What follows, by way of background, is drawn almost entirely from the Agreed Narrative Document prepared by the parties for the trial. It is, as such, almost entirely uncontroversial.
The IndyCar Series and other open-wheel competitions
The highest class of single seater motor car racing in the world is Formula 1 ('F1'): a racing competition which runs between March and December every year, and consists of 24 Grand Prix races, which take place at different racetracks (comprising tracks and street races, but not oval races) around the world.
There are various other motor racing competitions, including the IndyCar Series, which is the premier professional open-wheel car racing championship in North America. A form of IndyCar racing was first started over 100 years ago, albeit that the name and exact format of the competition has changed and evolved since then. The current competition has been running since 1996. The IndyCar Series is supported by developmental racing series, including Indy NXT by Firestone (previously known as Indy Lights).
McLaren are the only corporate group that currently has teams in both F1 and the IndyCar Series. McLaren have competed in F1 since 1966 and began competing full-time in IndyCar in 2020 (initially through an alliance with Schmidt Peterson Motorsports, a team which it subsequently acquired).
The IndyCar season ordinarily runs for six months from March until September each year. The number of races in each season is at the discretion of the owner of the IndyCar Series and can, therefore, vary. For example, the 2024 IndyCar season comprised seventeen championship races in total, sixteen of which took place in the United States and one of which took place in Canada.
The IndyCar Series is renowned for being a high-speed competition, with diverse tracks. Races in the IndyCar Series comprise oval circuits, road courses and street circuits. The most important event in the IndyCar Series calendar is the Indy500, in which 33 drivers take part in a 500-mile race around the Indianapolis Motor Speedway track. The history, audience size, and prize money make the Indy500 the most prestigious event of the IndyCar season.
There are currently 11 full-time racing teams in the IndyCar Series championship, including CGR - the team for which Mr Palou presently drives - and McLaren Indy's team, Arrow McLaren.
In the 2024 IndyCar season, an IndyCar team could have between two and five cars on the starting grid. From 2025, the existing teams in the IndyCar Series entered into a series-wide 'charter system' (the 'Charter') that guarantees a total of 25 cars for these teams in IndyCar, imposes a cap of three cars per team, and provides these teams with the right to compete in every IndyCar race except the Indy500.
In the 2020, 2021, and 2022 IndyCar Series, McLaren Indy ran two full-time cars: Car #5 and Car #7. McLaren Indy launched a third car, Car #6, full-time from 2023.
An ordinary race weekend consists of two practice sessions on Friday, one practice session on Saturday morning and a qualifying session on Saturday afternoon. The race itself takes place on Sunday. Drivers compete in the Drivers' Championship and are awarded points based on their finishing position in the race, as well as for achievements during the qualifying sessions and on race day (e.g. 1 point for pole position, 1 point for leading at least one lap, and 2 points for leading the most laps during the race). Until the 2023 season, a 'doubled points' system was adopted for the Indy500, by which double the value of points were awarded for finishing positions and other achievements in the Indy500 when compared with those which were awarded for other IndyCar championship races.
In any given season in the IndyCar Series, every team will use the same chassis, which is purchased from an Italian manufacturer, Dallara. There are two engine manufacturers - Honda and Chevrolet - each of which supply different teams in the IndyCar Series, with an equal split across the teams. McLaren Indy race cars are fitted with a Chevrolet engine. In contrast, CGR's cars have Honda engines.
Sponsorship
IndyCar teams are likely to have several sources of revenue, which include prize money and the monies they receive from any 'paying' driver (i.e. a racing driver who pays money to an IndyCar team in order to be one of its drivers). In truth, sponsorship revenue is the main revenue stream for the majority of teams in the IndyCar Series.
Commercial sponsorship can take many forms. For example, sponsors can buy naming rights (e.g. in respect of the team or a particular car) or may choose to buy livery sponsorship (e.g. on the car livery or the wider team livery, including on driver overalls). The more prominent the relevant branding space, the more valuable it is likely to be (the aeroscreen, sidepod, and rear wing of the car are considered to be particularly valuable). Sponsors may also buy access to a team's commercial assets and rights, or hospitality benefits, including at race days.
Different sponsors value different features of IndyCar sponsorship: whilst some will favour on-car branding, and the resulting exposure of their products and brands to fans and potential consumers, others are primarily interested in the 'business-to-business' (or 'B2B') opportunities that may arise from IndyCar sponsorship. Sponsors may choose to sponsor a team for a particular race or across one or more seasons, and IndyCar teams may have a rotating roster of sponsors.
The process of obtaining sponsors varies from team to team. However, in respect of livery, teams very often use 'rate-cards': internal documents that guide the price that the team will seek when selling branding rights to sponsors.
As for McLaren in particular, sponsorship revenue represents McLaren's main source of revenue. McLaren have over 50 sponsors (or partners) across different racing platforms, including F1. They sell a variety of different assets to sponsors, including: (a) naming rights for both the team and particular cars; (b) other branding rights, for its cars, drivers, and team uniforms; (c) hospitality packages at races; and (d) time with its drivers. Sponsors can also become 'official partners' for a particular aspect of the team's operation.
The main sponsorship asset that McLaren have are their branding rights. Like other teams, McLaren ascribe values to particular locations on the car, which are recorded in their rate cards. For the IndyCar Series, McLaren Indy has two rate-cards for each car: an internal rate-card, representing "the bottom line before [it] will walk away from a deal", and a pitch rate-card, which will be used as the "starting position in negotiations".
In addition, McLaren Indy sells naming rights, for both the team and each of its cars. In respect of the former, the Arrow McLaren team takes the first part of its name from Arrow Electronics Inc. ('Arrow'). Arrow also sponsors Car #5. The primary sponsors of Car #6 and Car #7 meanwhile are NTT Data Americas, Inc ('NTT') and RJ Reynolds Vapor Company ('RJV') respectively. Each of those cars will carry the name of the relevant sponsor or the name of a specific product.
McLaren Indy has three broad levels of sponsorship: gold, silver, and bronze, where sponsors are categorised by reference to their level of investment. As a general rule, it also prioritises long-term sponsorships and ideally seeks to secure sponsors for between 10 to 15 years, instead of shorter 3 to 5 year deals.
Formula 1
F1 comprises two title competitions: the Drivers' Championship, in which individual drivers compete for points, and the Constructors' Championship, which is a competition between the racing teams. Each team has two full-time drivers, who will ordinarily compete in any given race, as well as reserve drivers, who will drive in the place of a full-time driver in certain circumstances (e.g. injury). Unlike the IndyCar Series, each racing team is, by regulation, required to design and develop significant parts of their race cars themselves.
The AP Agreements
Mr Palou first raced in the IndyCar Series in 2020 (his 'rookie' year) when he drove for Dale Coyne Racing.
On or around 1 November 2020, Palou Motorsport (then known as ALPA Racing SL) entered into an agreement with CGR, pursuant to which the former agreed to procure the services of Mr Palou as a racing driver (the 'CGR Driver Agreement'). The CGR Driver Agreement commenced on 1 November 2020 and was due to terminate on 31 December 2022. However, it provided for CGR to have the option, exercisable by written notice from CGR to Palou Motorsport on or before 1 September 2022, to extend its term until 31 December 2023.
The same parties entered into a related driver sponsorship agreement (the 'CGR Sponsorship Agreement'), pursuant to which CGR was licensed to exploit the name, signature, voice, likeness, photograph, caricature, image, biographical material, and endorsement of Mr Palou.
Pursuant to the CGR Driver Agreement, during the 2021 season, Mr Palou drove for CGR in the team's Car #10, alongside Mr Scott Dixon (who had been the IndyCar champion in 2020), Mr Marcus Ericsson and another new driver, Mr Jimmie Johnson. Mr Palou went on to win the 2021 IndyCar Championship.
