The council should have referred the girl, now 20, to children's services rather than ask its housing department to put her up in temporary accommodation, according to the judgment.
Frances Crook, director of the Howard League for Penal Reform, said: "While we are disappointed an appeal for retrospective support has not been allowed, we are pleased the House of Lords has affirmed the importance of providing for 16- and 17-year-olds."
The Howard League became involved when the girl entered the criminal justice system.
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