The Supreme Court has granted doctors facing investigation by the General Medical Council a new route to challenge the regulator’s processes.

The professional regulator now faces the prospect of doctors under investigation being able to bring individual employment tribunal cases against it, after the Supreme Court threw out an appeal by the GMC arguing doctors should rely on judicial reviews only.

It could mean the GMC will face an increase in doctors bringing legal action against the way it investigates allegations of misconduct, though they will not be able to use the employment tribunal process to challenge determinations by fitness to practise panels, which already have a specific appeal process.

Last week’s judgment by the highest court in the country followed a 2011 tribunal decision that awarded £4.5m in compensation for sex and racial discrimination to Eva Michalak after colleagues at Mid Yorkshire Hospitals Trust led a “concerted campaign” to bring her employment to an end while she was on maternity leave. The trust, which publicly apologised to her, also reported her to the GMC, which began an investigation.

The trust later accepted it had no grounds to refer her to the regulator and Dr Michalak, who remains a registered doctor, brought a case against the GMC in 2013 via an employment tribunal claiming the watchdog had also discriminated against her.

The regulator has not argued against the allegations but instead claimed the employment tribunal did not have jurisdiction to hear the case because an alternative route – judicial review – already existed.

Initially the GMC lost its bid to have the case thrown out but won on appeal before losing in the Court of Appeal. It then took the case to the Supreme Court that last week threw out the appeal.

Lord Justice Kerr said the GMC’s case “rests on a misunderstanding of the nature of judicial review”, which was not set out in legislation but had its origins in common law.

The court said: “Conventionally an ‘appeal’ is a procedure which entails a review of an original decision in all its aspects – an appeal body may thus examine the basis on which the original decision was made, assess the merits of the conclusions reached and, if it disagrees, substitute its own view.

“Judicial review, by contrast, is a proceeding in which the legality of a procedure by which a decision is reached is challenged. It cannot partake of the nature of an appeal – the remedy available on a judicial review application in circumstances such as the present is a declaration that the decision is unlawful or that the decision be quashed.

“The court cannot substitute its own decision for that of the decision maker and, in that sense, the decision of the GMC could not be reversed. An appeal in a discrimination case must confront directly the question whether discrimination has taken place, not whether the GMC had taken a decision which was legally open to it.”

A GMC spokeswoman said: “Whilst the GMC is disappointed that the Supreme Court has not upheld its appeal in this case, [the] decision does no more than clarify that the employment tribunal has jurisdiction to hear the case. The judgment does not address the question of whether there is any merit to the claim made by Dr Michalak.

“We do not believe that there is merit to the claim and will defend the claim when it returns to the employment tribunal.

“We do not consider that it would be appropriate to make any further comment at this stage whilst the case remains the subject of ongoing proceedings before the employment tribunal.”