The British Boxing Board of Control (BBBC) has lost its appeal against a ruling last year that it was liable for the brain damage suffered by Michael Watson in a fight in 1991.
Watson is claiming compensation of around £1m from the board, which is not insured for such risks. The BBBC went into administrative receivership following the original court verdict.
The judgment is a worrying development for the ruling bodies of other potentially dangerous sports such as rugby as it establishes that sports administrators are liable for the safety of participants.
At the appeal, the BBBC had argued that it was purely a regulatory body and did not organise fights or arrange medical assistance. This was the responsibility of the boxers or the organisers and promoters.
At the original hearing in September last year Mr Justice Kennedy ruled that Watson was entitled to damages from the board.
He said the board was in breach of its duty of care to Watson for failing to provide adequate ringside resuscitation facilities. The BBBC-approved doctor who originally attended Watson at the venue did not enter the ring until seven minutes after the fight had been stopped.
The doctor was not experienced in resuscitation procedures and no emergency ventilation and intubation equipment was available.
By the time Watson had surgery to remove a blood clot he had suffered serious brain damage.
Since the fight in 1991, the BBBC has introduced a number of measures to prevent a repeat of the incident. Doctors qualified in resuscitation techniques and with experience of head injuries attend ringside and two ambulances stand by.
The BBBC was refused leave to appeal but can still apply to the law lords for leave.