Landlord required to repay hundreds of thousands of pounds of unlawfully charged insurance commissions to tenant

London Trocadero (2015) LLP v Picturehouse Cinemas Limited [2025] EWHC 1247 (Ch)

Criterion Group – the landlord of c. £4bn of property in central London – has been required by Mr Justice Richards to repay hundreds of thousands of pounds of overcharged insurance rent to one of its tenants, Picturehouse Cinemas.

Jonathan Seitler KC and Benjamin Faulkner acted for the successful tenant and were instructed by Julie Gattegno and Sally Tang at CMS.

Most commercial leases will provide for the landlord to insure the building, and then recharge the costs of insurance to its tenants as ‘insurance rent’, usually in accordance with their respective floor areas.

However, a practice has developed whereby landlords ask their insurers to pay the landlord’s brokers heavily inflated commissions, which the brokers then pass on to the landlords. The insurers commensurately increase the premium they charge the landlords, and the landlords pass to cost of that increased premium to their tenants. The result is that the insurers get the same net premium they always would, the brokers get the same remuneration they always would, but the tenants pay more for the same insurance, leaving the landlord to pocket the commission for nothing.

Criterion has engaged in this practice for years, sometimes earning commissions of 60%, and pocketing more than £1m a year, all at the expense of its tenants.

In this judgment Mr Justice Richards held that Criterion was not entitled to do so under the terms of the lease. He also held that Picturehouse was entitled to claim back insurance rent that was overpaid as a result in restitution.

This decision – although not breaking new legal ground – will be of real interest to commercial landlords and tenants, as it sheds light on a practice about which many tenants will be completely unaware. It paves the way for other tenants to enquire if their landlord has been earning commissions in such a way, and whether the terms of their lease do not permit such practices.

Read the full judgment

The Times have written an article, discussing the implications of this case, entitled ‘Landlords warned they may need to pay back insurance commission sums’, which you can read here.

Ben Faulkner has done a short video, going into it in more detail, which can be found here.