The woman said her covered personal injury included the consequences of her pregnancy not just the state of being pregnant.

A woman has lost a court battle for compensation after a sterilisation operation failed and she gave birth to a child.

The young woman, referred to in a Dunedin High Court decision as J, underwent the operation in 1998. But, eight years later, she discovered she was 34-weeks pregnant and she gave birth to a son in June 2006.

It was later revealed the operation failed because clips, which should have been attached to the woman's fallopian tubes, were instead fixed to her bladder.

The woman was granted cover for her pregnancy by the Accident Compensation Corporation (ACC), with weekly compensation from May 15, 2006 to July 27, 2006. However, after the birth the woman claimed she was unable to work and wanted more money.

In a District Court judgment in July 2015, Judge Grant Powell said the main issue was whether J's obligation to look after her child once he was born rendered J unable, because of her "personal injury", to engage in her pre-injury employment.

He said "personal injury" was wide enough to include the broader consequences of the covered injury, such as J's obligation to care for her son.

Judge Powell ruled in favour of the mother and said she was entitled to weekly compensation because she was unable to work while she cared for her child. He also suggested other entitlements, such as childcare, might be available.

ACC appealed the decision and it was quashed by Justice Gerald Nation on Friday.

The woman's Dunedin-based lawyer Peter Sara said if pregnancy was to be considered personal injury, then the birth and bringing up of the child should also be considered part of the personal injury for which there would continue to be an entitlement to compensation.

"She didn't want to get pregnant so she went to a doctor who was supposed to sterilise her but failed and then she ended up with a child she didn't expect.

"She deliberately opted for sterilisation because she wasn't in a position to care for a child. The responsibility of a child has been forced upon her against her will."

Sara said he would be taking the matter to the Court of Appeal.

"I think it's quite an artificial and unreal situation.

"The birth of an alive child is the elephant in the room here, and that's the consequence of the covered injury."

In his ruling, Justice Nation said the accident compensation scheme was not designed to provide compensation for all consequences that followed an injury.

"J's inability to work was not the inevitable consequence of the physical effects of her pregnancy."

For J to have a continuing entitlement, both the birth of the child and the need to look after it had to be part of the personal injury suffered by J becoming pregnant, the judge said.

"Pregnancy will cease to be an injury when there are no longer any physical or mental disabilities associated with the pregnancy rendering the mother unable to engage in her pre-injury employment."