The terms of both the CGR Driver Agreement and the CGR Sponsorship Agreement were amended at the end of Mr Palou's first season with CGR, by an agreement dated 20 December 2021 (the 'First CGR Amendment').
I will return to this later. However, on 4 March 2022, Alpa Racing USA entered into a driving agreement with McLaren Indy, pursuant to which Alpa Racing USA agreed to procure Mr Palou's services as a racing driver for McLaren Indy in the IndyCar Series in the 2023 to 2025 season (the 'March 2022 McLaren Agreement').
During the 2022 season, Mr Palou drove for McLaren's F1 team in its 'Testing Previous Car' ('TPC') Programme (as part of which McLaren Racing and other F1 teams are permitted to run F1 cars from previous seasons) and took part in certain Free Practice 1 ('FP1') sessions (the first one-hour practice session, which ordinarily takes place on Friday evening before a Grand Prix, as above). Mr Palou was required to notify CGR of any such testing and to seek and obtain its confirmation that he could participate in the same.
On 11 July 2022, CGR exercised the option in the CGR Driver Agreement by written notice, requiring Mr Palou to continue to drive for CGR in the 2023 season.
A mediation between Mr Palou, McLaren Indy, and CGR followed. Mr Palou drove for CGR in the 2023 season.
Also, in the wake of the mediation, on or around 29 September 2022, Palou Motorsport entered into a further agreement with CGR, amending the terms of the CGR Driver Agreement and the CGR Sponsorship Agreement (the 'Second CGR Amendment'). The recitals to the Second CGR Amendment record that Mr Palou/Palou Motorsport had "indicated their desire to pursue opportunities for [Mr Palou] to drive in Formula One beginning no later than the 2024 season and to prepare therefore in 2022 and 2023 with simulator, track testing, reserve driver activities, and otherwise, with McLaren Racing or perhaps other Formula One teams, provided those activities do not conflict with Driver's Team commitments and responsibilities during the Term of the [CGR Agreement and CGR Sponsorship Agreement]...".
On or around 1 October 2022, McLaren Indy and Alpa Racing USA entered into a written agreement, pursuant to which Alpa Racing USA agreed to procure Mr Palou's services as a racing driver to McLaren Indy, including in the IndyCar Series, in exchange for compensation (the 'AP Driving Agreement').
On the same date, McLaren Indy and Alpa Racing USA also entered into an agreement pursuant to which the former was permitted to exploit Mr Palou's name, fame, reputation, and likeness in exchange for compensation (the 'AP Promotions Agreement'). The AP Driving and Promotions Agreements each state that they were entered into "in parallel to and at the same date" as each other.
That position was clarified in a further agreement of the same date, between McLaren Indy and Alpa Racing USA, which concerned the inter-relationship between the AP Driving and Promotions Agreements (the 'AP Link Agreement').
On 1 October 2022, Mr Palou and each of the Claimants also entered into a further written agreement, by which Mr Palou gave various personal warranties and guarantees to McLaren Indy in respect of the performance of the AP Driving Agreement, Promotions Agreement, and Link Agreement (the 'AP Undertaking Letter Agreement'). By clause 1 of the AP Undertaking Letter Agreement, Mr Palou was, on demand, obliged to pay and discharge all sums of money and liability due, owing, incurred or unpaid by Alpa Racing USA in respect of the AP Driving Agreement and AP Promotions Agreement. The AP Driving, Promotions, Link, and Undertaking Letter Agreements are together referred to as the 'AP Agreements'. I will come on to address these more fully later when dealing with the issues in dispute.
The extension of the CGR Driver and Promotions Agreement to 2027
On 1 August 2023, CGR and Alpa Racing USA entered into a third amendment to the CGR Driver Agreement and the CGR Sponsorship Agreement (the 'Third CGR Amendment'). By the Third CGR Amendment, it was recited that CGR and Alpa Racing USA/Mr Palou wished to extend the Terms of the CGR Driver Agreement and AP Promotions Agreement; it was agreed that the CGR Driver Agreement became effective on 1 November 2020 and terminated on 31 December 2027; and CGR and Alpa Racing USA/Mr Palou consented to the substitution of Alpa Racing USA for Palou Motorsport SL in the CGR Driver and Sponsorship Agreements and all amendments thereto.
The indemnity provided by CGR to the Defendants
Also on 1 August 2023, CGR and the Defendants entered into a "Settlement Agreement" (the 'Settlement Agreement'). By clause 4 of the Settlement Agreement, CGR agreed: (a) to bear "all reasonable legal fees and expenses associated" with any legal action commenced by McLaren Racing, insofar as it relates to the AP Driving Agreement or the negotiation or entry of the Settlement Agreement itself; and (b) to "defend and indemnify [the Defendants]" from any legal claims brought by McLaren Racing, including "all legal fees and expenses, and damages of any kind...".
The Defendants' breaches of the AP Agreements
On 8 August 2023, representatives of Alpa Racing USA/Mr Palou - Mr Jonathan Hadaya and Mr Adam Ross, both of whom are US attorneys - informed Mr Zak Brown, Chief Executive of McLaren Racing, that the Defendants had entered into a new, multi-year contract with CGR, pursuant to which Mr Palou agreed to provide his services as a racing driver to CGR for the 2024, 2025, and 2026 IndyCar Series.
Thereafter, on 10 August 2023, Mr Tim Murnane, McLaren's Legal Director and Company Secretary, sent a letter to Alpa Racing USA/Mr Palou stating that, if it was their intention to perform the contract with CGR, this would constitute a clear breach of the AP Driving Agreement, including clauses 2.3, 2.5, and 15. Alpa Racing USA/Mr Palou were invited to confirm by return that Alpa Racing USA would comply with their obligations in the AP Driving Agreement including by procuring the attendance of Mr Palou at the F1 Grand Prix, which was due to take place in Singapore in September 2023.
In the absence of such confirmation, on 12 August 2023, Mr Murnane sent a formal notice of breach to Alpa Racing USA/Mr Palou pursuant to clause 12.2.1 of the AP Driving Agreement.
On 21 August 2023, Alpa Racing USA/Mr Palou's representatives responded to McLaren, communicating Alpa Racing USA/Mr Palou's intention not to perform their contractual obligations under each or any of the AP Agreements.
Driver line-up at McLaren Indy
McLaren Indy has run Car #5 and Car #7 in IndyCar since 2020 and launched Car #6 full-time from 2023. The driver line-up for McLaren Indy in what at trial was described as the actual scenario between 2022 and 2025 was:
|
|
Car #5 |
Car #6 |
Car #7 |
|
2022 |
Pato O'Ward |
N/A |
Felix Rosenqvist |
|
2023 |
Pato O'Ward |
Felix Rosenqvist |
Alexander Rossi |
|
2024 |
Pato O'Ward |
Callum Ilott (2 races)
Théo Pourchaire (5 races)
Nolan Siegel (10 races) |
Alexander Rossi (16 races)
Théo Pourchaire (1 race) |
|
2025 |
Pato O'Ward |
Nolan Siegel |
Christian Lundgaard |
After the Defendants communicated Mr Palou's decision not to drive for McLaren Indy in breach of the AP Agreements, McLaren Indy signed another racing driver, Mr David Malukas, to drive Car #6 for McLaren Indy. The relevant agreements of the same date are comprised of a driving agreement, promotions agreement, and associated undertaking letter.
On 8 September 2023, Mr Malukas was formally announced as a driver for McLaren Indy. At that time, he was due to drive alongside McLaren Indy's existing drivers, Mr Pato O'Ward and Mr Alexander Rossi, for the 2024 season.
Mr O'Ward originally provided his services to McLaren Indy pursuant to a driving agreement dated 22 October 2019 (the 'POW Driving Agreement'). That agreement was first amended on 26 May 2022 (the 'POW 2022 Amendment'). The POW Driving Agreement was further amended on 28 February 2024 (the 'POW 2024 Amendment').
