20/09/2010
NEWS STORY
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Whilst F1 is still trying to get to grips with the legality of team orders following the World Council's ruling about them earlier this month, a newspaper report has shed light on why teams may be keen for the FIA to clear of any confusion and make them completely legal. The reason isn't because the ban is vague or because it is hard to police but instead it concerns the ever so slightly more serious issue of the legal liability of team directors.
Writing in the Independent newspaper, Pitpass' business editor Chris Sylt quotes a leading motorsport lawyer who ominously warns that the directors of F1 teams risk being sued by shareholders over team orders. Jonathan Lux, head of the motorsport group at the law firm Ince & Co says that directors of a company running a team which is penalised for issuing team orders could be in breach of the 2006 UK Companies Act.
The 2006 Act was implemented in October last year and it introduced a statutory statement of directors' duties including the obligation to promote the success of the company and to exercise reasonable care, skill and diligence. Lux says that if a team is penalised for team orders "the directors could be accused of failing to exercise reasonable care, skill and diligence."
He adds that "disgruntled shareholders might challenge the directors with responsibility for running the team and sponsors might start to look for escape clauses in their contracts with teams attracting adverse publicity for team orders."
With a risk of legal action hanging over their heads it would be no surprise if team bosses wanted the FIA to legalise team orders simply to clarify the situation. Shareholders are most likely to sue if the punishment given for issuing team orders outweighs the benefit they bring. Although the World Council did not give Ferrari any additional punishment to the fine imposed by the stewards in Germany for Massa allowing Alonso to overtake him, there is a real risk of punishment since team orders are banned by the sporting regulations.
Making matters even more confusing, the World Council ruled that "there were many examples of what could have been said to be team orders in Formula 1 in recent years, and therefore there has been inconsistency in its application. Also its application to indirect team orders via messages where drivers raise no complaints is uncertain and difficult to detect and police."
Ultimately, the World Council was swayed in Ferrari's favour concluding that the team "had a legitimate concern to avoid collisions between team mates in close on track racing." Ferrari's case was strengthened by Williams and Sauber providing support by writing to the FIA to point out the risks that come from team-mates colliding when fighting for position.
Whilst there is no suggestion whatsoever that either Williams or Sauber has used team orders, as it is a UK company, the former team has to abide by the Companies Act and so if any of its directors were to ever breach it in future, they could face litigation. In contrast, since it is an Italian company, Ferrari's directors would not run the risk of the litigation which Lux warns of. Nevertheless, since 8 of F1's 12 teams are based in the UK, the possibility of litigation under the Companies Act remains a risk for the majority of the grid. It will stay that way until the FIA does the only sensible thing and removes the ban.