Lathbury was still in command of the 1st Parachute Brigade during the Battle of Arnhem, part of Operation Market Garden in the Netherlands. On 18 September 1944 he was cut off from his command while in the company of Major General Roy Urquhart, the division's GOC, when he was badly wounded in the left leg and his spine was chipped, leaving him temporarily paralysed. Lathbury was left in the care of a local Dutch family and became a prisoner of war. He concealed his rank, pretending to be a lance corporal. He escaped with help of the Dutch resistance by simply walking out of the main doors of the hospital in which he was held. The Dutch resistance put him in touch with other hiding British soldiers. Lathbury, along with Lieutenant Colonel David Dobie and Major Digby Tatham-Warter, organised an escape across the Rhine. Lathbury and Digby crossed the Rhine on 22 October with 137 personnel, linking up with US paratroopers of First Lieutenant Frederick Heyliger's Company E of the 2nd Battalion, 506th Parachute Infantry Regiment, part of the U.S 101st Airborne Division. Lathbury was portrayed by Donald Douglas in the 1977 film "A Bridge Too Far".