John Pat Cunningham, 27, was killed in Co Armagh in June 1974 as he ran away from an Army patrol, which was commanded by Hutchings.
The Director of Public Prosecutions for Northern Ireland can direct a defendant be tried by a judge alone, in what was formerly known as a Diplock court, where a charged offence was "committed to any extent... as a result of, in connection with or in response to religious or political hostility".
Prosecutors directed the 78-year-old's trial be heard by a judge alone after concluding that there was "a risk that the administration of justice might be impaired if the trial were to be conducted with a jury".
Hutchings, from Cawsand in Cornwall, appealed against the decision, but on Thursday the UK's highest court dismissed his case.
Giving the court's unanimous judgment in London, Lord Kerr ruled that it was "entirely unsurprising" prosecutors decided there could be a risk of a biased juror or jury.
The judge noted Hutchings' patrol had been involved in a "firefight" with members of the Provisional IRA (PIRA) two days before the fatal shooting.
Lord Kerr added: "That the soldiers who fired on Mr Cunningham suspected that he was a member of the PIRA seems inescapable."