Mr Rossi's contract as a driver for McLaren Indy was due to expire at the end of the 2024 season.
On 12 December 2023, McLaren Indy also entered into a letter agreement and associated undertaking letter with Mr Christian Lundgaard, which gave McLaren Indy the option to use his services in the 2025 season.
On 11 February 2024, Mr Malukas was injured in a mountain bike accident that left him with torn ligaments and a dislocated wrist.
On 4 March 2024, McLaren Indy entered into an agreement with another racing driver, Mr Callum Ilott, pursuant to which he agreed to drive for McLaren Indy in the first two races of the 2024 IndyCar Series (the 'First Ilott Letter Agreement'). On the same day, McLaren Indy also entered into a further agreement with Mr Ilott, which gave McLaren Indy the option to use his services as a driver in the 2025 and 2026 IndyCar Series seasons (the 'Ilott Option Agreement'). McLaren Indy subsequently entered into a further agreement with Mr Ilott, dated 5 April 2024, pursuant to which he agreed to drive for McLaren Indy in the 2024 Indy500 (the 'Second Ilott Letter Agreement'). That race took place on 26 May 2024.
On 28 April 2024, McLaren Indy formally terminated its agreements with Mr Malukas. Thereafter, on 9 May 2024, McLaren Indy entered into driving and promotions agreements with Mr Théo Pourchaire for the 2024 IndyCar Series, with options for three subsequent seasons (the 'Pourchaire Agreements'). Around the same time, on 1 June 2024, McLaren Indy also entered into a further agreement with Mr Lundgaard, extending the option in respect of his services so that it could be exercised any time up to and including 1 July 2024 (the 'Lundgaard Option Agreement').
On 18 June 2024, McLaren Indy signed Mr Nolan Siegel for the remainder of the 2024 IndyCar Series, as well as the 2025 and 2026 seasons, pursuant to a driving agreement, promotions agreement, and undertaking letter (together, the 'Siegel Agreements'). Mr Siegel is a young driver who pays monies to McLaren Indy as part of the Siegel Agreements.
The following day, on 19 June 2024, McLaren Indy also exercised its option in respect of Mr Lundgaard, so that he would drive for McLaren Indy from the beginning of the 2025 IndyCar Series. The resulting agreements are a driving agreement, promotions agreement, and link agreement, each dated 19 June 2024 (together, the 'Lundgaard Agreements').
As matters stand, therefore, McLaren Indy's present driver line-up is Mr O'Ward (Car #5), Mr Siegel (Car #6), and Mr Lundgaard (Car #7).
Mr Palou continues to drive for CGR.
McLaren's case (in outline)
It is against this background that McLaren bring claims for damages in respect of the Defendants' breach of contract, further or alternatively for wasted expenditure and/or unjust enrichment in respect of the US$400,000 sign-on bonus that was paid to Mr Palou (and which he has retained, notwithstanding the admitted breach).
First, McLaren seek lost profits in the sum of US$1,312,500, representing the additional sums that McLaren Indy has incurred or expects to incur in respect of driver salaries or other fees which would not have been incurred absent the Defendants' breach.
McLaren's position is that, had the Defendants complied with their obligations, the driver counterfactual would have seen: Mr O'Ward driving in Car #5 (2024 to 2027); Mr Palou driving in Car #6 (2024 to 2027); and Mr Siegel driving in Car #7 (2025 to 2027), replacing Mr Rossi (who would have driven Car #7 in 2024).
In the wake of the breach, McLaren Indy signed Mr Malukas to drive Car #6. However, on 11 February 2024, Mr Malukas sustained a wrist injury in a mountain bike accident and was unable to compete for McLaren Indy.
McLaren's position is that, by reason of the Defendants' breaches, it was necessary to pay additional salary costs and/or the payment of such sums represented a reasonable attempt by McLaren to mitigate their losses. In this respect, McLaren claim for losses representing the additional salary that McLaren Indy had to pay to Mr O'Ward, who, in Mr Palou's absence, became indispensable as McLaren Indy's franchise driver and was therefore able to secure considerably higher fees in negotiations than would have been the case in the counterfactual.
Secondly, McLaren seek lost profits in the sum of US$7,266,902, representing losses incurred in respect of the renegotiation of what was described at trial as the NTT Agreement entered into with NTT, which they maintain was entered into on the understanding that Mr Palou would drive for McLaren Indy. In the light of the Defendants' breach, McLaren say that they had to renegotiate the NTT Agreement with reduced base fees and provide a series of 'make goods' in that respect in two amended agreements. NTT has since terminated the NTT Agreement. In the counterfactual scenario, McLaren contend, the amendments to the NTT Agreement would not have been necessary and NTT would instead have paid the base fees payable in the original NTT Agreement. Accordingly, McLaren seek lost profits representing the reduction in base fees received from NTT under the NTT Agreement and losses associated with the termination of the NTT Agreement for the following periods: 2024-2026 (prior to termination): US$5,382,344; and 2027 (after termination): US$1,884,559.
Thirdly, McLaren seek lost profits in the sum of US$500,000, representing the uplift that McLaren Indy would have received pursuant to what was described at trial as the GM Agreement, under which General Motors LLC ('GM') agreed to lease engines to McLaren Indy in return for sponsorship benefits and to provide team support payments to McLaren Indy. McLaren explain in this context that, under clause X of the GM Agreement, the team support payments were reduced by US$500,000 for each season in which the drivers of Arrow McLaren's three cars were not "A level drivers". As a result of the Defendants' breach, McLaren say that they did not meet the A-level driver requirement for 2024 and did not receive the additional US$500,000 from GM - hence the claim for that amount against the Defendants.
Fourthly, McLaren seek lost profits in the sum of US$5,839,809 by way of other IndyCar sponsorship revenue, which represents the difference between the amount that McLaren have recovered, or now expect to recover, from other sponsorship revenue from its participation in the IndyCar Series, and the sums that McLaren reasonably expected to receive with Mr Palou as their driver.
Fifthly, McLaren claim lost profits in the sum of US$548,490, representing F1 sponsorship benefits, which McLaren say that they have been required to provide to NTT by way of compensation and/or the renegotiation of the NTT Agreement.
Sixthly, McLaren seek performance-based revenue in the sum of US$4,102,876, representing the difference between the performance-based revenues that McLaren obtained in the actual scenario compared to the counterfactual scenario. Those sums represent differences in the prize money and performance-related sponsorship revenue received by McLaren, taking account of related savings in driver compensation.
It is McLaren's case that the losses in respect of (i) NTT base fees in 2027, (ii) other sponsorship revenue, (iii) F1 benefits, and (iv) performance-based revenues represent the loss of a chance of obtaining the additional revenues. Applying a loss of chance approach, McLaren's case is that they satisfy the low threshold of a real and substantial chance of obtaining these additional revenues. Alternatively, they invite the Court to treat the loss of a chance as a separate head of loss and to approach the matter on the basis that the Defendants' breach has caused McLaren to sustain this head of loss.
Finally, and alternatively, McLaren seek monies in the sum of US$1,103,452, representing their wasted expenditure in light of the Defendants' breach. That sum consists of: (a) US$400,000, representing the sign-on bonus paid to Mr Palou on 9 January 2023; and (b) US$703,452, representing the costs arising from his participation in F1-related opportunities under his agreements with McLaren. In the further alternative, McLaren claim the sum of US$400,000 as unjust enrichment.
The Defendants' case (again in outline)
The Defendants' case is that, whilst it is accepted that, in telling McLaren on 8 August 2023 that Mr Palou intended to remain with CGR and would no longer perform his obligations under the AP Agreements, they are liable for breach of contract, nonetheless the claim now advanced is vastly inflated, with McLaren seeking to lay at the Defendants' door "a series of remote, speculative and unevidenced losses" which were not caused by the Defendants' breach. Furthermore, in circumstances where McLaren have not given appropriate credit for savings or benefits that they are now enjoying by reason of the breach.
