared to their office furniture and vehicles-absolute owners. Confirmation of this would have the desirable effect of removing the collections of registered museums at least from general collateral, in contrast to the largely illusory protection offered by Registration which can be withdrawn from at will.

The concomitant loss of pecuniary value might in turn facilitate their transfer into independent holding trusts which do not have the power to borrow against their collections, though it should always be remembered that the protection so afforded is directly proportional to the genuine independence of those trustees and little useful purpose is served by the exercise if all those trustees are active local politicians. There is no need to spell out the impropriety-at least within the United Kingdom-of attempting to use collections assembled for museum purposes as trading capital since benefactors did not entrust objects into the care of museums to be used as collateral in commercial activities.

Nevertheless, most citizens of the United Kingdom remain blissfully unaware of the extent to which Local Authority and university collections are already mortgaged, in breach of the requirements of Registration, and are thus in danger of being deaccessioned to meet obligations entirely unrelated to the museums caring for them. The University of Edinburgh drew back at the last moment from selling a major painting in the Erskine of Torrie Bequest to meet deficits in its general operating funds. The fudges forced on the Charity Commission- ers in respect of their accounting procedures have been evolved to address requirements very different from the long-term preservation of the integrity of museum collections, and as such they tend to erode the protection of those collections rather than strengthen it. ‘Basic information about uncapitalised fixed assets’ is always a dangerous hostage to fortune, particularly in respect of the Local Authority and university museums, in that it encourages them to emulate certain of the high-profile American museums by revising their ‘mission statements’ at will so as to legitimise the process of transferring trenches of

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collections from alienable objects to disposable assets rather than following the principles of Cy-pres.

The effectiveness of the Gift-Over has been demonstrated by the Parker and Pepys Bequests to Cambridge colleges and it is extraordinary that so few benefac- tors have chosen to use this device. Property which is subject to an effective gift- over can never be deemed to be a disposable asset. How could the purchaser ever obtain good title to the property if the beneficiaries could some time in the future contest the sale? Recently this way of thinking has taken on a new lease of life, and for some years attempts had been made to impress upon funding bodies, not least the National Art-Collections Fund, that the decisions to make their grants are as much based on the contexts which the proposed acquisitions are to join, as on the virtues of the objects themselves. Consequently the grant-giving bodies have a responsibility to use their muscle to ensure that those contexts are protected as well as the individual acquisitions in which they have played a more direct role.

In the event this has been achieved by Sir Denis Mahon in the arrangements which he has put in place to ensure the future of the museums and galleries throughout the United Kingdom which under the terms of his Will he intends to benefit from the 61 works from his outstanding collection of Italian Baroque paintings. These paintings may be forfeited entirely if, in his view, H.M. Govern- ment at any time before his death falls short of fulfilling its various commitments in support of public collecting throughout the United Kingdom for the benefit of the Nation in perpetuity. Subject to this proviso, the National Art-Collections Fund will receive the entire bequest for deposit in the various museums and gal- leries specified in his Will, but the legal ownership will remain with the Fund. Sir Denis Mahon has asked that the Fund should at once withdraw any works deposited by it if and when any of the museums or galleries concerned should decide to sell off any item from its permanent collection of paintings and draw- ings. This has been welcomed enthusiastically by the National Art-Collections Fund as greatly strengthening the arms of the British public collections against any short-sighted attempt to press them to consent to a policy of disposal of works of art belonging to them, and presumably the Fund, in adopting this new policy, will actively encourage other donations made through it to be subject to the same provisions.

Apart from deaccessioning, Sir Denis Mahon has always been bitterly opposed to admission charges for access to permanent collections and any recipient institution funded by H.M. Government introducing such admission charges will automatically forfeit those paintings from his collection deposited by the Fund. The then National Heritage Secretary, Virginia Bottomley, in a letter to The Daily Telegraph (3 December 1996) expressed the Nation’s gratitude to Sir Denis for his generosity and stated that ‘The Government agrees with Sir Denis that items should not be sold from permanent collec- tions’ in accordance with her Department’s policy review, Treasures in Trust, but she insisted that ‘Charging for admissions is a matter for the trustees of individual institutions’. Unfortunately the British tradition of breaking trust with public benefactors has been given spurious respectability by successive Governments of all hues and H.M. Treasury, and although both the generos- ity and determination of Sir Denis Mahon must be the subject of general rejoicing, the future lies in other hands.’

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1. Sir Denis Mahon, photographed at the National Gallery, London, 1997, on the occa- sion of the exhibition, Discovering the Italian Baroque: The Denis Mahon Collection,

reproduced by courtesy of The National Gallery.

The courageous lead given by Sir Denis Mahon and his legal advisers must be taken up by all British lawyers and museum curators by advising potential benefactors that they should use the ‘Mahon formula’ to ensure that not only are their own benefactions not deaccessioned or placed in jeopardy by being used as trading capital but that the existing collections to be endowed are similarly protected. After relatively few years of concerted effort inalienability will become de&to unavoidable and future harmonisation with the legisla- tion of the civil law countries which comprise the overwhelming majority of the European Union will ensure that this speedily becomes de jwe. Continued reckless growth in both numbers and size of museums in the United Kingdom, in great part fuelled by Lottery funds, points to even more acute financial crises in the relatively near future, but the biggest legal risk of all remains the marked reluctance of British citizens to defend the spirit of past benefactions. It is all too easy to take refuge behind the niceties of legal drafting and politi- cal realism while choosing to ignore the spirit in which past benefactions were made and future responsibility for them was accepted by the community. These are perhaps not so much legal risks as evidence of a decline in civil morality. In the final analysis the protection to be afforded by the best laws in the world will be rendered ineffectual if the community cannot be bothered to ensure that they are administered scrupulously.

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Notes

1. The Denis Mahon Collection was exhibited in the National Gallery, London, 26 February-18 May 1997, accompanied by a full catalogue (79 paintings, including three works now in other collections; and 30 drawings by Guercino selected from the 46 which have been since 1986 on long-term deposit at the Ashmolean Museum, Oxford). Both exhibition and catalogue were entitled Discovering the Italian Baroque: The Dents Mahon Collection and the latter (ISBN 1 85709 177 9), prepared by Gabriele Finaldi with contributions by Christopher Brown, Hum hrey Wine and Denis Mahon himself, is prefaced by an important introductory essay 1 y Michael Kitson, ‘Sir Denis Mahon: Art Historian and Collector’, which assesses the fundamental role he has played in raising the status of Seicento Italian painting and his hardly less remarkable political achievements.