McLaren has been awarded around £9 million in damages after it sued driver Alex Palou at the High Court over a breach of contract.
McLaren Indy LLC and McLaren Racing, which run the Arrow McLaren IndyCar team and McLaren’s Formula One team, claimed more than 20 million US dollars (£15 million) in losses from Mr Palou and two companies connected to him.
A trial in London last year was told that the 28-year-old, who has won four IndyCar championships, agreed in October 2022 to drive for McLaren in 2024, 2025 and 2026, but in August 2023 announced that he would not fulfil the agreement.
The Spaniard admitted breaching the contract, but disputed that he should pay damages, with his lawyers describing the damages claim as “vastly inflated” and a “bare-faced attempt to ‘take Mr Palou to the cleaners’”.
In a judgment on Friday, Mr Justice Picken upheld several of McLaren’s claims relating to at least 12 million US dollars (£8.9 million) worth of losses.
This included claims for around 1.3 million dollars (£960,000) in additional driver salaries that had to be paid after Mr Palou’s breach of contract, and losses due to a change in a sponsorship agreement.
Discussing an agreement with one driver made after Mr Palou’s decision, Mr Justice Picken said: “It is impossible, in such circumstances, to conclude, as the defendants invite the court to conclude, that the defendants’ breach was not an effective cause of the renegotiations that took place.”
In the 124-page decision, the judge said Mr Palou’s decision not to join McLaren was “the elephant in the room”, even if it was not used as leverage.
Mr Justice Picken also described the driver as “an honest and engaging witness”.
The automotive company did not succeed on a claim for lost profits related to some Formula One sponsorship benefits.
McLaren had claimed around 4.1 million dollars (£3 million) for “performance-based losses”, including prize money, some sponsorship revenue and driver compensation.
Mr Justice Picken halved this amount “to account for uncertainty”, meaning that around two million dollars (£1.5 million) would be granted instead.
After Friday’s judgment, McLaren Racing chief executive Zak Brown said: “This is an entirely appropriate result for McLaren Racing.
“As the ruling shows, we clearly demonstrated that we fulfilled every single contractual obligation towards Alex and fully honoured what had been agreed.
“We thank the court for recognising the very significant commercial impact and disruption our business suffered as a result of Alex’s breach of contract with the team.”
In a statement, Mr Palou said he was considering his options.
He said: “The court has dismissed in their entirety McLaren’s Formula One claims against me which once stood at almost 15 million dollars. I’d like to thank Otmar Szafnauer for his expert assistance.
“The court’s decision shows the claims against me were completely overblown.
“It’s disappointing that so much time and cost was spent fighting these claims, some of which the court found had no value, simply because I chose not to drive for McLaren after I learned they wouldn’t be able to give me an F1 drive.
“I’m disappointed that any damages have been awarded to McLaren. They have not suffered any loss because of what they have gained from the driver who replaced me.
“I am considering my options with my advisers and have no further comments to make at this stage.
“I look forward to the upcoming season with Chip Ganassi Racing.”
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