12 Days of Christmas 2025 - Day 2

London Trocadero (2015) LLP v Picturehouse Cinemas Ltd and Ors [2025] EWHC 1247 (Ch)

On Day 2 of our 12 Days of Christmas feature, we revisit a case on insurance rents that got a lot of attention earlier this year.

The case of London Trocadero (2015) LLP v Picturehouse Cinemas Ltd and Ors [2025] hinged upon whether the contractual wording of the lease allowed the landlord to receive inflated commission from brokers and charge these cost to its tenants as part of the insurance rent charge.

Commission-sharing arrangements with the landlord and its insurance broker resulted in inflated commissions being charged to tenants, with the broker rebating a portion back to the landlord.

The tenants argued that these commissions and a 35% placement, administration and work transfer fee were not part of the “premium payable” under the lease and should not be recoverable. The landlord asserted it was entitled to recover all insurance-related costs, including commissions and fees.

The High Court found in favour of the tenant that the lease did not permit the landlord to recover broker commissions or the 35% administrative fee as part of the insurance premium, and that only the actual insurance premium paid for cover could be passed on to tenants. The landlord was ordered to reimburse the tenants for the overpaid insurance rent corresponding to the commissions and fees which was a sum of approximately GBP700,000.

Insurance rent needs to be carefully defined in the lease to ensure only sums deemed reasonable are charged back to the tenant. The model commercial lease provides that as long as premiums are ‘proper and reasonable’, a landlord may retain all insurance commissions. Landlords should ensure that leases follow market standard to not be involved in a similar situation.

If you would like more information on this case, you can take a look at the article prepared by Rob Shaw and Peter Fletcher earlier this year.

If you have managed to get this far, here is a festive joke for you to enjoy: What do you call Santa’s legal team? Clause & Effect LLP