The Weekly Grapevine

Laws of Destruction

A quick search through the archives of this journal shows no less than 200 references to the phrase 'high court' over the last ten years or so.

No doubt there are more instances of litigation in Formula One than merely those referenced in the archives, for possibly other terms have been applied, but, whatever, 200 is way too many, particularly when the vehicle for these actions is supposedly, even at maximum stretch of the imagination, a sport.

On the other side, there are those cynics who suggest that the number is way too low by a factor of ten or so, and that many in the paddock are fortunate not to have lost their liberty at some point in their lives, but that is a story for another day...

In a few instances the words 'high' and 'court' have been used in other than pure litigious context, but, still, the 200 or so referenced cases found make it an average of 20 usages of the terms per annum.

The FIA headquarters in Paris © LAT

Given that most court cases attract more than a simple (or single) mention in these pages, the true average boils down to about five actions (or threats thereof) per annum - many of which did not affect the sport per se, but seem to centre around various disagreements a certain trio of banks had with a Mr Bernard Charles Ecclestone and the activities of his family trust.

But, statistics never tell the whole story, and in this case it is no different, for analysing the sample entries against a timeline shows there were just two uses of 'high court' in 1997 (1 percent of the total), one the following year (0.5 percent), none in 1999 and one (0.5 percent) in 2000.

Although not listed in these archives, what little litigation as existed pre-1997 (the final year before the present Concorde, which introduced the concept of arbitration to the sport, kicked in) usually revolved around reneged commercial promises, and, in one or two instances, the activities of certain individuals whose lack of ethics cleared the way for their incarceration.

The first year of the new millennium, though, saw a massive explosion in court cases: McLaren and Jaguar each pleaded before a judge for the right to the services of Adrian Newey, Bell Helmets and Schubert fought over the right to protect Michael Schumacher's cranium, plus Pedro Diniz took on Arrows boss Tom Walkinshaw and won.

That was not all: In total, there are 20 archive entries, or 10 percent of the total, containing the selected phrase - or double the total of the previous two years combined.

Totalling the 1997 - 2001 incidences shows that the words appear in the archives just 24 times, leaving over 170 usages spread over the next six years, or around 30 per annum! Something is obviously going seriously awry in Formula One.

It had not always been thus. There was a time when differences between teams and sponsors or drivers - in whatever permutation - were sorted out by a quick word in somebody's ear, usually from BCE himself.

And, if that did not work, a million bucks (usually in the form of a loan) lubricated the issue and it was dropped post haste. And, when it did linger, it did so quietly.

Formula One operated as a sort of boys' club, and even after McLaren became the first team to appoint in-house legal counsel - Mr Tim Murnane in 1991, in the wake of the Senna/Prost wars - F1 still steered clear of judges, with the teams' lawyers being primarily occupied with driver contracts and the fine printing of sponsorship agreements and licensing deals.

So, what, then, caused this sudden escalation? Of course, the finger of suspicion falls easily on FIA President Max Mosley on the basis that he is a qualified barrister, even if the Christ Church College, Oxford and Gray's Inn graduate practised law for no more than two years before falling into motor racing more by accident than deep-rooted desire.

Thereafter the activities of his London Racing Team and the establishment of the March racing car company monopolised his time until he turned his considerable talents to the sport's administration and governance.

President of the ICA's gavel © LAT

But, an analysis of Mosley's 18 years at the helm of the FIA categorically disproves this assumption, for the suave Brit was in the president's seat for almost a decade before the litigious explosion occurred.

If anything, his transformation of the FIA's International Court of Appeal will steer the sport away from the cold halls of justice - as hoped by Tom O'Keefe's feature in last week's journal, Race to the Courthouse.

The F1-controlling banks, too, might be blamed for the escalation, but in real terms they had only brief moments of glory in the Chancery passages, and mainly accepted Ecclestone's out-of-court offers.

These could not have been too obnoxious, for the financial institutions remain in partnership with F1's tsar despite their having sold a majority share of the sport's commercial rights to CVC Partners.

