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.” The judge also described Mr Palou as “an honest and engaging witness”.
McLaren did not succeed on a claim for lost profits related to some Formula One sponsorship benefits. Mr Justice Picken halved the amount claimed for “performance-based losses” to around two million dollars (£1.5 million). After the judgment, McLaren Racing chief executive Zak Brown said: “This is an entirely appropriate result for McLaren Racing.” Mr Palou said he was considering his options, adding: “The court has dismissed in their entirety McLaren’s Formula One claims against me which once stood at almost 15 million dollars.”
