The claim seeks to recover commission payments shared between landlords and their insurance brokers without leaseholders’ knowledge. These commissions are included within the insurance premiums for buildings and terrorism insurance. These commissions are paid for by leaseholders, and wrapped up inside the service charges that you have been paying.
Since the late 1990s, large landlords and brokers have added these commissions on to insurance premiums. In a 2023 report, the Financial Conduct Authority found that commissions ranged between 10% and as much as 60%.
The Financial Conduct Authority also found that most insurance brokers could not justify the level of the commissions charged for the amount of work done in relation to the insurance.
In most cases, insurance brokers have assisted landlords in a breach of trust by including excessive commissions in the insurance premium. Landlords and brokers were not entitled to receive these profits from leaseholder funds without leaseholders’ prior informed consent to the charges.
In the rare cases where landlords have disclosed these commissions, the disclosure has been only after the fact. In most cases the disclosure is partial or inaccurate.
You are likely to have been affected if you: (i) live in a flat you own (with or without a mortgage), (ii) pay for insurance via your service charge (or make a separate payment to your landlord or your landlord's broker) and, (iii) that your building is not owned or managed by the people who live in it. If these three criteria apply to you, you may be eligible to join the claim.
In some buildings where leaseholders are in charge of management, it may be that they still do not control the placement of insurance.
What if there is a Resident Management Company or Right To Manage Company for my building? click here
Velitor Law is proud to support this claim on behalf of leaseholders against landlords and insurance brokers.
For more information, visit their website here.
If the claim succeeds, leaseholders could receive between £1,500 and £3,500 each in compensation.
The precise amount will depend on the sort of building you live in, how long you have lived there, the extent of the secret commissions, whether we can claim interest and the period for which we are able to claim.
See the sign-up page here.
Typically claims such as this take several years. The length of the claim will depend on the type of defence put up by landlords and insurance brokers, but we estimate it will take 3 – 5 years to bring your case to conclusion.
See the sign-up page here.
The claim is on a “no win, no fee” basis. You will not need to pay any money as the claim progresses. If the claim succeeds then legal fees and expenses will be deducted from your compensation. If the claim does not succeed then you will not need to pay anything, unless you leave the claim early. You do not need to leave the claim if you sell your flat.
If you engage Velitor Law through the sign-up page, subject to eligibility screening, Velitor Law will act for you and pursue your claims on a ‘No Win-No Fee’ basis. This means that if the claim is successful, Velitor will deduct a maximum fee of (i) 40% (plus VAT) of the compensation you receive and (ii) up to £120 for other expenses (together, the “Fee”). The percentage payment represents Velitor’s fees and counsel (barrister) fees for the work undertaken in acting for you and sharing the financial risk in pursuing the claim on your behalf.
The £100 payment will go to cover expenses such as the insurance premium for After The Event insurance, expert fees and court fees. The payment is £100 if the claim succeeds between 2024 and 2026, £110 if the claim succeeds between 2026 and 2028 and £120 if the claim succeeds in 2029 or later. You will only pay one additional fee. The additional payment will never be more than £120 however long the case lasts.
If the claim is unsuccessful, you will not have to pay anything. If there is not enough compensation to pay the Fee then you will not have to pay any shortfall.
If the claim succeeds, the Fee will be deducted from your damages. However, please note that the usual rule is that the landlords and brokers will have to pay a contribution towards costs. Any costs recovered from the landlords and insurance brokers will be used to reduce the Fee that you will pay.
To give an example, if the case succeeds in 2029 and your damages are £1,500 and we recover £200 in costs then your fee would be £640 (48% x £1,500 less £200 plus £120). You would then receive £860.
The actual amount you receive will depend on where your building is, the level of the insurance premium, how long we are able to claim for and how your landlord and broker have behaved.
Yes, but we will need further information from you.
Please provide this here.
We can sign most people up without any paperwork based only on their address.
If you have sold your flat, or we cannot match your address to a landlord, we may need further information. We will write to you separately to obtain that information.
See the sign-up page here.
Unfortunately not. The Financial Ombudsman cannot help leaseholders with claims against insurers or insurance brokers for this type of insurance. The leaseholders are not regarded as the policy holder. And landlords will usually be beyond the reach of the Financial Ombudsman.
See the sign-up page here.
You may be able to claim for the period of your ownership from 1997 to date. We will ask you questions about this when you sign up.
See the sign-up page here.
Yes, provided you have permission you can claim on behalf of a dead relative or someone who lacks mental capacity, for example if they have given you a power of attorney. We will ask you for details of this when you sign up.
See the sign-up page here.
Yes, you can claim for any flat subject to this type of insurance arrangement from 1997 to date.
See the sign-up page here.
No. Your flat must be in England or Wales.
Yes. The owners of flats in England or Wales can join the claim wherever they live in the world.
See the sign-up page here.
Yes, you will need to complete a separate sign-up for each property.
See the sign-up page here.
