The men, who are both now in their 30s, attended the school in Wandsworth in the mid-1980s and were molested when they were aged 11 and 14 by the teacher, who was meant to be responsible for their pastoral care.
Last October Judge Cotran at the Mayor and City of London County Court found that both men, known only as X and Y, had been abused and 'suffered serious psychiatric disturbances' as a result.
However the judge also found that the men were 'statute barred' from making a claim for damages against the London Borough of Wandsworth, which ran the school.
That is because they were outside a non-extendable six-year 'limitation period' within which victims of sex assaults must launch their compensation claims.
One of the men would have been due more than£50,000 had he won his case, and the other£70,000, but the judge's ruling meant they were left with nothing.
The two men challenged Judge Cotran's ruling before the Master of the Rolls, Sir Anthony Clarke, Lord Justice Brooke and Lady Justice Arden, sitting at London's Civil Appeal Court.
But Sir Anthony dismissed their appeals, saying the court was bound by a previous House of Lords ruling that the six-year limitation period was non-extendable. He also dismissed claims that the current law is 'incompatible' with human rights.
However, the men may now appeal to the House of Lords and the Law Lords will have power to change the way in which the law is interpreted.
The court heard that one of the men, who had attended the school from the age of 11, had been forced into school lavatories where the teacher performed obscene sex acts on him.
The other man, who attended the school from the age of 12, was invited to fitness 'training' sessions, where the teacher perfomed sex acts on him.
A psychiatrist said the abuse on the first man had been 'inflicted at a sensitive period in the social and psychosexual development of the victim' and concluded that, as a result, he now suffers from 'mood swings and personality difficulties that make it difficult for him to hold down a job'.
With regards to the other man, who has required in-patient treatment for his mental problems, the expert concluded that 'it is reasonable to assume that abuse by an older man at this time would lead to confusion about sexual identity and consequent low self-esteem'.