Taking McLaren's claims in the order set out above, as to the driver salary losses, the Defendants say that they are not liable for the losses said to flow from McLaren Indy's dealings with its Car #5 driver, Mr O'Ward, in circumstances where he was a well-established driver, who would have had sufficient leverage to negotiate an increased salary in exchange for agreeing to drive for an extended term in any event. They say also that they are not liable for the sums paid by McLaren Indy to its Car #7 driver as from 2025, Mr Lundgaard, given that McLaren Indy would have hired Mr Lundgaard (or another paid driver on an equivalent salary) to drive Car #7 in any event. The Defendants nonetheless accept that, in principle, McLaren could recover damages reflecting any losses that they have suffered by reason of incurring the additional costs of hiring alternative drivers for Car #6, but contend that there is in this respect no relevant loss because such costs are more than outweighed by the payments which were made by Mr Siegel's father, amounting to US$[REDACTED] million.
As to the NTT base fee loss that is claimed by McLaren, the Defendants deny that the breaches of the AP Agreements were the factual cause of McLaren's renegotiation of its sponsorship deal with NTT. This was not, as Mr de Marco KC (on the Defendants' behalf) put it, McLaren "acting in subservience to an unhappy sponsor holding all the cards" but, instead, McLaren "seeking to re-cut a deal with a sponsor which it knew wanted to move over into F1 due to a change in its top leadership". In any event, the Defendants say, if any part of the base fee reduction was caused by the breaches, then, McLaren have not properly quantified the base fee loss, alternatively any losses flowing from the renegotiation of the NTT sponsorship deal are too remote as to be recoverable from the Defendants in circumstances where drivers are otherwise not typically named as conditions to sponsorship deals, Mr Palou was not made a contractual condition of the NTT deal and Mr Palou was not otherwise informed at the time of contracting that he was a de facto contractual condition of the NTT deal. Lastly, the Defendants maintain that McLaren acted unreasonably in giving away its valuable contractual rights to a higher base fee from NTT and so that the Defendants should not be liable for the same.
As to the GM Agreement alleged losses, the Defendants' position (at least by the time of closing) is that, whilst they accept that GM would have paid McLaren US$500,000 in team support payments in respect of 2024 in the counterfactual, nonetheless the Defendants should not be liable for what is claimed because, had McLaren Indy taken reasonable steps to mitigate this loss, then it could have recruited an alternative A level driver for the 2024 IndyCar Series.
Turning to the other sponsorship losses, the Defendants deny that Mr Palou's breaches caused McLaren to suffer additional losses of profit from sponsorship deals. They say, in particular, that McLaren cannot identify any other actual or prospective sponsor whose conduct is alleged to have changed as a result of the breach. On the contrary, the Defendants say, the evidence shows that: (i) McLaren successfully sold all primary sponsor inventory for Car #6 for the 2024 IndyCar Series; (ii) to the extent that any Car #6 inventory remained unsold, that was not because McLaren had lost Mr Palou but rather because its own past sales strategy had left it with a rump of undesirable non-primary slots which it was then unable to package up and sell with the more desirable slots; and (iii) sponsorship revenues continued to increase over the relevant period.
As for the NTT F1 opportunity losses claimed, the Defendants say that, in assessing whether McLaren (strictly speaking, McLaren Racing) have suffered any loss of profit, credit should be given both for the US$1,537,800 in fees actually payable by NTT under NTT Amendment 2 and the US$1,068,917 of fees received by McLaren Racing under an agreement concluded with Toyota by Mr Ryo Hirakawa (the 'Hirakawa Agreement') under which Mr Hirakawa was given the opportunity to take Mr Palou's seat in a 'Testing Previous Car' ('TPC') event which took place on 12 October 2023. They also say that the claim should be dismissed because it is clear, on the evidence, that McLaren Racing suffered no such loss, specifically that McLaren Racing has not been prevented from selling the relevant rights for more than the US$1,537,800 in fees that NTT has agreed to pay for them. Alternatively, the Defendants maintain, any such loss has been mitigated by the fees actually received by McLaren Racing under NTT Amendment 2 and/or the Hirakawa Agreement. In the alternative, the Defendants object to this claim on the same causation, remoteness, and failure to mitigate grounds advanced in respect of the NTT base fee loss claim.
As to the loss of performance-based revenues, the Defendants' case is that they are not liable for any such losses since there was no real, rather than speculative, chance that Mr Palou would have performed as well upon moving teams from CGR as he did when he chose to stay at CGR.
In relation to the wasted expenditure (signing-on bonus and TPC costs) claim, the Defendants' position is that this is not a valid claim because McLaren would not have recouped these costs in the counterfactual since McLaren Racing would never have promoted Mr Palou to its F1 team and so there would have been no revenue stream from which it could have recouped this expenditure. Secondly and in any event, this expenditure was not wasted, the Defendants contend, given that McLaren Racing got what it expected to get, namely an F1 reserve driver from October 2022 to August 2023 and an opportunity to assess his potential in an F1 car. Thirdly, the Defendants say that any such claim is reduced to zero by reason of the US$3.5 million which McLaren Racing has received (or will receive) under the Hirakawa Agreement.
Lastly, as to the (alternative) unjust enrichment claim concerning the signing-on bonus, the Defendants submit that this cannot succeed in circumstances where Mr Palou was paid the US$400,000 bonus pursuant to an express contractual obligation, which provided that the bonus was payable upon him signing the AP Driving Agreement and the bonus was not made conditional upon any degree of future performance.
The witnesses and other evidential matters
Before coming on to address the issues that arise, it is convenient at this juncture to say something about the witness evidence that was before the Court at trial - together with certain submissions which were advanced concerning the absence of other witness evidence and McLaren's approach to document retention.
I do not propose to take up too much time dealing with the parties' respective observations as to their own witnesses (both factual and expert) and, more particularly, their criticisms of the witnesses (both factual and expert) called by the opposition. Suffice it to say that, in general terms, I do not accept that one side's witnesses were better than the other side's, although, as will appear, it is the case that some of the witnesses gave evidence which caused me to be somewhat circumspect.
I start, however, with some initial observations. First, as Mr Goulding KC reminded me, when making findings of fact, the Court will have regard to the entirety of the evidence where witness evidence is involved: see Onassis & Calogeropoulos v Vergottis [1968] 2 Lloyd's Rep 403 per Lord Pearce at page 431. In doing so, the Court will have regard to motives and overall probabilities: see Armagas Ltd v Mundogas SA (The Ocean Frost) [1985] 1 Lloyd's Rep 1 per Lord Goff at page 57.
Secondly, in assessing credibility, the Courts have regularly recognised the potential fallibility of human memory, including what Leggatt J (as he then was) had to say in the oft-cited Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm), which the Court of Appeal in Kogan v Martin [2020] EMLR 4, at [88], explained was not intended to lay down "any general principle for the assessment of evidence". Rather, the decision is "one of a line of distinguished judicial observations that emphasise the fallibility of human memory and the need to assess witness evidence in its proper place alongside contemporaneous documents and evidence upon which undoubted or probable reliance can be placed". In a similar vein, in Natwest Markets Plc v Bilta (UK) Ltd [2021] EWCA Civ 680 the Court of Appeal recognised, at [50]-[51], that the approach in Gestmin may not be open to the Judge or will be of limited assistance, in circumstances, for example, where there "may simply be no, or no relevant, contemporaneous documents, and even if there are, the documents themselves may be ambivalent or otherwise insufficiently helpful". What the Court needs to do is to have regard to other considerations including "the overall plausibility of the evidence; the consistency or inconsistency of the behaviour of the witnesses and other individuals with the witness's versions of events; supporting or adverse inferences to be drawn from other documents; and the judge's assessment of the witness's credibility, including his or her impression of how they performed in the witness box, especially when their version of events was challenged in cross-examination". Furthermore, the Court must be "alive to the dangers of honest but mistaken reconstruction of events, and factors in the passage of time ...".