We mean a freeholder or head lessor. We may also be able to help leaseholders in buildings with Right To Manage companies or Resident Management Companies (see final faq for more information).
If you live in a flat and bought it with or without a mortgage then you are probably a leaseholder and someone who can join the claim.
No, in most cases our sign-up process can identify your landlord from your address.
In some cases we will need further information. We will contact you separately to obtain that information.
No, we will obtain this information from target landlords on your behalf.
To keep costs down we will only pursue landlords and brokers who are capable of paying significant damages. This means we will only be pursuing selected landlords. We will review your building and let you know whether we can progress your claim.
If your landlord is not among the ones we have already identified as a potential target, then we will keep your details on file. If enough people sign-up to make a claim economic, we may then pursue your landlord and its broker.
This claim is about buildings insurance for blocks of flats. All blocks of flats will have buildings insurance for the external walls, internal corridors and fixtures and fittings, such as lifts. Many buildings will also have terrorism cover. Both types of insurance cover are usually arranged by the landlord of the building. The cost is paid by leaseholders through the service charge. We are making a claim in respect of both kinds of insurance.
Put simply, because that is how the legal and other costs related to the action will be recovered. This structure enables the leaseholders to access justice in the High Court using a team of solicitors, barristers and expert witnesses that many would otherwise be unable to access. This structure also removes any need for the participating leaseholders to pay costs as the case proceeds and covers the risk of paying the defendants’ costs if the case does not succeed.
Please note that the fee of 40% of damages (plus VAT) is the maximum that will be payable and only if the claim is successful. This fees will be deducted from your compensation. If there is not enough compensation to pay the fees then you will not have to pay the difference.
In addition to the 40% (plus VAT) fee, Velitor will deduct a further payment from your compensation if the claim succeeds. This payment will cover costs like the premium for After The Event insurance, expert fees and other expenses.
If the claim succeeds between 2024 and 2026 this additional payment is £100. If the claim succeeds between 2024 and 2028 then the additional payment is £110. If the claim succeeds in 2029 or later than the additional payment is £120. You will only pay one of these additional payments. The additional payment will never be more than £120 however long the case lasts. This additional payment will be deducted from your compensation only if the claim succeeds.
If the claim succeeds, the usual rule is that the landlords and brokers will pay a contribution toward the costs. This contribution will be used to reduce the fee. If the claim succeeds and costs are recovered then the actual fee charged will be lower than the maximum fee. If the claim is unsuccessful, you will not have to pay anything
We consider that both elements of the fee are fair, reasonable and commensurate with the risk taken by the funder, solicitors and counsel (barristers). This is because:
(i) The market fee for cases of this nature is between 30% and 50%. Our maximum fee of 40% (plus VAT) is within this usual range of fees for this type of case.
(ii) The funder is bearing all of the costs of the case and will only recover those costs if the claim succeeds. The funder may have to pay costs for a period of 3 to 5 years or more. If the claim does not succeed then the funder will be significantly out of pocket because it will not recover those costs. The fees also cover the adverse costs indemnity to cover the defendants’ costs if the claim fails.
(iii) Solicitors and counsel (barristers) are also working at discounted rates. Their discount will only be recovered if the claim succeeds. The legal team has also spent nearly two years using its own resources to develop the case and to secure and negotiate the funding. That cost will only be recovered if the claim succeeds.
In some leases there may be a provision that may entitle the landlord to recover certain legal costs from leaseholders via the service charge.
We are aware of this risk. We will take steps to prevent landlords from charging their costs as the case progresses. If necessary, we will obtain an order to prevent landlords from charging costs to leaseholders.
The bad behaviour of landlords in disputes with leaseholders has led to a law being passed to prevent this. Section 62 of the Leasehold and Freehold Reform Act 2024 will prevent landlords from charging litigation costs to leaseholders without first obtaining an order from a court or tribunal. This provision is not yet effective. The government recently said it would bring the Leasehold and Freehold Reform Act into effect as soon as possible.
Yes, subject to two conditions:
The first condition is that your Resident Management Company or Right to Manage Company must be required to buy insurance arranged by a freeholder or head lessor without any choice.
The second condition is that a director of the Resident Management Company or Right To Manage Company signs up on behalf of the company.
If both conditions are met, everyone in the building will become a part of the claim. If you’re not sure, please register and we can assess if you are eligible to join the claim.
Please also approach the directors of your Right to Manage or Resident Management Company and ask them to confirm the insurance position.
In some cases a Right To Manage company will have taken control over buildings insurance. In that case we may be able to help the individual leaseholders who paid insurance before the Right To Manage Company took over. In that type of case every leaseholder will need to sign-up individually.
Unfortunately, we cannot help Resident Management Companies or Right To Manage companies who control the placement of their own insurance.
We may be able to help Resident Management Companies or Right To Manage who control their insurance today but did not control their insurance in the past. Please contact info@leaseholderaction.com for more information.