Legal misstep costs General Motors millions, as Holden court battle continues

The lead plaintiff in the class action against General Motors has agreed to a settlement with the car maker, while other dealerships continue to fight for compensation following the closure of the Holden car brand in Australia.

A handful of dealerships across the country allege General Motors had failed to live up to agreements by shutting down the Holden brand in 2020, forming a class action against the US car giant.

But in a recent turn, Drive understands Beecham Holden in Caboolture and General Motors reached a settlement of more than $2 million – approximately triple the original offer from GM.

As part of the settlement to Beecham Holden, GM also offered to pay the plaintiffs’ costs up to July 2023 – which includes all members of the class action – and which Drive understands to amount to approximately $1.5 million in legal fees.

Official documents reveal the settlement offer was accepted in full by Beecham Holden, represented by law firm HWL Ebsworth.

However, following the acceptance, lawyers from Norton Rose Fulbright, representing GM, then attempted to make the details of the settlement confidential.

At the same time, GM’s counsel also argued it had only sought to cover the legal fees of Beecham Holden – which would have amounted to tens of thousands of dollars – and not the costs of all plaintiffs involved in the class action.

According to court documents, both changes to the offer were firmly rejected by the presiding judge.

“[General Motors] is a sophisticated and well-resourced litigant, represented by a major firm as well as senior and junior counsel,” Justice Matthews wrote in her judgement.

“The Court should not conclude that the wording of the Offer was in error or … was inadvertent. To the contrary, the Offer to pay the plaintiff’s costs of the proceeding was quite deliberate.”

While Beecham Holden accepted the offer – which was approximately three times the original offer from GM – the other plaintiffs are understood to be continuing the trial, having now had their legal fees paid by the car giant.

“The settlement reached with Beecham Holden reflects the specific aspects and circumstances of the lead plaintiff,” a spokesperson for GM told Drive.

“This settlement has been made without admission of liability and GM will defend vigorously the entirety of the claims made by the remaining group members.

“The proceedings will determine whether those group members are rewarded the amount they claim, lesser amounts, or nothing at all. GM maintains offers made to dealers were fair and reasonable,” the spokesperson said.

Meanwhile, General Motors has continued to defend its own formula for calculating compensation offers to dealerships.

With financial analysis conducted by international firm PricewaterhouseCoopers, GM offered all Holden dealerships compensation calculated from its formula, which included financial investment from the dealerships as well as special circumstances.

“Significant time and effort has been put into the compensation formula and [General Motors] has used actual financial information provided by dealers over several years to produce a fair and reasonable compensation offer,” the company originally told a Senate inquiry in 2020.

While many dealerships agreed to the compensation, it’s understood 13 dealerships declined the offer, with 11 taking legal action against the car maker.

The settlement with Beecham Holden comes after a NSW Supreme Court ruled in July 2023 the managing director of Alto Holden and HSV in Sydney, Anthony Altomonte, was entitled to see internal strategic documents from General Motors.

Counsel representing Mr Altomonte claimed GM had planned to shut down Holden from as early as 2015, despite reassuring dealerships it was committed to the brand in 2017.

Beecham Holden did not respond to a request to comment from Drive.