Mr Justice Treacy upheld a legal challenge to police decisions by an east Belfast resident.
The judge told the High Court in Belfast that police had not understood their powers over the protests.
The judge said the police had “misdirected themselves” into thinking the issue was legally complex.
“This was simply wrong and I consider that it was this misdirection which explains and led to the situation in which the police facilitated illegal and sometimes violent parades,” he said.
The resident’s solicitor Padraig Ó Muirigh described the judgement as “emphatic”.
“This is a very significant judgement which very clearly criticised the police response to illegal parades in the Short Strand last year,” he said.
“It has massive implications for policing parades in the future.”