The boy, now aged 17, was a 12-year-old pupil at Sale grammar school, in Manchester, when classmates began calling him a "lanky loner" and subjecting him to taunts of a sexual nature.
Earlier this year a court heard how he was so traumatised by the campaign, which culminated in a sexual assault during a school trip, that he was unfit to attend school for two years, required psychiatric treatment and was prescribed anti-depressants.
Judg Richard Holman said that teachers could not have foreseen that the bullying would escalate to assault. However, he concluded that the school had been in breach of its duty of care on the issue of verbal abuse and had failed to investigate or monitor the agreed strategy. He awarded the boy, who cannot be named, damages of pound;1,500.
Christopher Newton, the family's solicitor, said this was the first time a pupil had succeeded on the issue of verbal, rather than physical, bullying against a local authority.
Christopher Pratt, Trafford's director of education, described the case as "very regrettable".