Picturehouse Cinemas, part of the Cineworld group, has won its court case over so-called “insurance rent,” in a case that might have industry-wide implications.
The case centres on Cineworld’s flagship Picturehouse Central cinema in London’s Trocadero Centre. It leases the premises from central London landlord Criterion Group.
Picturehouse is claiming back unspecified amounts from Criterion, arguing it overpaid a decade of so-called “insurance rent” – a charge levied on a leaseholder by a freeholder to contribute towards insuring the building.
When the case went to trial in March, Picturehouse’s lawyer, Jonathan Seitler KC, said Criterion Group arranged for its insurers to charge enhanced commission on insurance which it passed on to leaseholders and “pocketed as profit”. This, Seitler said, wasn’t justified and should be paid back.
Much of this point rested on the definition of the word “premium” in the Picturehouse lease, which stipulated the tenant must make a contribution towards the freeholder’s insurance premium.
And in his ruling, handed down today, trial judge Mr Justice Richards agreed tenants would expect a landlord to profit from the premium.
“The common understanding of a typical landlord and tenant as to the meaning of ‘premium’ was a general one that did not deal with the specifics of landlord’s commission. Accordingly, it did not amount to an understanding that it was in order for a landlord to benefit from landlord’s commission at a tenant’s expense,” the judge said.
As a result, he said, “I have reached the view that commission rates on policies for the cinema from 2015/16 to 2019/20 were outside the norm.”
Picturehouse also claimed the fire sprinklers in the building were turned off in 2105 because of renovation works done by the freeholder. That led to the insurer ramping up the cost premiums and increasing the excess to more than £1m.
The judge also agreed with this point.
“I have concluded that the landlord was in breach of… the lease in relation to the sprinkler issue,” he said. “The experts were agreed that poor fire safety at the centre… increased insurance premiums charged. I agree with that opinion and find that the landlord’s breach of contract increased the insurance rent for which the tenant was liable.”
The judge didn’t rule on how much the landlords should pay back. Instead, the judgement goes into year-by-year detail of how the premiums were affected between 2015 and 2023. He said both sides should consider his ruling and work out a sum.
“I have throughout this judgment provided guidance I have throughout this judgment provided guidance as to how the quantum of the tenant’s successful claims should be determined and I leave the parties to agree the figures,” he said.
According to the ruling, the landlord’s commission over the period ranged between £48,000 and £92,000.
The judge ruled there should be another hearing within a month to cover matters arising from the ruling.
The judge dismissed a third point brought by Picturehouse relating to the excess on the policy and a counterclaim brought by the landlord.
London Trocadero (2015) LLP v Picturehouse Cinemas
Business and Property Courts (Mr Justice Richards) 23 May 2025
