Williams Grand Prix Engineering is reportedly being sued over its appointment of Mike Coughlan as their new chief engineer in the wake of the shake-up of the F1 team that saw the resignations of the team's technical director Sam Michael and chief aerodynamicist Jon Tomlinson in May.

The same reports say that Mike Coughlan is being personally sued by the management of Michael Waltrip Racing, the NASCAR team for which he has recently been working as director of vehicle design following his suspension from F1 for two years by the FIA over his role in the Ferrari/McLaren "spygate" scandal in 2007.

According to the US media reports, MWR has filed suit in US District Court in Charlotte in the Western District of North Carolina accusing Coughlan of breaching his existing contract with the NASCAR operation.

MWR says their contract with Coughlan began in October 2010 lasting for two years running through to November 30, 2012, with MWR holding a one-year option. Instead Coughlan told the team that he was leaving in April and finally departed in June, which MWR now assert was a breach of contract by Coughlan.

The suit is said to be seeking damages in excess of $75,000 for the breach plus other punitive damages as well as legal fees, alleging that Coughlan's rapid departure has affected the team's subsequent performance this season with a consequent loss of sponsorship and prize money.

The suit also names Williams F1 and accuses the team of interference with the contract.

"MWR will face and incur many certain and substantial damages, including the costs of searching for, recruiting, negotiating with, hiring and training a replacement for Coughlan," the legal complaint is reported to say. "Not to mention the expenses MWR devoted to Coughlan's employment, the benefits of which will go unrealized," it adds.

The team's two Sprint Cup series drivers, Martin Truex Jr. and David Reutimann, have both performed below expectations this season and are 23rd and 24th respectively in the championship points standings. As a result, they have little hope of making it through to the all-important and highly lucrative Chase stage of the season.

As the team's director of vehicle design, Coughlan was responsible for all design, production, engineering and quality assurance programs for MWR.

A Michael Waltrip Racing spokesman said the team itself had no comment on the lawsuit at this time, and there has also been no official response to the reports from either Williams or Coughlan.

Williams' hiring of Coughlan was controversial even when it was announced by the team in May, given Coughlan's role in the 2007 "spygate" row when he was an engineer at McLaren and found to be in possession of confidential technical data leaked to him from within the Ferrari team. Coughlan was sacked and banned from F1 for two years and had to pay 180,000 Euros in damages to Ferrari; McLaren was fined a record $100 million by the FIA and lost all its constructor's championship points for the year.

Even so, Ferrari are reported to be very unhappy that Williams have given Coughlan the opportunity to return to F1 in such a senior capacity as chief engineer for the struggling team.