The UK has passed a law that allows British museums to return looted art works to the heirs instead of making payments. In an era when there is much more art than money in the public sphere, the change would seem to be an ideal solution to one of the quandaries of restitution. BBC News explains how the 2000 establishment of the Spoliation Advisory Panel to pass judgment on restitution claims set the new law in motion:

Since then there have been nine cases of artefacts held by British museums adjudged to have been stolen from their rightful owners. However national institutions, like the British Museum or the Tate, had been forbidden from returning items by legislation preventing them from disposing of artwork in their collections. Instead the institutions in question would make an ex-gratia payment based on a valuation of the item, in lieu of returning the item itself. Examples of this include a £125,000 payment made by the Tate in 2001 to the former owners of a painting by Dutch artist Jan Griffier. In 2006, the British Museum paid £175,000 to the heirs of an art collector whose Old Master drawings were stolen by the Nazis.

UK Museums Can Return Looted Art (BBC News)