'Religious freedom'
The woman, who cannot be named for legal reasons, says she was assaulted as a child by the late Father William Baldwin, a priest of the Portsmouth Diocese, at a children's home in Hampshire run by an order of nuns.
Lawyers for the claimant said of the ruling in November 2011 that it was the first time a court had been asked to rule on whether the "relationship between a Catholic priest and his bishop is akin to an employment relationship".
After the latest hearing, the claimant's lawyer Tracey Emmott said: 'It is hoped that this ruling will now be accepted, and that victims of abuse by Catholic priests can be treated with the dignity and respect they deserve."
A spokesman for the diocese said: "This case is not, and has never been, about seeking to avoid or delay the payment of compensation to victims with valid claims.
"This case is about fundamental legal principles involving the very nature of civil society and religious freedom.
"
It would be disastrous if, in seeking to provide redress for victims of harm, the law put intolerable new pressures on the voluntary sector.
"This judgement shows further thought and scrutiny are required before clarity in this regard can be established."
Catholic Church loses child sex abuse liability appeal
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