Everyone was expecting a long and frantic legal battle for the services of F1 genius Adrian Newey, but the Ford-owned Jaguar team decided to settle the issue amicably. Karl Ludvigsen explains Ford's decision not to fight and the consequences it could have in the future of the sport.

Fireworks exploded - and not just in the night sky - as Rothschilds, rock chicks and royalty gathered for a charity fashion fest at England's Waddesdon Manor on Monday, June 11th. Built by the Rothschild banking family in the 1870s, Waddesdon was designed by French architect Gabriel-Hippolyte Destailleur, who used 19th Century brick and stone cladding to create a stunning Renaissance style chateau. The massive building project took 15 years to complete, with results that are breathtaking both externally and internally. The interior boasts fine collections of Sevres porcelain and important works of art by old masters of the Dutch school, Gainsborough and Reynolds.

Swanning about the house and grounds were the great and near-great, including Prince Charles and Camilla Parker Bowles among such celebrities as Rupert Everett, Kate Moss, Elton John, Sting and his wife Trudi Styler. Australian singer-actress Kylie Minogue partnered Prince Charles for dinner, while Camilla got Oscar de la Renta and Jacob Rothschild. The Italian contingent included Donatella Versace (with best friend Naomi Campbell), Giorgio Armani and Valentino.

Circulating among the guests as well was Wolfgang Reitzle, boss of Ford's Premier Automotive Group (PAG), which includes Jaguar and Volvo among other makes. Jaguar was one of the sponsors of the knees-up at Waddesdon on behalf of a cancer charity. Meanwhile, elsewhere in southern England lawyers for Jaguar and the PAG's Premier Performance Division were preparing their case for the High Court in London 36 hours later on Wednesday, June 13th, over the issue of the contract that Adrian Newey - according to the firmest possible representations by the Jaguar Racing people - had signed to join the leaping-cat team before the end of 2002.

You may remember that when the affair blew up I wrote a column about the feisty determination of Niki Lauda and my confidence that he would wipe the floor with the McLaren crowd over the Newey deal. "No single action on his part," I wrote, "will ever do more for his team than winning the battle with his old sparring partner Dennis and bringing the engineer to Jaguar. I, for one, would not want to bet against his success. There's only one question: are Jaguar and their owner Ford up to the job? Do they have the fortitude to back Lauda through what may be a nasty episode in the courts?" Now we know the answer to that question: They didn't.

There's a reason why they didn't. PAG's parent Ford is facing a barrage of lawsuits plus hearings in Washington over more than 100 deaths suffered by occupants of Explorer SUVs that have rolled over after experiencing tyre failures. Recalls and replacements of 6.5 million Firestone tyres ruptured Ford's relationship with that company and cost the Detroit automaker half a billion dollars in 2000. Ford has set aside several billion more to replace twice as many tires this year. Ford has plenty of other problems too, so much so that the cover of the latest Business Week banners "FORD - IT'S WORSE THAN YOU THINK."

I reckon that against this background Ford decided that the last thing it needed was another high-profile court case. When Wolfgang Reitzle got back to his office on London's Berkeley Square on Tuesday morning I'm sure he was met by aides who were eager to fight the Newey battle in the courts. But I'm equally sure that the word from the Ford HQ in Dearborn was that the company was not going to go to the mat for this one.

This is regrettable, because Jaguar Racing's capitulation sends a clear sign to the rest of the racing world that these newcomers to Formula One are going to be pretty easy to push around - absolutely not the image you want to project if you are trying to attract and keep top talent. What's the point of having a Niki Lauda on your side if you're not going to exploit his skills? And the quote that was issued on his behalf was pathetic: "I am glad that this matter has been concluded and it is gracious of Ron and Adrian to each offer an apology which are fully accepted by Jaguar Racing which is part of the Premier Performance Division." Yuk! Something sounding less like Lauda - no fan of corporate-speak - would be hard to imagine.

There's another angle to the Newey affair that will interest you. The collapse of Jaguar's negotiations denied the engineer's skills to a team running on Michelin tires. This was a huge victory for Bridgestone. Keeping Newey on their side in the Tire Wars had to be a top priority. And who makes the Firestone tires that Ford has blamed for the problems with its Explorer? The problems that certainly played a part in the decision of Ford and PAG to abort the attack on McLaren? Bridgestone, that's who. Go figure.