The Dutch Supreme Court on Friday slashed the state's liability for the 1995 Srebrenica massacre during the Bosnian War, saying peacekeepers had only a "slim" chance of preventing the deaths of hundreds of Muslim men.
Judges reduced to 10 per cent from 30 per cent the Dutch state's responsibility for compensation to the families of 350 victims killed by Bosnian Serb forces who overran the safe haven.
Lightly-armed Dutch UN peacekeepers were overrun by the Bosnian Serbs during the break-up of the former Yugoslavia, triggering the worst atrocity in Europe since World War II.
Almost 8,000 Muslim men and boys were killed in the genocide at Srebrenica.
"The Dutch State bears very limited liability in the 'Mothers of Srebrenica' case," the Supreme Court said.
"That liability is limited to 10 per cent of the damages suffered by the surviving relatives of approximately 350 victims."
The relatives are represented by the Mothers of Srebrenica victims' organisation which sued for compensation, sparking a years-long legal battle.
There was no immediate reaction from either the Mothers of Srebrenica or the Dutch government.
A Dutch court originally held the state liable for compensation in 2014.
In 2017 the appeals court upheld that decision before it was referred to the Supreme Court.
The lower court had said in 2017 that the Dutch actions meant the Muslims were "denied a 30 per cent chance of avoiding abuse and execution", and thus the Dutch state was liable for 30 per cent of damages owed to families.
The Supreme Court agreed that "the state did act wrongfully in relation to the evacuation of the 5,000 refugees" in the compound, including 350 Muslim men the Bosnian Serbs were unaware of.
It said the Dutch peacekeepers "failed to offer these 350 male refugees the choice to stay where they were, even though that would have been possible".
But explaining the decision to reduce the liability, the Supreme Court said that "the chance that the male refugees would have escaped the Bosnian Serbs had they been given the choice to stay was slim, but not negligible."
In a swipe at the failure of other foreign powers to act, the top court added that the "chance of Dutchbat (the Dutch UN mission) receiving effective support from the international community was slim".
Srebrenica has cast a long shadow over The Netherlands, forcing a the government to resign in 2002 after a scathing report over the role of politicians in the failure of the peacekeepers.
Former Bosnian Serb leader Radovan Karadzic is currently serving a life sentence in jail in The Hague after being convicted of genocide over Srebrenica and war crimes throughout the 1990s.
Ex-military chief Ratko Mladic, 76, dubbed the "Butcher of Bosnia", is currently appealing a life sentence on similar charges at an international tribunal in The Hague.
Slobodan Milosevic, Karadzic's long-time patron during the war, was on trial in The Hague at the time of his death in 2006.
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