You don’t have to be the world’s most avid viewer of Top Gear (or whatever Clarkson-fronted vehicle Amazon eventually produces) to be aware that cars are big business. And it should come as no surprise that plenty of lawyers like their motors. If you want proof, just walk around the car park at Temple to see barristers’ Porsches and personalised number plates galore.
You’re a lucky lawyer, though, if you get to mix your passion for all things auto with your work, so Damen Bennion has hit the jackpot.
“For me it was a dream job and now I’m doing it,” says the Goodman Derrick partner, who joined the firm’s collector cars practice in late 2015.
Goodman Derrick’s team – which, following Bennion’s arrival, numbers two – is specialist, to say the least. Of course, there are firms with transport law departments and road traffic accident claims are a staple of the high street, but Goodman Derrick is unusual in that it works in the collector cars space – that is, the sort of vehicles Aston Martin, Ferrari, Lamborghini and Porsche might make.
“People are faking cars left, right and centre – Ferraris and Porsches particularly”
“Then there are all those iconic cars that people might have had on their bedroom walls as teenagers,” adds Bennion, “as well all the obvious classic cars from the 50s, 60s and 70s – the James Bond Aston Martins and so on. And pre-war cars too.”
A major part of Goodman Derrick’s work is transactional: essentially, the buying and selling of cars.
“You could be advising a number of different types of parties,” says Bennion. “It could be an individual, an auction house, a dealer or an agent, especially when the value of the car is high.”
The team is also asked to advise on the import, registration and taxation issues connected with the buying and selling of cars.
Life can be as fast-paced as in any area of law you care to mention.
“Buyers often want to move really quickly – ‘I want to buy it and I want to buy it now, before someone else beats me to it’,” says Bennion.
And while niche it is by no means obscure: buyers are often famous names and big sales feature in the newspapers.
So what is a common problem that might occur?
“Title is one of the most important aspects of these transactions,” says Bennion. “If you were buying a house in the UK and spending £5m you wouldn’t shake someone’s hand and then transfer £5m into their bank account. You’d go and instruct your lawyer and get them involved. Your lawyer would investigate title, making sure you’re getting what you’re paying for and have a proper contract in place to document the transaction.”
In the world of cars? Not so much.
“It’s not unusual to find a car has been sold twice to different people,” says Michael Grenfell, a partner at Wilmots and one of the few other lawyers to specialise in the area.
A recent case involving a McLaren F1, for example, saw an unscrupulous entrepreneur taking advantage of a naive collector. Detective work to chart ownership history can be required.
“In one case I had to travel all over California as a kind of Sherlock Holmes, seeing dealers incognito,” Grenfell recalls.
With the market becoming more lucrative there’s another problem: fakes.
“People are faking cars left, right and centre – Ferraris and Porsches particularly,” says Grenfell. “It’s relatively easy to take a perfectly ordinary Porsche and convert it to look like one with a racing history.”
Classic cars with ‘matching numbers’ – where the chassis and the engine have identical original production numbers – are more valuable, but if they do not match it is easy enough to file one number off and stamp another in its place. Several high-profile cases have gone to the High Court, often arising out of ownership or authenticity issues (see below).
According to Grenfell, bad restoration is another area where litigation can ensue.
“I had one case recently where a client paid £200,000 to a restorer for a job,” he says. “They took his money, spent it and in the end the car was still a bare chassis.”
Then there are auction disputes relating to whether someone has the right to sell a car – or sometimes people simply not paying up.
Roads straight and winding
How do you get into such a niche area of law?
Unsurprisingly, an interest in cars can usually be found in the background. Grenfell got his first car at the age of 12, while Bennion went to race meetings as a boy before buying and restoring cars, competing in concourse competitions and doing track days.
Their career histories are quite different, however. Grenfell came to law quite late, having spent four years at Unilever.
“I had offers from City firms but I didn’t want to get diverted into commercial work,” he says. “When I was at Unilever they made 150 managers redundant and I never wanted to have that happen to me. I wanted a job where I could be my own boss.”
So a small firm it was. Grenfell joined Gloucestershire’s Wilmots and has been there ever since.
His car practice grew through word of mouth.
“I was learning to fly and the sort of people who are interested in planes are also interested in cars,” he says. “I made one or two business contracts and started to act on a couple of disputes relating to classic cars. My name started to get mentioned as someone who knew what he was talking about and it snowballed from there.”
Bennion’s journey had more twists and turns. He started his career at small Midlands firm Fishers before working his way up to Wragge & Co (now Gowling WLG) in Birmingham, then Clifford Chance in London. At that point he was a standard City corporate lawyer – there was no indication where he would end up.
“Clifford Chance was fascinating,” Bennion recalls. “I was working on the biggest, most exciting transactions. But I suppose I worked too hard so I started thinking about where I wanted my career to go.”
“I ended up meeting some of the world’s biggest billionaires, and looking at and driving their cars”
He moved to the in-house legal team at logistics company Excel, then came more in-house roles at Sainsbury’s and John Lewis. Love or hate the soppy John Lewis commercials that now unofficially mark the start of the Christmas season, Bennion was the solicitor behind them.
