The suspect in the death of Harry Dunn was never entitled to diplomatic immunity, the High Court has heard.
Mr Dunn, 19, was killed when his motorbike was involved in a crash with a car being driven on the wrong side of the road outside RAF Croughton in Northamptonshire on 27 August last year.
The driver, American Anne Sacoolas, was a former CIA agent and the wife of Jonathan Sacoolas, who worked as a technical assistant at the base.
A few weeks later, both left the UK after the US stated that she was entitled to diplomatic immunity.
Lawyers for Mr Dunn's parents, Charlotte Charles and Tim Dunn, have argued that Sacoolas never had "relevant immunity".
They claim the Foreign, Commonwealth and Development Office (FCDO) wrongly decided Sacoolas had immunity and unlawfully obstructed the police investigation by keeping officers "in the dark".
The 43-year-old was charged with causing death by dangerous driving last December, but extradition efforts have been rejected by the US Department of State.
The legal argument at the High Court revolves around a secret agreement between the UK and the US made in 1995 over immunity for staff at RAF Croughton.
The immunity was only for work duties and not for "acts performed outside" of those. It also did not say anything about the immunity for relatives of staff.
The FCDO said that any waiver of immunity only, therefore, applied to staff at the base and not their family, arguing Sacoolas was entitled to it.
Geoffrey Robertson QC, representing Mr Dunn's parents, said the FCDO "tacitly accepted the Sacoolas family's departure from the UK".
He read out a text message sent to a US embassy official one day before Sacoolas and her family left the UK.
It read: "I think that now the decision has been taken not to waive (immunity), there's not much mileage in us asking you to keep the family here.
"It's obviously not us approving of their departure but I think you should be able to put them on the next flight out."
The FCDO maintained that Sacoolas automatically had diplomatic immunity and that they did not obstruct the police investigation as a waiver had been requested to lift the immunity.
The remote hearing before Lord Justice Flaux and Mr Justice Saini is expected to last two days.