Thirdly, when assessing the credibility of a witness, as recognised by Lewison J (as he then was) in Painter v Hutchison [2007] EWHC 758 (Ch), at [3], evasive or argumentative evidence, straining the meaning of plain words, self-contradiction, the making of speeches instead of answering questions and a changing position upon cross-examination are all factors that go to credibility.
Fourthly, this last aspect applies to both factual witnesses and expert witness alike. As made clear in National Justice Compania Naviera SA v Prudential Assurance Co (the Ikarian Reefer) [1993] 2 Lloyd's Rep 68, expert evidence should be, and be seen to be, the independent product of the expert and uninfluenced in form or content by the demands of litigation. Expert witnesses should provide objective, unbiased evidence on matters within their expertise, and should disclose any potential conflict of interest. An expert should avoid taking the role of an advocate, should explain the facts or assumptions on which their opinion is based and should make clear where an issue falls outside the scope of any expertise or where there is insufficient data available.
Turning, against this background, to the factual witnesses, McLaren called six factual witnesses, the first of whom was Ms Laura Bowden, who is McLaren's Chief Financial Officer and is, as such, responsible for McLaren's finance, procurement and project management teams, as well as IT. Mr de Marco sought to criticise Ms Bowden's evidence, suggesting that it formed "part of a broader picture" in which McLaren have "sought at all times to inflate [their] claimed losses as high as possible without regard to the truth". Mr de Marco, in particular, criticised what Ms Bowden had to say concerning rate cards (relevant to the other sponsorship losses claim addressed later), suggesting that much of the evidence which she gave in her witness statements as to rate cards turned out to be incorrect and contradicted by the documents. Mr de Marco also suggested that insofar as Ms Bowden gave evidence on McLaren's NTT losses, GM agreement losses and/or driver salary losses, she had no personal knowledge of the relevant factual matters underpinning those claims since what she had to say was based upon what Mr Brown had told her.
I do not accept these criticisms. On the contrary, I regarded Ms Bowden as a straightforward witness. As to the rate cards in particular, she was clear that these are not documents prepared by her and that she was not involved in their creation. There was nothing misleading about this. Specifically, when it was put to Ms Bowden that her first witness statement was misleading as regards the existence of a contemporaneous rate card, Ms Bowden explained that she understood the position to be correct when she made the statement, albeit that she was not the owner of the relevant document. It was also suggested to Ms Bowden that she had applied misleading highlighting to her witness statement in an attempt to show that the primary sponsor slots on Car #6 had been sold for the 2024 series. Ms Bowden rejected this suggestion, and she was right to do so since it later became clear that the highlighting derived from the underlying documents so that Ms Bowden did not do what she was accused of doing.
The next witness was Mr David Croxville. He is the former Executive Vice President and CFO at NTT. He was the main point of contact at NTT in respect of the NTT Agreement and its amendment following Mr Palou's breach. As such, he gave evidence as to NTT's position in the negotiation and renegotiations of its sponsorship deals with McLaren Indy in 2022 and 2023 (prior to his departure from the business).
It was Mr de Marco's submission that the Court should treat Mr Croxville's evidence with care given that he had not sought NTT's consent to give evidence and in circumstances where he suggested that NTT was extremely sensitive to involvement in these proceedings. Mr de Marco went further: he submitted that Mr Croxville was willing to provide less than truthful evidence, even where the documents contradicted his account, citing Mr Croxville's insistence that NTT had never discussed moving its sponsorship across to McLaren prior to 15 July 2022 (being the date when NTT became contractually able to negotiate with other teams), in circumstances where he nonetheless accepted that there had been around two years of meetings between NTT and Mr Brown.
Again, I reject this criticism. I found Mr Croxville to be a witness who had no axe to grind; indeed, it was apparent from what he had to say that he had real respect and affection for Mr Palou, on occasion messaging him to congratulate him on his wins. He was an honest and straightforward witness, with no axe to grind in the proceedings.
As for Mr Brown, Mr de Marco went on to criticise him in no uncertain terms. As previously mentioned, Mr Brown is McLaren's Chief Executive Officer, having previously been a former professional racing driver and the founder of Just Marketing Inc, which he ran for 20 years before selling the company to Chime Communications Ltd, one of the world's largest sports marketing agencies, where Mr Brown continued to work for another three years. He is a person, in short, with very considerable experience, being described, indeed, by the Defendants' IndyCar expert, Mr Brian Marks, as somebody who "wrote the book on sponsorship" and who "wrote the book on commercial partnerships and there's many [sic].... that look up to him to this day".
Mr de Marco nonetheless submitted that the Court should not accept Mr Brown's evidence unless it is clearly supported by contemporaneous documentation. Mr de Marco described Mr Brown as a combative witness, who was willing to give evidence which was untrue or inconsistent in order to answer the point being put to him. This included, Mr de Marco suggested, Mr Brown's insistence that McLaren Indy did not know that Mr Palou was not free to negotiate with other teams at the time that he signed the March 2022 McLaren Agreement and the October 2022 AP Driving Agreement, did not know that CGR had a unilateral option to extend Mr Palou's contract for the 2023 Series and was not asked to indemnify Mr Palou in the event that he was sued by CGR. That evidence, Mr de Marco observed, is implausible, given that, as part of the negotiations leading up to the March 2022 Agreement, Mr Palou's management team planned to seek an indemnity from McLaren in the event that he was sued by CGR "for breaking the contract" and, in the event, McLaren ultimately did cover Mr Palou's legal expenses in relation to the August 2022 mediation which arose out of the March 2022 Agreement. The obvious inference, Mr de Marco suggested, is that they asked for an indemnity and McLaren Indy agreed to provide it, knowing that there was some kind of legal risk involved with Mr Palou signing to its team.
That Mr Brown was keen, and able, to stand his ground was clear. He is, after all, a competitor. However, in my view, Mr Brown was straightforward enough. He accepted, for example, as Mr Goulding pointed out, that McLaren Indy is not one of the two teams that has historically dominated in the IndyCar Series, that CGR has better cars and a better backroom team and, indeed, that this could be important to the outcome of a race. Mr Brown also had no difficulty in acknowledging that there are limits to his knowledge and expertise. It is fair to say, as I point out later, that Mr Brown did, on occasion, adopt a somewhat opportunistic stance in some of the evidence that he gave, however, overall, I am clear that he did not set out to give evidence that was untrue, on the contrary, I formed the impression that he was generally doing his best to assist the Court in what he had to say in evidence.
Mr Matt Dennington has been the Co-Chief Commercial Officer of McLaren Racing since March 2024. He started his career as a professional cricketer but has been employed by McLaren for approximately 8 years. He has particular responsibility for current business, including engagement with McLaren's top strategic partners. He was a straightforward witness; indeed, Mr de Marco did not suggest otherwise. That said, Mr de Marco was right to note in closing that Mr Dennington did not have direct knowledge of some of the aspects on which he gave evidence. This includes the discussions between NTT and McLaren Indy prior to July 2022, the initial discussions between NTT and McLaren Indy immediately after Mr Palou's breach, NTT's views on McLaren Indy's decision to hire various drivers (including Mr Siegel) for Car #6 and the reasons for McLaren Indy's decision to hire Mr Siegel.
Mr Benito dos Santos is the Head of Brand Marketing at the Arrow McLaren team, having been appointed to that position in January 2025. He oversees the livery approval process. He gave evidence addressing the circumstances in which Mr Siegel came to be approved by IndyCar to drive Car #6 in the 2025 Sonsio Grand Prix, where the car carried the so-called 'VELO' branding of RJV. Mr dos Santos was undoubtedly doing his best to assist the Court in giving the evidence that he did. However, it is the case that he was unaware of the provision in the IndyCar rulebook which confers IndyCar LLC with the power to withhold its approval for such designs. Whilst not fatal to what he had to say, this was nonetheless somewhat surprising.
