The St Williams ruling has been labelled a "landmark" judgment by Jordans Solicitors, who represented the victims.
Organisations who care for children will now be held liable for the abuse of children in their care if their work creates a risk of abuse.
Prior to this decision, claimants had to show that an organisation employed or closely controlled the abuser. More than 170 men claim they suffered physical and sexual abuse at the home between 1958 and 1992.
In 2004 James Carragher, the former headmaster of St Williams, was found guilty of 14 counts of indecent assault against boys, some as young as 12. He was sentenced to 14 years imprisonment.
‘It is clear that extensive abuse by staff has taken place at St Williams. Since starting the case both organisations who ran the home have attempted to use legal technicalities to evade responsibility, a tactic mirrored in other church abuse cases. I have had to witness the distasteful spectacle of seeing the two Roman Catholic organisations blame each other . This case should have been settled years ago._
I hope the recent news events regarding the Jimmy Savile cases and the public’s new understanding of the effects of sexual abuse on victims means that both organisations are now prepared to reach a sensible negotiated settlement with these victims of abuse’._
The Supreme Court is to announce its judgement today after the Middlesbrough Roman Catholic Diocese appealed to overturn a ruling that it is responsible for an £8m compensation claim by child abuse victims.
The challenge relates to claims from 170 men who allege they were sexually and physically abused at the St Williams Children's Home in Market Weighton between 1960 and 1992.
In December 2003, James Redmond Carragher, the former principal of the home was jailed for 14 years after he was found guilty of sexual offences against 22 boys.