Driver safety in Formula 1®: Part 2 – How driver contracts & insurance policies help manage risks

Published 09 November 2016 By: Anthony Indaimo , Jacopo Pistone

Driver safety in Formula 1®: Part 2 – How driver contracts & insurance policies help manage risks

A number of ambitious and talented young drivers in Formula 1® are increasingly being criticised by more seasoned current and former Formula 1® champions for taking unnecessary risks. In particular, the young Max Verstappen's way of defending has been the centre of discussion for a great part of the current season, notwithstanding that he is a very talented driver. Given the new generation of drivers coming through the motor sport ranks, it is important that they and their managers remain aware that, whilst there are clearly inherent risks, those involved in managing and organising Formula 1® races have continually strived to improve driver safety.

Against this background, this two-part article examines how safety and risks are managed in Formula 1®. Part 1 (available here) looks at past driver incidents and how both the Governing body and Commercial Right Holder in Formula 1® has reacted to them. It also examines the likely consequences the recent Bianchi family legal action against various parties may have on Formula 1®, the regulator, the teams and the drivers.

Part 2 (below) moves on to examine how liability for motor sports accidents is assessed under the law of England & Wales. It highlights why assessing liability in Formula 1® racing is peculiarly different to other sports and how Formula 1® has managed the inherent risks of competing in the pinnacle of motor racing (where 1000ths of a second really do make the difference) through the adoption of "best practice" contractual terms between the team and a driver and through bespoke insurance policies. Specifically it looks at:

  • How liability for motor sports accidents is assessed under the law of England & Wales– who owes a duty of care and why liability in motor sports differs to other sports;

  • How driver contracts and insurance policies work in Formula 1® and help to manage risks;

  • Author’s concluding comments

 

How liability for motor sport accidents is assessed under the law of England & Wales

Similar legal actions to that of Bianchi’s family have occurred in other sports, whereby the courts and tribunals have been asked to hold teams, players and governing bodies accountable for injuries that have occurred to professional sportsmen. Most recently and crucial in shaping the law of negligence in sport was the Court of Appeal judgement in Caldwell v Maguire and Fitzgerald1

In that case, Judge LJ set out the five key points that need to be examined in order to determine liability in sport cases. The third point is of particular interest to motorsport, as it determines that the prevailing circumstances to be taken into account for the avoidance of injury

"should include the sport's objectives, the demands it makes upon contestants, its inherent dangers, its rules, conventions and customs and the standards, skill and judgement that may be reasonably expected of a participant"2

Although there are various cases under English law that have seen successful actions in other sports with risks attached such as, amongst sports, Rugby3, Football4 and Boxing5, we believe that motorsport is, and is likely to be treated, as a different category. Accordingly, the Caldwell case now assists a Judge in determining whether a particular act was acceptable, and expected by those who participate in the sport at that level with particular attention to the standards, skills and judgement of the participants (i.e. the teams and the drivers). 

The principle that a track owner and the national sporting authority, responsible for granting the licence, must ensure that a race track is safe was established in the case of Wattleworth v Goodwood Road Racing Company Ltd and others6 and follows the general principle that they owe a duty of care to certain third parties. The case involved the fatality of a young driver who crashed during a track day charitable event and whose family commenced legal proceedings seeking damages against the track owner (Goodwood), the national sporting authority (Motor Sport Association) and the FIA who had inspected the track before the event. On the facts of that case, the Judge found that Goodwood and Motor Sport Association did not breach their duty of care as they were able to show that they took a reasonable amount of care in all the circumstances ensure that the driver would have been reasonably safe. Interestingly, the court found that the FIA did not owe the driver a duty of care.

 

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Anthony Indaimo

Anthony Indaimo

Anthony focuses on cross-border corporate, commercial and corporate finance transactions involving the acquisition and disposal of businesses and shares for both private and public companies, joint ventures and capital raising with a particular emphasis on the sports, technology and brands sectors, especially those involving the US, UK, Italy and Asia Pacific.

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Jacopo Pistone

Jacopo Pistone

Jacopo is a trainee in Withers' Corporate practice. He advises on share sales and purchases, joint ventures and a broad range of commercial agreements, with a particular emphasis on luxury brands. Jacopo is a supporter of AC Milan and a dedicated follower of Formula 1.

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