Art thefts are on the rise, but the resources given to the police are not keeping up. However, a new initiative by the government seeks to overcome the problem, by improved cooperation between the agencies involved. Mike Cooper reports.

You only have to look at the success of Hollywood blockbusters like Entrapment and The Thomas Crown Affair to realise that the public's perception of art theft is a very glamorous one. More often than not art thieves in the cinematic world work to carefully masterminded plans on behalf of a shadowy Mr Big who is bent on amassing a secret collection of rare works of art.

In the real world, art insurance specialists dismiss this notion and say that most money is made not from art theft but from fraud, where inferior quality items are passed off as genuine.

The art insurance industry is also concerned that the police do not have sufficient resources to deal with the problem of art theft.

Dick Ellis, managing director of the stolen antiques database Invaluable Trace, and a former detective on Scotland Yard's art squad, says that art is stolen to order only "in as much as the criminals' intelligence will tell them what is available to steal from a property. It is never to satisfy a mythical Mr Big - there is no such character."

He estimates that 80-85% of the 100,000 items registered on his company's database have been stolen in standard domestic burglaries from people who possessed just one or two antiques.

Charles Hill, another former Scotland Yard art detective, who now runs an art risk consultancy for insurers, agrees with Ellis. He says that although criminal networks are involved in selling stolen works of art and antiques, their actual theft is usually carried out by more lowly specimens.

"A thief will break into a well-to-do property and target the most valuable items. He will then sell them for cash far below their market value."

Stolen items usually exchange hands among the criminal fraternity for a fraction of their real value, until they reach top criminals who are able to find buyers willing to pay higher prices.

Scotland Yard's stolen art squad, however, is reported to have just three officers to pursue cases in London and abroad. The other 49 police forces have a total of just five officers dealing with art crime, mainly on a part time basis.

Perhaps because of the problem with police resources, art theft continues to grow. Julian Radcliffe, the chairman of the Art Loss Register, which works to recover stolen items, comments: "We have seen a huge increase in art theft in the UK, and our own caseload is rising as the police use us more and more to check items they suspect are stolen against our database. Art and antique theft has a low priority, because in both political and police target terms it lacks a powerful lobby group."

But this is beginning to change. The House of Commons Select Committee on Culture, Media and Sport published a report last December, which agreed that the police were not adequately resourced to deal with art fraud.

This led the Home Office to set up a working party with representatives from both the police and the art database registers to examine the problem. The working party is believed to be examining the feasibility of a public-private partnership between the police and stolen art database organisations. It is hoped this will improve the quality of data on the police national computer and increase the specialist expertise available to the police force.

Radcliffe is in favour of such an improvement: "We want to reduce the time it takes from logging a stolen item to its recovery," he says.

However, the government must not only decide who to charge, but how to charge for the new search facility. The Art Loss Register is currently funded partly by the art trade and insurance industry and partly by charging a finder's fee for successful recoveries, of between 10 to 15% of the item's value. In its ten year existence it has recovered items worth up to £100m, including a Cézanne worth £18m.

The Invaluable Trace System, on the other hand does not charge a finder's fee, only a one-off initial fee for registering an item on its database. Its recovery rate for lost items is 25%.

It remains to be seen how the government's apparent new zeal for improving co-operation will pan out. But, as Radcliffe points out, it must decide who will pay for this proposed system - the police or the victim. "The private sector", he says, "cannot do it for nothing."

Water worse than theft
It is not just theft and fraud that is causing the insurance industry problems where art is concerned. Stephen Rollo-Smith, fine art consultant at adjuster Property and Casualty Services, maintains that, while crime is a significant problem, it accounts for only a fraction of fine art claims.

"Water damage claims are a more significant factor than art theft. Theft represents only the tip of the iceberg," he says.

By way of example he says he has 15 claims for water-damaged antiques on his books, each worth at least £1m.

The fact is that water claims are less publicised by the media than theft, because such claims tend to be highly complex and involve tangled legal issues.

Rollo-Smith is also an expert on the legal issues surrounding recovered art and antiques. He believes there is a strong case for codifying this body of law, which is at present largely based on piecemeal case law.

He says: "One issue causing serious concern is that there is no legal definition in English law of an antique. The widely accepted term of an item being older than 100 years is in fact based on a description used by the United States customs service."

A further concern is the issue of ownership, particularly when a stolen item is recovered.

Here, case law often conflicts with statute law. For example, case law says effective title to ownership can never transfer to a stolen item. But the 1980 Limitations Act says civil action to recover an item cannot begin if it has been held for longer than six years.

Rollo-Smith stresses the importance of pre-risk surveys and valuations as much as a means for educating policyholders as a risk management tool.

He refers to the example of a family that inherited a long case clock with an enamel face featuring a painting of the Lady of the Lake - based on the tale by Sir Walter Scott. The family did not realise the topic of the painting until the valuer's visit, when it was valued at £6,000.