The last factual witness to give evidence on McLaren's behalf was Ms Valerie Mras, who is the Director and President of RJV, where she has worked for 17 years. She has been responsible since February 2024 for the marketing and commercialisation of RJV's vapor products, including the VUSE brand. She was described by Mr Goulding in closing as having "appeared for and on behalf of RJV, and therefore in a corporate capacity". As such, he submitted, it was not right that she was asked by Mr de Marco in cross-examination about her personal views as to whether, for example, RJV would place branding on a tennis racquet. I do not agree with this, however, since the questions that she was being asked were quite properly directed at ascertaining what position she (and so RJV) would have taken had it been appreciated that somebody under the age of 21 was engaged in sporting activity which RJV sponsored. In response, Ms Mras revealed two things.
The first was that she had limited personal knowledge of the matters about which she was called to give evidence, notwithstanding the position that she holds and her own evidence that she works "closely with colleagues who are directly involved in promoting that product" and that she has "visibility of the promotional activities" for VELO, as a result of her role in the marketing leadership team, alongside the operational team that supports McLaren sponsorship.
This is a matter to which I return when dealing with the Siegel issue: as I there explain, although I do not consider Ms Mras to have been necessarily the most appropriate witness called by McLaren on that issue, it needs to be appreciated that McLaren had only limited time within which to prepare their case in response to something of a repackaging undertaken by the Defendants only at the start of the trial. In addition, although Ms Mras had only limited knowledge of the matters about which she was called to give evidence, nonetheless she did have relevant overall responsibility within RJV, and so was able to explain what RJV's position was at a high level and in a general (yet still relevant) sense.
The second thing revealed by Ms Mras's evidence was that she was not prepared to engage with the questions other than through what Mr de Marco described "as an executive who had committed to memory a series of vetted and approved corporate soundbites". Examples of this approach include this exchange:
"Q. So you're very careful to take steps to avoid being seen to target young people.
A. I can say our responsible marketing framework has an intended audience of 25-plus consumers.
Q. Not people under the age of 21, obviously.
A. Our marketing materials are intended for a 25-plus audience."
Another example was her refusal to engage, at least in any meaningful way, when Mr de Marco put to her that there is sensitivity around tobacco and nicotine companies using athletes in their marketing, that there is an obvious association between driver and car in IndyCar and that this sensitivity would be heightened if that individual were under the age of 21. This resulted in the following exchange:
"Q. In that paragraph 12, you sort of summarise what some of these steps are, and you say the first is never to leverage athletes in your advertising. So, as I understand it, you try and avoid using any athletes or other celebrities in your marketing regardless of their age; is that right?
A. That is correct, we do not feature any celebrities, athletes, influencers or famous people in any of our marketing materials.
Q. And that's because you understand the sensitivity about that?
A. That is because that is our internal practice associated with any brand that we have within our portfolio.
Q. Yes, but because you understand the sensitivity, using a sportsperson or a celebrity or an influencer might encourage young people to follow; that's why you do it, I suppose, isn't it?
A. Once you use many of these individuals, the content is out in the realm and you leverage their network. We want to refrain from having any association to the celebrities or famous people or athletes themselves, therefore do not feature any of them in any of our marketing materials.
...
Q. But would you agree with me it would be even worse to use a 19-year-old?
A. I believe that's a completely hypothetical situation, in which we would -- a question of age would never come in because it would never be something we would consider in our marketing materials."
As I shall come on to explain when addressing the Siegel issue, ultimately it probably does not matter that Ms Mras adopted this approach to Mr de Marco's questions given the other points that arise in the context of the Siegel issue. However, all in all, I was unimpressed by Ms Mras's approach when giving her evidence. I consider that Mr de Marco was right when he submitted that her primary motivation was to avoid saying anything which might be used as a basis for findings about what RJV, IndyCar or the FDA may or may not do vis-à-vis RJV's sponsorship activities.
The first of the Defendants' witnesses was Mr Palou. As previously mentioned, he is considered to be a generational talent - possibly even what is known as the 'G.O.A.T' or 'greatest of all time'. On any view, he is highly successful as a driver and is currently the top IndyCar driver, having won the IndyCar Championship four times (in 2021, 2023, 2024, and 2025) and having in May 2025 also won the prestigious Indy500 race. In the wake of the latter, Mr Palou was described, variously, as "unbelievable" (by Mr O'Ward), as "the best driver ... unbelievable" and "one of the greats" (by Mr Ganassi), as "a legend in IndyCar" (by Mr Fernando Alonso, two-time F1 Drivers' Championship winner) and as one of "the all-time greats" (by Mr Will Buxton, a British motorsport journalist, commentator and presenter who is currently the lead commentator for Fox Sports). Fellow driver, Mr Kyle Kirkwood, noted, indeed, that viewers were "witnessing greatness in action" and that "second this year is like winning the championship". Other commentators have described Mr Palou's driving ability as "not just impressive" but a "'make-the-other-drivers-reconsider-their-careers' kind of dominance" (in an article entitled "Alex Palou is Unstoppable: Here's How He's Making History"), and Mr Brown described Mr Palou in his witness statement as "the most complete and best driver in IndyCar in this era", something with which Mr Ganassi apparently agrees since he was quoted in an article in USA Today Sports entitled "How IndyCar's Alex Palou became the most dominant driver of 2025" as saying that the sport is seeing "history made right now" and that Mr Palou's "name has to be among and certainly in the conversation of the great drivers ... in the conversation of the greatest".
It was Mr Goulding's submission that nonetheless, as a witness, Mr Palou was at times evasive and apparently unwilling to answer straightforward questions - as well as heavily prepared. One example, Mr Goulding suggested, was Mr Palou repeatedly refusing to recognise the importance of a driver to the overall performance of a car in IndyCar, insisting that a "good driver cannot outweigh a bad car", which is a phrase that is repeated in almost the exact same formulation in the witness statement made by Mr Michael Hull. When asked to explain the position, Mr Palou's response was that he and Mr Hull "want to say the same thing". Mr Goulding also criticised Mr Palou for seeking to blame Mr Brown for his failure to break into F1. Mr Palou said, more than once, that he had been misled by Mr Brown who had broken promises he allegedly made to Mr Palou about his prospects of driving in F1. Mr Goulding submitted that this is unfounded and also inconsistent with Mr Palou's admission of liability for breach of contract together with the absence of any defence or counterclaim alleging misrepresentation.
I reject these criticisms. I found Mr Palou to be an honest and engaging witness in much the same way as I found Mr Brown also to be. The fact that, like Mr Brown, he has an interest in the outcome of the proceedings does not justify a conclusion that he was less than straightforward any more than it does in relation to Mr Brown. Both are used to winning, that much is clear, but it does not follow from this that either of them sought to mislead in the evidence that they gave. As to Mr Palou's F1 ambitions and what joining McLaren would mean in relation to those ambitions, Mr Palou accepted that neither of the agreements he signed with McLaren obliged McLaren to promote him to F1. His point was that Mr Brown sought to persuade him that he retained a realistic prospect of promotion to F1 even after Mr Oscar Piastri was signed for the 2023 season (including by reassuring him that the decision to recruit Mr Piastri was a decision taken by the F1 Team Principal and not him personally), and it seems to me that this is probably what Mr Brown did, indeed, do. The extent to which it happened is probably a matter of impression, however. In short, it is understandable that Mr Palou and Mr Brown might have different (yet entirely honest) views as to which of them thought what concerning Mr Palou's F1 dream.
