McLaren Awarded More Than $12 Million in Damages After Court Fight With Former Driver
A court awarded McLaren over $12 million in its lawsuit against its ex-Formula 1 test driver and four-time IndyCar champion Alex Palou. McLaren Racing and Arrow McLaren had been seeking more than $20 million in damages for breach of contract.
McLaren signed Palou to serve as a test driver in late 2022. He breached his contract to join McLaren’s IndyCar team and continue as their Formula 1 test and reserve driver in 2023.
Palou openly admitted that he breached his contract with McLaren to re-sign with Chip Ganassi Racing in IndyCar. He claimed that McLaren misled him about his F1 prospects. When he realized that, he reneged on his deal with McLaren.
He now must pay McLaren $10,194,844 in guaranteed payments. The court has yet to decide a further sponsor claim, worth up to $2.5 million. When that is resolved, it could bring the total damages to $12.6 million. Palou does have the option of appealing the ruling, however.
Alex Palou and Chip Ganassi issue statements about the McLaren court decision
Despite the loss in court, Alex Palou, the 2021, 2023, 2024, and 2025 IndyCar champion, felt pleased.
“The court’s decision shows the claims against me were completely overblown,” he said in a statement. “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.”
Chip Ganassi backed Palou after the court’s decision, saying the driver has his full support.
“We know the character of our driver and the strength of our team, and nothing changes that,” RacingNews365 reports he said. “While we respect the legal process, our focus is exactly where it should be: on racing, on winning, and on doing what this organisation has always done best, competing at the highest level.
“We’re locked in on chasing another IndyCar championship and defending our 2025 Indianapolis 500 victory. That’s where our energy is, and that’s where Alex’s focus is, on the track, doing what he does best: winning.”
McLaren and its CEO Zak Brown sent mixed messages in their statements following the ruling
Meanwhile, McLaren CEO Zak Brown also seemed quite happy with the court’s decision.
“This is an entirely appropriate result for McLaren Racing,” Brown said, according to RACER. “As the ruling shows, we clearly demonstrated that we fulfilled every single contractual obligation towards Alex and fully honored what had been agreed. We thank the court for recognizing the very significant commercial impact and disruption our business suffered as a result of Alex’s breach of contract with the team.”
McLaren Racing, on the other hand, didn’t sound like it had finished with the matter.
McLaren wrote that the multi-million dollar award will “compensate the business for the commercial loss and disruption” the team suffered.
The race team added that, in addition to the damages, they will be seeking interest and reimbursement of legal expenses. This will be done at a future hearing.
