Sunderland magistrates yesterday ordered the city council to pay pounds 3,500 compensation to the owners of the cars wrecked in the spree. The decision could lead to scores of similar claims.
The 1991 Criminal Justice Act means parents or legal guardians can be held liable for the actions of people in their care.
The authority argued it was not to blame for the destruction caused by a 16-year-old boy who was supposed to be under supervision in a council home.
But magistrates disagreed and ordered the authority to pay half the cost of the total damage to the owners of the stolen cars. The 16-year-old was sent to a young offenders institution for three months after admitting aggravated vehicle-taking and using a car without insurance.
The court was told the youth was a passenger in a stolen car when it was spotted by the owner who gave chase with a friend and eventually cornered it.
The driver of the stolen car reversed and rammed the pursuing car three times, wrecking both vehicles. Both youths were arrested at the scene. The driver has already been sentenced.
Peter Scanlon, for the youth, said his client was involved reluctantly: 'During the incident he was in the car screaming to the driver to stop his manic driving. He is an offender in this case and also a victim,' he said.
The council, which is to appeal against the decision, claimed that the youth had no history of offences involving car crime and it could not have foreseen the effect the other boy's influence would have had on him.Reuse content