The High Court set a precedent by ruling that children born with severe disabilities do not have the right to compensation claims, a lawyer says.
The High Court ruled against Alexia Harriton, 25, and Keeden Waller, 5, who need 24-hour care for their disabilities.
Alexia, from Sydney, is blind, deaf, mentally retarded and suffers spasticity because her mother contracted rubella, which went undetected by her doctor, during pregnancy.
Keeden has permanent brain damage from a genetic disorder not picked up during IVF screenings.
Both sets of parents say they would not have proceeded with the pregnancies if they had known of the problems their children would face.
Lawyers for the children had argued their clients should have the right to seek compensation for their disabilities even if their parents had not taken legal action within the specified timeframe.
When the case failed in the NSW Supreme Court and the Court of Appeal, Keeden and Ms Harriton both turned to the High Court.
The appeals were dismissed by a six to one majority on Tuesday, with the court ruling that a cause of action in negligence required each to show damage had been suffered and that the doctors had a duty of care to avoid that damage.
They found that no legally recognisable damage - loss, deprivation or detriment caused by an alleged breach of duty - could be shown in the lives of Ms Harriton and Keeden.
The judges also held that comparing a life with non-existence for the purposes of proving actual damage was impossible.
Ms Harriton's lawyer, Kathryn Booth, said the decision set a precedent for children with disabilities whose parents were unable to make a compensation claim within three years - currently the statute of limitations in NSW.
It is the first time the High Court had been asked to extend such compensation rights to seriously disabled children themselves, she said.
"(The decision) rules out a claim for the disabled child to bring a claim in their own right," Ms Booth told AAP.
"The court has declared the disabled person has no rights in these circumstances because of the difficulty in determining damage."
But the doctors involved in both the births have applauded the decision as a responsible one.
"Although we are sympathetic to the plight (of Ms Harriton and Keeden), we think this is a sensible decision," a spokeswoman from United Medical Protection, which represented the doctors, said.
"We think it's a responsible thing that the status quo remains unchanged."
Australian Medical Association president Dr Mukesh Haikerwal said the decision showed the need for a scheme to be set up for people born with severe disabilities, to avoid such legal battles.
"The problem is we can minimise risk and reduce risk by doing screening and so on, but it can't ever be 100 per cent guaranteed," he said.