Alex Palou’s legal team has refuted the claim that he should be held responsible for Pato O’Ward’s salary increase at Arrow McLaren IndyCar. McLaren is currently suing Palou for over $30 million in a commercial court case in the UK. The amended claim, filed by McLaren in February, accuses Palou of breaching his contract by choosing to stay with his current team, Chip Ganassi Racing, instead of joining McLaren for the 2024 season. Palou has admitted to renouncing his contractual obligations but disputes several aspects of McLaren’s claims for compensation. The reigning IndyCar champion’s legal team has made amendments to its defense in response to McLaren’s updated filing.
McLaren’s new claims include holding Palou liable for O’Ward’s $10.2 million salary increase and associated losses, such as $1.5 million due to General Motors not considering Palou’s replacement, David Malukas, an ‘A-level’ driver. Palou’s defense denies responsibility for the increase in O’Ward’s salary, highlighting that McLaren has already signed Malukas as a replacement and has not provided sufficient evidence to support its case against Palou. Palou’s defense argues that McLaren’s failure to support his future in F1 was the reason for his breach of contract and that McLaren would have needed O’Ward regardless. It also asserts that O’Ward’s contract is unrelated to the Palou dispute and that McLaren had a commercial motive to secure the best driver available. McLaren claims to have lost $1.5 million in payments from General Motors due to Palou’s replacement not being ‘A-rated,’ but Palou’s defense questions McLaren’s steps in finding an alternative driver and argues that McLaren would have been in the same position even if Palou had been promoted to F1.
In its original defense, Palou’s legal team disputed McLaren’s use of the term ‘loss of revenue’ and insisted it should be ‘loss of profit.’ McLaren changed the wording to ‘loss of profit’ in its amended filing but Palou’s lawyers note that the alleged losses have either increased or remained the same. They demand further evidence from McLaren to support these claims. McLaren also stated that it had to renegotiate its deal with sponsor NTT, resulting in a loss of $5,381,000. Palou’s lawyers have requested proof that this renegotiation was caused by Palou and that McLaren took reasonable steps to avoid it. They argue that Palou is not the main cause of the renegotiation.