Car park company NCP approached M2 Recovery in 2014 to negotiate the insurance premiums for 158 of its car parks that had been arranged by the landlord’s preferred broker.
The terms of the lease for the car park portfolio had allowed for the interests of NCP to be noted as co-insured on the landlord’s policy, and it was this that allowed for M2 Recovery to discover the secret commissions that had been paid to the landlord by the broker and ultimately recover the full amount of the commission that had been paid.
“Because NCP was named as a co-insured on the policy, the broker had a duty of care to disclose the commission arrangement it entered into with the landlord to NCP, but this never happened,” said M2 Recovery founder and managing director Neil Holloway. “This created a secret profit for the landlord, which NCP was not party to, and was therefore illegal.
“Following this disclosure, NCP had the ability to recover these payments retrospectively and secure a better deal for its insurance provisions going forward.”
M2 Recovery found that the secret commission that had been paid to the landlord had totalled £500,000 for the duration of the policy, and the lack of disclosure by the broker meant that NCP was able to recover these funds and reduce their ongoing costs of insurance.