Jake Pierce was beaten almost daily as a child. His parents left him naked outside for hours at a time and attacked him with cutlery, favoured by his mother for scratching his eyes. He was not allowed to mix with other children and was warned that, if he told people of the abuse, he “would be killed”.

Mr Pierce’s testimony in his case against Doncaster Metropolitan Borough Council included details of how, when only six months old, he was admitted to hospital for “failure to thrive”. Although a doctor advised that he should go into foster care, he was sent home after only a short stint.

Burns to his buttocks and feet were detected when an aunt took him to hospital when he was aged 3, but again the warnings were not heeded.

Mr Pierce’s evidence, given last year at the High Court, culminated with his decision to run away from home at the age of 14, the night that his father pushed him against the wall and held a knife to his throat. He spent months on the streets before being tracked down and taken into care.

Mr Pierce was awarded £25,000 over the failings of social workers and this month saw off the council’s challenge in the Court of Appeal. His victory will have profound implications for dozens of local authorities across the country that now face a welter of compensation claims.

Mr Pierce’s test case was backed with legal aid from the Legal Services Commission as part of its policy of pursuing cases that will clarify the developing area of law on negligence.

David Keegan, director of high-cost cases at the commission, said that the ruling would have “great implications not only for Mr Pierce but for many others who have suffered as a result of their local authority’s negligent failure to exercise their child-protection duties”.

He said that the commission had funded this, and would fund similar cases, as a development of its policy stemming back to a House of Lords ruling in 2004, which established that local authorities had a common-law duty to children in their care.

A further important development came in January this year, in the so-called Lotto rapist case, when law lords swept away the current bar on historic claims for sexual assault. Until then, child abuse victims could not bring a claim more than six years after reaching 18.

This month’s decision in Mr Pierce’s case establishes the liability of councils if they fail to act and take children away from abusive parents.

Chris Gore, the commission’s senior case manager, said that theoretically the potential number of cases was “vast” and every set of care proceedings where there was delay “could give rise to one of these claims”. But there would be a filter because the commission had to prioritise: it would back cases that would be “economically viable and legally strong enough”.

He added: “We are interested in test cases like that of Mr Pierce which sharpen focus on the law.”

He said that in a significant proportion of the 200 to 300 cases, a local authority’s failings resulted in years of delay rather than the immediate seeking of a court order or other steps. As a result, children will have suffered anything from neglect to verbal or physical abuse.

Many cases may now settle in the wake of the Court of Appeal ruling, with likely compensation in the region of £50,000 to £100,000 for serious abuse where there was a clear breach of duty by the council concerned. But many will be much lower — nearer to £15,000.

A second test case, which has been brought against a local authority over abuse, is being backed by the commission in the Court of Appeal. Judgment is due next month.

This involves an adult disabled couple, known only as X and Y, who have won – subject to the appeal – £100,000 in damages. The High Court ruled in May that councils have a duty to protect vulnerable adults, as well as vulnerable children, and found their local authority negligent.

The couple, who were living in unsuitable council housing with their two young children, suffered prolonged harassment culminating in a weekend of sexual abuse, assault and imprisonment in their own home.

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