Solicitor Tessa Gregory, who represented Cait Reilly and 40-year-old unemployed HGV driver Jamieson Wilson, said today's ruling reveals "a lack of transparency" by the Department for Work and Pensions in implementing mandatory work schemes.
The case has revealed that the Department for Work and Pensions was going behind Parliament's back and failing to obtain Parliamentary approval for the various mandatory work schemes that it was introducing.
It also reveals a lack of transparency and fairness in the implementation of these schemes.
The claimants had no information about what could be required of them under the back-to-work schemes.
The Court of Appeal has affirmed the basic constitutional principle that everyone has a right to know and understand why sanctions are being threatened and imposed against them.
I brought this case because I knew it was wrong when I was prevented from doing my voluntary work in a museum and forced to work in Poundland for free for two weeks as part of a scheme known as the sector based work academy.
Those two weeks were a complete waste of my time as the experience did not help me get a job.
I wasn't given any training and I was left with no time to do my voluntary work or search for other jobs.
The only beneficiary was Poundland, a multimillion-pound company. Later I found out that I should never have been told the placement was compulsory.
I don't think I am above working in shops like Poundland. I now work part time in a supermarket. It is just that I expect to get paid for working.
I hope the Government will now take this opportunity to rethink its strategy and do something which actually builds on young unemployed people's skills and tackles the causes of long-term unemployment.
I agree we need to get people back to work but the best way of doing that is by helping them, not punishing them.
The Government ought to understand that if they created schemes which actually helped people get back into work then they wouldn't need to force people to attend.
The Court of Appeal's unanimous decision against discount store Poundland is a "huge setback for the Department for Work and Pensions (DWP), whose flagship reforms have been beset with problems since their inception", according to Public Interest Lawyers.
The lawyers, who represented Cait Reilly and 40-year-old unemployed HGV driver Jamieson Wilson, said that "until new regulations are enacted with proper parliamentary approval, nobody can be compelled to participate on the schemes".
Today's judgment sends Iain Duncan Smith back to the drawing board to make fresh regulations which are fair and comply with the court's ruling.
Until that time nobody can be lawfully forced to participate in schemes affected such as the Work Programme and the Community Action Programme.
All of those who have been stripped of their benefits have a right to claim the money back that has been unlawfully taken away from them.
University graduate Cait Reilly's successful appeal was made by Lord Justice Pill, Lady Justice Black and Sir Stanley Burnton.
In November 2011, Miss Reilly had to leave her voluntary work at a local museum and work unpaid at the Poundland store in Kings Heath, Birmingham, under a scheme known as the "sector-based work academy".
She was told that if she did not carry out the work placement she would lose her jobseeker's allowance.
For two weeks she stacked shelves and cleaned floors.
Three judges in London ruled that the regulations under which most of the Government's back-to-work schemes were created are unlawful and quashed them.
Miss Reilly, 24, from Birmingham, and 40-year-old unemployed HGV driver Jamieson Wilson, from Nottingham, both succeeded in their claims that the unpaid schemes were legally flawed.
Their solicitors said later the ruling means "all those people who have been sanctioned by having their jobseekers' allowance withdrawn for non-compliance with the back-to-work schemes affected will be entitled to reclaim their benefits".
BBC News - Back-to-work scheme ruled lawful by High Court http://t.co/JiYAyP8U<< Quite right; very valuable for jobseekers
A judge at the High Court has upheld the legality of the Government's back-to-work scheme, but raised concerns about the letters it sends to jobseekers.
These letters are used to warn claimants that they may lose their benefits if they fail to participate in the schemes without good reason.
A spokeswoman for the Department for Work and Pensions said: "We do not believe there is anything wrong with the original letters and we will appeal this aspect of the judgment, but in the meantime we have revised our standard letters."
A spokeswoman for the Department for Work and Pensions said: "We are delighted, although not surprised, that the judge agrees our schemes are not forced labour.
"Comparing our initiatives to slave labour is not only ridiculous but insulting to people around the world facing real oppression.
"Thousands of young people across the country are taking part in our schemes and gaining the vital skills and experience needed to help them enter the world of work - it is making a real difference to people's lives.
"Those who oppose this process are actually opposed to hard work and they are harming the life chances of unemployed young people who are trying to get on."
The legal firm representing the two claimants who took the Government to court over the back-to-work scheme has said it will seek to appeal today's ruling:
Today’s decision should mean that many of those subjected to benefit sanctions will be entitled to reimbursement by the Department of Work and Pensions. It is truly extraordinary that the Government has found itself in this position by failing to provide basic information to those affected. We welcome the Court’s ruling on this issue but we continue to maintain that the Regulations themselves are unlawful and ought to be quashed. We are seeking permission to appeal the Court’s findings in this regard.