Campaigners said the judgment, in which the Isle of Wight council's plan to reduce its adult social care budget was ruled unlawful and quashed, should serve as a warning to every council that is planning cuts.
It is the second High Court ruling this week to deal a major blow to local authorities seeking to save millions of pounds by targeting adult social care in the wake of massive central government cuts to their budgets.
Mrs Justice Lang, sitting in London, ruled against the Isle of Wight's plan to restrict access to social care by making it harder for people to meet eligibility criteria. The judgment makes it unlawful for councils trying to make cuts to adult social care to ignore the impact this will have on a person's quality of life.
Charities including Age UK, Scope and the National Autistic Society welcomed the decision, which implies that councils are obliged to do much more than merely keep people safe. Before cutting care, they must give equal consideration to factors such as prevention of neglect, support with personal care, access to education or support to maintain family relationships.
The judgment also means courts could quash council plans if a thorough consultation process is not carried out when considering cuts to services for disabled adults.
But councils in England have been ordered to save £5.6bn by 2015 and so must find savings from somewhere. Raising the eligibility bars has been regarded as one way to reduce the numbers of people entitled to social care, and to allow councils to focus only on keeping those with the most severe problems safe.
Lawyers for the two Isle of Wight claimants, referred to as JM and NT, said the ruling sends "a very clear message" to all councils seeking to make similar cuts. The council confirmed it was under pressure to make "substantial" budget savings while at the same time protecting the vulnerable.
Andy Burnham, the shadow Health Secretary, said families were being forced to the courts because the Government had abdicated its responsibility to vulnerable people. "There is a developing crisis in adult social care as councils agonise over severe cuts they have to make because of the Government's cavalier approach to public services. It should not fall to the courts to secure quality of life and dignity for adults with severe disabilities."
Richard Hawkes, chief executive of the disability charity Scope, said: "Today's judgment should be a warning to every council to think before it cuts. Getting decisions wrong could prevent disabled people from living a full life and making an active contribution to society. We understand the pressures councils are under, but there are creative ways to strike a balance between saving money and protecting frontline support."
Alex Rook, a solicitor from Irwin Mitchell representing the families, said: "The key message is that the obligations that the state has towards disabled people go beyond merely keeping you safe. We know that pretty much all councils are making cuts in the next year; if they're thinking of doing it this way, they have a very clear steer from the courts that they can't and that it will be struck down. "
The first claimant, JM, 32, has severe autism and a brain injury suffered at birth, and lives with his parents. The second claimant, NT, 31, also has autism and a learning difficulty. He lives in residential accommodation during the week, but returns home to his mother every weekend. His mother launched court action fearing the council's new policy would have a "devastating" effect on her son's quality of life.
David Rogers, from the Local Government Association, said: "This reinforces what we already know: there isn't enough money in the system and it needs urgent reform ... Councils cannot continue to do all they have done in the past."
A Department of Health spokesman said: "The most innovative councils have proved that it is possible to achieve better outcomes whilst making efficiency savings."
Key cases: Cuts in the courts
Social care
On Wednesday a judge struck down a decision by Sefton Council to freeze care home fees for the second year running.
Reductions in provision of care for disabled people by Birmingham City Council were declared unlawful by the High Court on 19 May.
Elaine McDonald, 68, took Kensington and Chelsea council to court over its decision not to provide her with a night carer, but her case was rejected.
Education
The National Deaf Children's Society forced Stoke-on-Trent City Council to review its decision to cut educational support for deaf children on 9 September, after securing a High Court order to stop them.
Libraries
A High Court judgment on the closure of 21 libraries in Gloucestershire and Somerset is expected next week, with the cuts currently on hold after residents obtained injunctions.
Library campaigners took Brent Council to the Court of Appeal this week after the High Court rejected their claim that its closure of six buildings was "unlawful".
Tuition fees:
Two teenagers took the rise in tuition fees to the High Court last week. Callum Hurley and Katy Moore, 17, argue the rise breaches equality law.
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