Children who suffer negligence after their parents or carers have been wrongly accused of abuse can sue councils and health authorities, following an important high court ruling.

Master of the Rolls Lord Phillips decided that parents could not sue, but children taken into care could claim compensation for the period they are away from their parents.

The court heard three cases from parents claiming the right to sue after being wrongly accused of abuse by health authorities, and, in one of the three cases, a council as well.

The Association of Directors of Social Services has reacted to the judgement by saying it is a “significant” extension of children’s rights.

But president David Behan said social workers must still be allowed to carry out their statutory obligations to investigate cases of abuse.

He said: “What is vitally important is that staff should feel supported in the professional judgements they make, and that they do not feel as if they are working with hands tied behind their backs, in fear of litigation.

"If, at the end of the day, we do not get it right, then it is only right and proper that children should have redress for any harm they suffer.”

In a case involving Kirkless council and Dewsbury Health Care NHS Trust, a nine-year-old girl was taken into care after her father was wrongly accused of sexually abusing her. The father and daughter claimed psychiatric injury and financial loss arising from the accusations.

Lord Phillips accepted the girl’s right to sue the council and the trust, but rejected the father’s claim.

In the other two cases only the parents claimed the right to sue.