London firm Manches failed in a bid to recover £570,000 in unpaid fees and interest last week when it lost a High Court action against the director of a former client.



The judge ruled that Carl Freer, a director of client company Gizmondo Europe, had not entered into a personal guarantee to pay the firm's fees - despite a clause contained in Manches' terms and conditions of business.



Mr Freer was a director of computer games company Gizmondo and a shareholder in its parent company Tiger Telematics in 2004, when he instructed Manches to provide intellectual property advice to the two companies. Both companies are now understood to be insolvent, according to the judgment.



While Mr Freer never signed Manches' terms of business, he did sign letters of engagement in which he agreed to the terms. The terms included a paragraph stating that where the client is a company, 'then the directors shall be directly liable for our fees and disbursements in the event that the company fails to pay them'.



However, Judge Price held that Mr Freer had not signed these in a personal capacity. The judge also noted that at the time of signing, Manches was not aware of whether Mr Freer was a director or not.



Hal Branch, a litigation partner at London firm Lass Salt Garvin, which acted for Mr Freer, said: 'The judge concluded that Mr Freer signed the letters of engagement on behalf of the two companies only and did not intend to bind himself to the payment of sums owing by the companies to Manches.



'In evidence, Manches acknowledged that, at the time, they had not established who were the directors of the two companies.'



Manches did not provide a comment.



By Rachel Rothwell