The High Court in Belfast has ruled in favour of relatives of a Catholic teenager killed by loyalist paramilitaries who alleged that the PSNI had failed to properly investigate the UVF gang suspected of carrying out more than 100 murders.
The judge ruled that the failure of the PSNI to conduct an overarching examination of alleged State collusion with the loyalist gang was inconsistent with its human rights obligations.
The independent Historic Enquiries Team (HET) had partially completed its probe into the activities of the UVF's Glenannne gang, which was linked to the Dublin and Monaghan bombings, before its work was halted by the PSNI.
The PSNI's decision was challenged by way of a judicial review by the family of 13-year-old Patrick Barnard who was one of four people killed in loyalist bomb attack on the Hillcrest pub in Dungannon, Co Tyrone on St Patrick's Day in 1976.
The Glenanne gang was a unit of the Ulster Volunteer Force that counted rogue security force personnel among its members.
Operating mostly in Co Tyrone and Co Armagh, the gang has been blamed for around 130 murders during the 1970s and 1980s.
The court was packed with relatives who lost loved ones at the hands of the murderous gang.
Patrick's brother, Edward, who took the judicial review, said he had not expected the outcome.
"I am shocked. I did not think we would get the victory today that we have got," he said.
"We have proved collusion, we have proved that the police halted the report, they stopped the HET from fulfilling their part."
Eugene Reavey, whose three brothers were murdered by the gang in 1976, described the alleged collusion as a "war crime".
"The judge repeated collusion, collusion, collusion all day," he said.
"This was a war crime - there were 135 people dead. This was murder by the state and its agents.
"There is no other word for it than a war crime - that's how big it is.
"I am delighted for everybody here for the perseverance they have shown over the years. We have been humiliated, we have been abused by everybody in every part of the journey but today we have been vindicated."
Delivering judgment at Belfast High Court, Judge Seamus Treacy found that changes made by the PSNI to how it investigated historic cases were "fundamentally inconsistent" with its obligations in the European Convention on Human Rights.
He also questioned the state's commitment to investigating cases that involved alleged collusion.
He was particularly critical of decisions taken by former PSNI chief constable Matt Baggott.
The judge said the Barnard family had a "legitimate expectation" that a thematic probe into collusion would have been completed.
He said the police's treatment of them had been "unfair" in the "extreme".
"It has completely undermined the confidence of the families whose concerns are not only still unresolved but compounded by the effects of the decisions taken by the then chief constable (Mr Baggott)," he said.
Justice Treacy added: "There is a real risk that this will fuel in the minds of the families the fear that the state has resiled from its public commitments because it is not genuinely committed to addressing the unresolved concerns that the families have of state involvement."
The judge placed the onus on the PSNI to offer an "appropriate form of relief" that would address the family's concerns.
In response to the judgment, PSNI Assistant Chief Constable Mark Hamilton, who heads up the service's Legacy & Justice Branch, said: "The PSNI notes the comments made in court today by Mr Justice Treacy in relation to the Judicial Review taken by the family of Patrick Barnard."
Judge Treacy's full written judgment has not been published yet, due to issues around the need to redact some names.
Mr Hamilton added: "We understand that Mr Justice Treacy has not publicly released his judgment but will do so within the next few weeks.
"Once we receive the judgment we will consider it carefully."