The other factual witness called by the Defendants was Mr Hull, CGR's Managing Director, who gave evidence from CGR's perspective in relation to the team's decision to sign Mr Palou and its considerations when hiring racing drivers. Again, Mr Goulding suggested that Mr Hull had been heavily prepared to give the evidence that he did, although he acknowledged that Mr Hull "was, in many respects, a somewhat refreshing witness", citing by way of example the fact that he accepted that his role is race-focused and that, as such, his involvement in the business side (and so with sponsors) is "very small"; indeed, he explained that he had "never read a sponsorship contract in the... 33 years" that he had worked at CGR. Indeed, in closing Mr de Marco himself acknowledged that Mr Hull's evidence was of little relevance to the issues at hand since Mr Hull does not have specialist knowledge about sponsorship.
Mr Goulding noted in this respect, however, that in his witness statement Mr Hull dealt with sponsorship-type issues, explaining that he had been "involved in some negotiations for CGR regarding sponsorship arrangements", that he is CGR's "relationship person for sponsors" and that he has "had involvement with sponsors since [he] joined CGR in 1992". Mr Goulding fairly recognised that Mr Hull made it clear in the same witness statement that he is "not involved in the details which are handled by more junior staff members", but pointed out that nonetheless Mr Hull went on to state that in his experience "it is not typical for contracts between IndyCar teams and sponsors to specify the identity of drivers" and "it is not typical for contracts with sponsors to set out the minimum standards for CGR's drivers". There is, therefore, some force in the submission made by Mr Goulding that Mr Hull's witness statement might have been somewhat inaccurate or overstated in places.
As for the expert witnesses, the first discipline involved evidence from forensic accountants: Mr Steve Harris instructed by McLaren; and Mr Luke Steadman instructed by the Defendants. Whilst Mr Goulding submitted that Mr Harris was "a conspicuously fair and straightforward witness", Mr de Marco submitted that he "would often slip into advocacy", and whilst Mr de Marco submitted that Mr Steadman "gave careful and thorough forensic accounting evidence", Mr Goulding submitted that he "clearly sought to act as an advocate for [the Defendants'] case".
Mr de Marco highlighted in this context the fact that, when confronted with Ms Bowden's evidence that McLaren Indy "would have been thinking about Alex in the car" when preparing rate cards which were used to price multi-year deals in 2022, Mr Harris attempted, as Mr de Marco put it, to give his own spin on the facts by implying that Ms Bowden must be wrong because Mr Palou would not be factored into the rate cards at the relevant time. He also criticised Mr Harris for failing to scrutinise relevant evidence. For example, in relation to the alleged F1 opportunity losses, Mr de Marco submitted that Mr Harris simply adopted the values asserted in McLaren's witness evidence, leaving it to Mr Steadman to raise the need to consider the underlying documents which resulted in Mr Harris, then, revising his position and accepting that in many cases there had, in fact, been no loss suffered by McLaren. In my view, however, the fact that Mr Harris reacted in the way that he did to Mr Steadman's work reflects well on him since he frankly accepted when asked in cross-examination about this that the "problem with my first report is that I didn't think properly and clearly about the opportunity loss issue that Mr Steadman raises" and that "Mr Steadman thought through the Formula 1 loss issues more carefully and did more work in his report than I did, and I think in respect of Formula 1, Mr Steadman raises good points". He explained that his failure to assess the F1 losses on the basis that he did for the purposes of his first report came about because McLaren had provided him with "next to nothing, if not nothing" in terms of documentary evidence.
Whilst it might be right that, as Mr de Marco suggested, he ought to have asked for adequate financial documentary evidence so as to enable him properly to assess McLaren's alleged losses, it does not follow that he should be regarded as unreliable in the manner suggested by Mr de Marco. On the contrary, I am clear that Mr Harris understood his duties to the Court and did his best to provide independent expert evidence on matters that were within his expertise. As seen by what he had to say concerning the F1-related claim, he was willing to make appropriate concessions, and the suggestion that he was overly reliant on the evidence given by Mr Brown and Mr Dennington is unjustified since, as an expert, it was appropriate that he should do so provided that, as he did, it was made clear that what he had to say by way of opinion was based on the assumption that that factual evidence would be accepted by the Court.
In contrast, although Mr de Marco maintained that Mr Steadman did not act as an advocate, unfortunately I formed the impression that that is, indeed, what, at least on occasion, he did. A prominent example of this was highlighted by Mr Goulding in closing. This related to Mr Palou's evidence, given in examination-in-chief and not trailed in his witness statement, that he would, if necessary, have sat out the 2027 season and sought to obtain a seat in F1. Mr Steadman accepted that this was a matter for the factual evidence and not, therefore, for him as an expert. However, rather than leaving matters there and despite (like Mr Harris) having been asked in their respective instructions to prepare calculations that included an assessment of losses for 2027, Mr Steadman asserted that it was "counterintuitive" that Mr Palou would have driven for McLaren in 2027. Mr Steadman also in his reports gave his view on the likely driver line-up in the counterfactual, although he had accepted in the joint report (and, indeed, when giving his oral evidence) that this was not within his expertise. Challenged about this, Mr Steadman explained that he was merely pointing out documents that might undermine the assumptions in Mr Harris' evidence, but, as Mr Goulding pointed out, his evidence went well beyond this. Furthermore, it emerged during cross-examination that there was, as Mr Goulding described it in closing, "a very concerning overlap" between the evidence of Mr Steadman and Mr Marks, the Defendants' IndyCar expert. This involved Mr Steadman explaining, when pressed on the topic, that he independently alighted on precisely the same documents relevant to the driver line-up in the counterfactual issue and, having done so, independently presented them in almost exactly the same way as Mr Marks had done in his report - a draft of which Mr Steadman had seen when preparing his own report. This was evidence which was unimpressive, and the fact that it came from an expert witness who owes a duty to act independently was all the more surprising.
More generally and more than with any other witness (factual or expert), with the possible exception of Ms Mras, Mr Steadman's evidence was characterised by a repeated inability or unwillingness to answer questions, which necessitated my sometimes having to put the relevant question myself and even then not always with success. An example is Mr Steadman's evidence in his reports that the opportunity for Mr Siegel to drive in 2024 was "decisive" in relation to his decision to drive for Arrow McLaren, meaning that without that opportunity Mr Siegel would not have driven in the counterfactual. When pressed, he suggested that, in fact, his position was that Mr Siegel "may not have joined for 2025", yet refused to accept that this meant that the availability of 2024 driving could not, therefore, have been "decisive". Again, this was unimpressive; it was also disappointing.
The second area in which expert evidence was given concerned the IndyCar business. Here, I am again in no doubt that McLaren's expert, Mr Julian Jakobi, was a better expert than the expert called by the Defendants, Mr Marks.
Mr Jakobi was vastly more experienced an expert than Mr Marks. Mr Jakobi trained as a chartered accountant. However, after that he has enjoyed a long and distinguished career in sports and management. After working at IMG for 15 years, in 1995, he established his own company, Stellar Management Group, to manage the commercial affairs of leading sportsmen and women, and clients in IndyCar and F1. In 2010, he formed GP Sports Management, his current company, representing a range of F1 and IndyCar Series drivers, including various winners of the Indy500 and IndyCar Series Drivers' Championship.
Mr Marks, on the other hand, had rather more limited relevant experience. Although he suggested in his first report that he had 35 years working in motorsports, in fact, his experience over that time period is of working in the combined fields of motorsports and the consumer package goods industry but most of the time in the latter rather than the former. His experience is also different in scale to that of Mr Jakobi, characterised by Mr Goulding in closing "as small fry" in comparison. Mr Marks is an enthusiastic motorsports devotee and knowledgeable, but his expertise is at a different (and lower) level when set against that of Mr Jakobi.
