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Home›Force Majeure›Williams fine shows F1 cost cap arbitration in action

Williams fine shows F1 cost cap arbitration in action

By Merry Smith
June 8, 2022
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Formula 1’s governing body, the FIA, has announced an “accepted breach agreement” between itself and the Williams team following a self-confessed breach by the latter.

The Grove-based team has committed a so-called ‘procedural breach’ regarding its financial reporting for the 2021 first season of F1’s cost cap.

Williams, like all the other teams, was due to submit its full reports for last year by March 31 this year – but, according to the FIA, “voluntarily disclosed” it would be in breach in advance.

The Cost Cap Administration formally told her that she had committed a procedural violation on April 12, accepting it shortly after while “explaining the steps she had taken to try to avoid this violation. “.

Voluntary disclosure of the breach and Williams’ full cooperation – which are cited as examples of mitigating factors in Sections 8.16(a) and 8.16(d) respectively – prompted the ACC to offer Williams to enter into a so-called Agreed Breach Agreement (ABA) .

The agreement stipulated that Williams would pay $25,000 to the FIA, cover costs incurred in preparing the agreement and remedy the breach itself by May 31. The FIA ​​document confirms that Williams has met these requirements.

Although this particular case concerns a breach of procedure, ABA is also prescribed by regulation as a potential tool to deal with “minor expenses” – in which case the cost cap is only exceeded by 5% of its total.

This could very well happen in 2022 as several F1 teams believe they are close to breaching the current cap of $141m – and have been pushing for a force majeure increase due to high rates. high inflation.

Beyond a financial penalty, the CCA may also include “minor athletic penalties” in violation agreements – but not point deductions, which are only available as a metric to the Cost Cap Adjudication Panel ( a panel of independent judges) that the CCA may refer cases to.

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