In brief
- In June 2025, we published an article on the High Court's judgment in London Trocadero v Picturehouse Cinemas, in which the court found that a landlord of commercial premises (London Trocadero) had substantially overcharged its tenant (Picturehouse Cinemas) insurance rent by building an element of commission it retained for itself into the premium payable by the tenant. The tenant's claim for repayment succeeded, with the landlord ordered to repay more than £700,000 to the tenant.
- The landlord appealed, but shortly before the appeal hearing was due to take place in June 2026, the parties reached a confidential settlement.
- The first instance decision therefore stands. It does not bind other High Court judges, but it is likely to carry significant persuasive weight in future disputes, particularly where the lease wording is similar.
What the lease said, and how the court read it
Picturehouse's lease required it to pay a proportionate share of the sum "payable [by the landlord] by way of premium for keeping the [premises] insured".
The court accepted that the premium could properly include the insurer's charge for cover, the broker's commission, and insurance premium tax. Where the dispute arose was over an additional layer of commission that the broker agreed to hand back, or rebate, to the landlord. Reading the lease as a whole, the court held that this rebated element was not truly "payable" by the landlord, since it had engineered its own repayment; and it was not "for" keeping the premises insured, since its only function was to generate a return for the landlord rather than to secure or maintain the cover. On that basis, the tenant was entitled to recover the rebated commission from the landlord as a matter of restitution.
It is worth being precise about what the case does and does not decide. The court was not saying that landlords can never receive any commission, or that all commission-sharing arrangements are improper. The outcome turned on the particular lease wording, the scale of the commission involved, and the degree of control the landlord had over how much commission was generated. Other leases are drafted differently, and other arrangements may be more modest or more clearly tied to services the landlord actually provides, such as arranging valuations or administering claims.
Two practical starting points
The case is a useful reminder that these disputes tend to turn on two separate strands of enquiry:
- The first strand is textual. Every insurance rent covenant is drafted differently, so the starting point has to be the words actually used in the lease rather than an assumption drawn from this or any other case. Some clauses tie the charge to a defined "premium"; others speak more loosely of the landlord's "cost" of insuring. Some use "payable", "paid" or "incurred", and that distinction mattered a great deal to the outcome in Trocadero. A minority of leases go further and deal with commission head-on, either ring-fencing it for the landlord or ruling it out. The service charge provisions and any separate machinery for administration or advisory fees are also worth reading alongside the insurance clause, since a landlord's true entitlement can sometimes be found there rather than in the insurance wording itself.
- The second strand is factual, and inevitably harder to get to the bottom of. It means finding out what has happened in practice: which insurer and broker were used, what the broker was paid and on what basis, and whether any part of that payment made its way back to the landlord or an associated entity. Where money has flowed back, the next question is why. A landlord may have a real answer rooted in genuine savings passed down the chain, or in work it can point to that it actually carried out. Equally, the person setting the commission rate matters: a landlord that could dial the figure up or down at will is in a very different position from one facing a rate that insurers themselves would not move on.
Neither strand answers the question on its own. It is the combination of what the lease permits and what has actually taken place that will determine whether an insurance rent charge can properly stand.
Next steps
Tenants who believe they may have been affected should review their lease wording against the points above and ask their landlord for details of how the premium and any commission have been calculated, including from service charge records. Landlords may equally wish to review their own arrangements now, while there is time to adjust them, rather than waiting for a dispute to test them. Limitation periods will already be running on any historic overpayments, so anyone considering a claim, or wanting comfort that their arrangements are sound, should not leave this too long. We would be glad to help with either a lease review or a wider assessment of an existing insurance arrangement.