Council officials at Bury put the boy on the Child Protection Register
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A mother and her young son cannot claim damages from a local authority which wrongly accused her of harming the child who was then taken from her.
The child was in care for four months before it was found his rib injuries were caused by brittle bone disease.
The mother, from Bury, Greater Manchester, claimed that both she and her son suffered psychological damage.
The Court of Appeal ruled Bury Council did not owe the mother a duty of care and she cannot sue for negligence.
Although there was a duty of care owed to the boy, the was no evidence, other than from the mother, that the separation had caused any lasting damage, the appeal judges ruled.
Lords Justices Mummery, Wall and Laws waited to hear the case until after a House of Lords ruling on similar claims over children had wrongly been taken into care.
Foster care
The Law Lords by a majority ruled last year that because of the seriousness of child abuse as a social problem, healthcare and other child care professionals should be protected from being sued when they make mistakes.
The local authority put the child on the Child Protection Register when he suffered four rib fractures aged five months.
Bury Family Proceedings Court made an interim care order in May 1997 and the child and his parents had to live at a family resource centre in Bristol for 12 weeks.
The child was put in the care of a foster parent in August 1997 and was not returned until December after the National Society for the Prevention of Cruelty to Children carried out a risk assessment.
But the proceedings continued until July 1998 when the local authority accepted that the rib fractures were caused by a rare condition known as osteogenesis imperfecta.
Lord Justice Wall said the public policy protecting care professionals from prosecution lasts throughout the investigation and until the proceedings are discharged.