However, two developments occurred at the time of the new Concorde being signed and the leasing of the sport's commercial rights to Ecclestone.

First, the internet took hold as a communications medium, enabling every Tom, Dick and Harry to become an F1 newshound; and second, corporations - be they motor manufacturers, tobacco companies or energy drink companies - became team owners, in full or in part.

The internet has, of course, granted immediate access to the latest news to all who posses a modem, thereby greatly increasing news diffusion. And nothing moves like scandal, not even sex - although that vastly accelerates the flow of information.

But, when the corporate suits arrived at the F1 party, lawyers were not far behind.

Sponsorship agreements grew both in extent and value; driver contracts went from handshake to 100-page documents (one driver, a former world champion and multiple Grand Prix winner, recently related how it took longer to read through his son's test driver contract than the kid actually spent in a Formula One cockpit).

Additionally, the GPMA coalition, which begat further factions, involved ever more lawyers as the manufacturers relied increasingly on 'opinions' (that they came from men with not an iota of racing experience or an understanding of the sport mattered not a jot...).

In turn, Formula One Management and the FIA were forced to employ increasingly larger and more prestigious law firms.

This in turn fed a legal merry-go-around, which picked up momentum with every case, with matters like the celebrated Jordan/Vodafone case and Arrows' liquidation certainly not diminishing the feeding frenzy.

Then, of course, the cost of winning - and, ergo, the price of failure - increased exponentially, leading teams to pay eye-watering sums to those who may find a split-second buried deep within the hydraulics or aerodynamics of a design.

Jean Todt, Flavio Briatore, and Ron Dennis in an FIA press conference at Interlagos this year © XPB/LAT

These folk then had to justify their stratospheric fees. What easier or quicker way to achieve same than by copying or borrowing the intellectual property of a competitor?

Thus the lines between what was and what is not (now) acceptable became increasingly blurred, with a brace of ex-Ferrari chassis engineers first feeling the long arm of the law after incorporating some 'lifted' Ferrari IP into Toyota's systems.

The subsequent criminal investigation spread across two countries and extended to five highly regarded F1 folk. Two were subsequently found guilty, whilst charges were only recently withdrawn against the rest despite the matter occurring back in 2003.

None of this deterred at least one employee at Ferrari, McLaren and Renault respectively, with two of this trio already being aware of pending high court actions in both Italy and the United Kingdom (and the third hardly looking forward eagerly to the new year), whilst Martin Brundle and the Sunday Times, too, have received writs - to answer allegations of libel in Paris.

As though that were not enough, Williams have threatened high court action against Prodrive and the FIA should customer cars be permitted in F1.

Does it stop there? No, of course not: only recently did the Contract Recognition Board - another Concordean 'legal body' - rule that Timo Glock could depart BMW for Toyota.

Meanwhile, an arbitration matter, which fundamentally resembles a user-friendly court hearing, is presently under way between Force India, the plaintiff, and Super Aguri/Toro Rosso, the defendants, in which the former claim to have been financially compromised by the latter's individual usage of IP not of their own design and/or manufacture. The results should be known early in 2008.

Thus, there have been in the recent past and at present no less than six separate legal battles being fought within F1 - more than the sport endured during the five years from 1997 to 2001 - of which four are still outstanding and one is pending. Consider: six court battles in a 17-race season...

In his piece, Tom O'Keefe suggests that the restructure of the ICA could lead to an increase in "Alternative dispute resolution" - jargon for arbitration and mediation as a substitute for litigation - but, as the foregoing shows, the alternative is already in use. So, could this restructuring result in even more arbitration?

As F1 faces its first year in over 25 without a binding Concorde Agreement, the sport could do well to resort to past practise and settle its differences out of the public eye, for, much as the spy-scandal and its sensational fall-out did its public standing no good whatsoever, so this constant litigation is wreaking equal damage.

Yes, the sport and its contestants and administrators should by all means pursue those who seek to damage it or abuse its reputation, values, regulations or systems, but at some point discretion surely is the better part of valour, or it could end with its reputation and values in tatters and its regulations and systems well and truly compromised.