There is also the point that Mr Marks was at one stage employed by McLaren, albeit only briefly, since his employment came to an end, in May 2020, after only six months. Mr Marks explained, when asked about this in cross-examination, that Mr Sam Schmidt (then an owner of McLaren Indy) had decided to terminate his contract because of financial challenges caused by the COVID pandemic. That may very well have been the case, but it is also relevant for present purposes that it was Mr Brown's evidence that Mr Marks did not bring one deal to McLaren and even Mr Marks accepted that he brought only one. This, again, underlines Mr Marks's relative lack of experience in relation to IndyCar racing.
In addition, like Mr Steadman and although I am in no doubt that, as Mr de Marco submitted, Mr Marks was honest in the evidence that he gave, Mr Marks nonetheless sometimes assumed the role of an advocate. In contrast, I did not have that impression in relation to Mr Jakobi, who gave his evidence in a straightforward way. As Mr Goulding observed in closing and despite Mr de Marco's criticisms concerning a fourth report submitted by Mr Jakobi shortly before he came to give evidence at trial, Mr Jakobi explained in that fourth report that he did not have any relevant or up to date knowledge of tobacco or nicotine sponsorship in the IndyCar Series and was therefore unable to speak to that issue. He also fairly accepted that Mr Marks had more experience in sponsorship whereas he himself had more experience of drivers, although he made the point that he had considerable experience of sponsorship through his work with drivers. Mr de Marco suggested that the reason why the fourth report was prepared was different: that those instructing Mr Jakobi were unhappy with certain statements which he had made in the joint expert report concerning RJV sponsoring a car driven by a driver under the age of 21. Having listened carefully to Mr Jakobi give evidence, I am clear, however, that what he had to say in the fourth report was, at least as far as he was concerned, not put before the Court for that reason but because he wanted the Court to know what his experience actually is.
In contrast, Mr Marks seemed a little too keen not only that the Court should think that his experience is greater than it really is, but also to put forward certain views which were, in truth, in the nature of arguments rather than matters for an expert. Thus, as Mr Goulding pointed out, in addition to his reports, Mr Marks provided two witness statements in support of an application by the Defendants to amend their statement of case and, furthermore, like Mr Steadman, he strayed into territory concerning the driver line-up in the counterfactual issue in a manner which went beyond what was appropriate for an expert, describing his view as being the "only reasonable conclusion that can be drawn" even though it was a view that was at odds with the factual evidence which had been given.
I had the impression also that in Mr Marks's case his reports were, as Mr Goulding put it, heavily lawyered. A clear example of this concerns the references to particular US law provisions in his third report concerned with the Siegel issue and RJV's sponsorship. Mr Marks only reluctantly conceded, when pressed, that he had "taken some instruction" from Mishcon de Reya on these aspects - itself a somewhat strange use of language for an independent expert to adopt.
Expert evidence was lastly given by F1 experts (Ms Claire Williams on behalf of McLaren, and Mr Otmar Szafnauer on behalf of the Defendants), both of whom I found to be impressive and appropriately independent.
Ms Williams has spent her whole life in F1, including working at Williams, then a family run team, from 2002. Ms Williams originally worked in the communications team, before moving to take up the role of Commercial and Marketing Director in 2010. In 2013, she took over the running of the team and its Advanced Engineering business. She left Williams in 2020, when her family sold the team and is now brand ambassador and Chair of Motorsport for Fortescue Zero: a green technology business working towards net zero. Ms Williams was made an OBE in 2016, in large part in recognition of her services to motorsports and charitable work. I agree with Mr Goulding when he submitted in closing that she was a genuinely independent expert: thoughtful, considered, and measured.
Although Mr Goulding questioned his impartiality (and so independence), pointing to what he characterised as repeated (and very public) 'bust ups' with Mr Brown, Mr Szafnauer was no less impressive than Ms Williams. It was clear, in particular, from what he had to say in cross-examination that he holds no grudges against Mr Brown personally. As he explained, any comments made between them in their capacities as F1 team principals were simply part of motorsport: each team principal will do what they need to do to advance their team's interests, including "us[ing] the media to our respective advantage". As he put it: "It is what happens in the sport ... It is part of what we do". Indeed, in answer to a question from me, before they enter press conferences, "we have a nice chat before we sit down and actually perform in front of the cameras".
There are two further matters which I should mention at this stage, before coming on to address the issues.
The first concerns a submission made by Mr de Marco concerning the fact that McLaren did not call as a witness Mr Gavin Ward, who was the Team Principal at Arrow McLaren until November 2024. This, in circumstances where Mr Ward was apparently able and willing to give evidence and only refused to do so because he felt bound by certain confidentiality obligations to McLaren contained within his severance agreement. This, in circumstances also where it is clear that Mr Ward had met with Morgan Lewis, McLaren's solicitors, in the immediate lead-up to the trial.
As to this, where it is alleged that the Court has not heard evidence from relevant witnesses and/or that not all relevant documents are before the Court, a party may invite the Court to draw adverse inferences: see Royal Mail Group Ltd v Efobi [2021] 1 WLR 3863, in which Lord Leggatt JSC said this at [41]:
"So far as possible, tribunals should be free to draw, or decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole. All these matters are inter-related and how these and any other relevant considerations should be assessed cannot be encapsulated in a set of legal rules".
The reasons for not calling a witness are significant. For example, in Credit Suisse Virtuoso Sicav-Sif v Softbank Group Corp [2025] EWHC 2631 (Ch), at [308], Miles J (as he then was) declined to draw an adverse inference from a party's failure to call a former employee who was alleged to have relevant knowledge of a trading decision, on the basis that he "is no longer employed by Credit Suisse and there is no reason to expect Credit Suisse to call him". In LLC EuroChem North-West-2 v Societe Generale SA [2025] EWHC 1938 (Comm), Bright J declined to draw an inference from a party's failure to call a witness with knowledge in relation to a specific relevant issue where there is, as he put it at [363], "a limit to the number of overlapping witnesses any party can be expected to call" and the Court could assume the missing witness' evidence would corroborate that presented by those who were called from the same organisation.
It was Mr de Marco's submission that Mr Ward had relevant evidence to give, as demonstrated by the fact that the Defendants (through Mishcon de Reya) were able to obtain certain documents held by him through an application made in the US, in particular documents which reveal, as I shall come on to explain, McLaren's auto-deletion policy as far as WhatsApp communication is concerned. It is clear also, Mr de Marco submitted, that Mr Ward was heavily involved in the decision-making regarding the recruitment of the driver for Car #6 in the summer of 2024 and had relevant evidence to give concerning the Siegel issue. Specifically, Mr Ward attended meetings with Mr Siegel's manager, Mr Charles Crews whereas Mr Brown did not do so, and it was Mr Ward who spoke to Mr Crews in March 2024, May 2024, and early June 2024 about the different options which were on the table for Mr Siegel. As such, Mr de Marco observed, he would have been best placed to speak to the importance of the mid-season 2024 opportunity to the negotiations which ensued.
I reject these submissions and decline the invitation made by Mr de Marco that I should draw adverse inferences from the fact that Mr Ward was not called by McLaren as a witness in these proceedings. It is clear that Mr Brown was able to give evidence on the matters that he addressed and that, had he been called as a witness by McLaren, Mr Ward would have largely been asked to cover similar terrain to that covered by Mr Brown, somebody to whom it is clear that Mr Ward answered in his role as McLaren's Chief Executive Officer and somebody whom it is perfectly clear made the decisions as to who was to drive for McLaren. This is an instance, in short, similar to that described by Bright J in EuroChem: Mr Brown was clearly not only able, but also best qualified, to give the evidence that he did in relation to the issues in this case; there was no need, in such circumstances, for Mr Ward to give evidence also.
This is my view notwithstanding the last issue which needs to be addressed as to evidential matters, namely the previously mentioned deletion policy which was employed by McLaren concerning WhatsApp messages - a policy described by Mr de Marco as "a troubling internal policy which encourages the taking of steps to avoid adverse documents coming to light within the context of litigation".