It is an unusual lawyer who moves back into a private practice after a decade in-house, but that is what Bennion did. His interest in and involvement with cars away from work saw him approached by Simon Draper, who set up Virgin with Richard Branson, to write a book with him on Aston Martins.
“I ended up meeting some of the world’s biggest billionaires, and looking at and driving their cars – my network in the car world grew and grew,” he recalls.
That eventually brought him into the same circles as Martin Emmison, who had a niche car practice at Goodman Derrick. They got on well and Bennion joined him at the firm.
Keys to success
What does it take to be successful in such a specialised area?
“You need to be a good commercial lawyer so you can document the deal easily and quickly while enabling your client to understand the issues,” says Bennion.
Second, it is a practice area where strong client care skills are vital: this is a market full of wealthy people used to getting what they want. The importance of tact and soft skills cannot be underestimated.
Finally, says Bennion, “when dealing with this kind of car it’s essential to have a thorough understanding of the vehicles involved and the market. Your market knowledge has to be credible; for some clients if it wasn’t I don’t think you’d get the work.”
“Clients can spot a solicitor who doesn’t know what he’s talking about in an instant,” agrees Grenfell. “I’ve advertised in the past for people to join my practice, but just taking on an ordinary solicitor is not the right way to do it.
“I’ve seen people who are interested in joining a classic car practice because they think it’s glamorous and fun, which it is, but they have to have a genuine interest in the subject-matter too.”
Overtaking other asset classes
In the summer of 2014 a Ferrari 250 GTO sold for $38m (£27m). It was the highest price ever paid for a car at auction. The Knight Frank luxury goods index shows that collector cars have outperformed every other asset class in the past 10 years. Collector cars have grown in value terms by nearly 450 per cent in a decade.
“What’s interesting is that as the value of collector cars has grown it’s not just individuals transacting,” Bennion says. “There’s interesting work going on right now where clients are looking at the possibility of setting up car funds.”
At the moment the main collector cars markets are Europe and the UK, the US and East Asia. The question of whether China will relax regulation in terms of classic cars is up in the air.
“The ability to sell a classic car into China is pretty non-existent,” says Bennion. “But it’s only a matter of time before collector cars can be readily sold in China and that will mean an even bigger market for a limited number of cars.
“And that will drive values even higher.”
Brewer v Mann: a case of ‘Trigger’s broom’
Viewers of Only Fools and Horses may remember that street-sweeper Trigger’s broom had had 17 new heads and 14 new handles. The question of how much of an object has to be replaced before it ceases to be the ‘real thing’ was the subject of a long-running court case relating to a classic car.
In 2007 an UK-based American lawyer ironically named Mercedes Brewer bought a 1930 Bentley Speed Six from a specialist dealer. She paid £425,000 for the car under the impression it was one of only 177 ever made.
A year later, struggling to make the payments, she decided to sell but on taking it for valuation was astonished to find that it was only worth £300,000. The only original Speed Six part of the car was the front of the chassis. The engine was one of lesser power than the original, reconstructed to give the appearance of a Speed Six.
What is reality?
Brewer sued the seller, Stanley Mann Racing Ltd, accusing them of selling her a fake. In the High Court Judge Anthony Thornton QC agreed, saying the car had been so heavily modified it was “no longer capable of being accurately described as a 1930 Bentley Speed Six”.
Brewer was awarded £94,000 in damages but Stanley Mann eventually triumphed at the Court of Appeal. Lords Justice Rix, Sullivan and Lewison ruled that advertising the car as ‘a 1930 Bentley Speed Six’ was no guarantee that it consisted of all the original parts.
“A Bentley Speed Six would, as it seems to us, be a Bentley Speed Six even if it had spent the whole of its life mouldering in a Maharajah’s garage, and disintegrating there into dilapidation, before being rebuilt,” the judges stated.
A trainee’s view
I have always been interested in the automotive world – from a young age I was an avid reader of Motor Sport. I would flick through the back pages making wishlists having attended a day’s club racing at Snetterton, my local circuit, as a child. This circuit soon became a regular haunt of mine, and was where I became a trackside photographer before obtaining a racing licence myself.
The collector cars practice at Goodman Derrick was a compelling feature in my decision to apply to the firm for a training contract, so I was delighted to be offered the chance to sit with the team for half my corporate seat.
I have experienced a wide variety of the practice’s work although I am still in the early days of my seat. I have been involved in matters ranging from the retrieval of missing invaluable original car parts to the creation of a heritage trust for one of Britain’s most innovative and prestigious manufacturers.
While high-value and often international transactions make up the core of the department’s activities the practice also undertakes wider contractual work for those in the automotive service industry. As such, I have been involved in drafting terms and conditions for one of Europe’s most renowned classic car specialists to use in inspection agreements. I have also been involved in post-transactional work such as lease arrangements over a collection of historic racing cars, and when acting for individual collectors there are also elements of private client law to consider, such as estate planning.
I very much look forward to developing my knowledge of this niche area of legal practice.
Alasdair McKenzie is a trainee at Goodman Derrick