The sight of a seemingly stillborn child was "sufficiently horrifying" to convince a High Court judge to award damages, according to The Telegraph, and the case could open the floodgates to thousands of similar claims – potentially costing NHS hospitals millions of pounds.
Until now, hospitals have reportedly been able to argue that visiting relatives undergoing medical procedures is inherently traumatic, and that making pay-outs to family members would set a costly precedent.
The unnamed infant, who was reportedly born "flat and purple with a swollen head", appeared to be dead for 12 minutes and was left with permanent neurological damage.
The girl was at the upper end of the weight spectrum for newborns, clocking in at 4.5kg (10lbs), and the High Court found that medical staff at the Calderdale and Huddersfield NHS Foundation Trust handled the challenge inadequately from antenatal care onwards.
"Offhand" midwives told the worried mum-to-be that "big babies just slip out", but once in the birthing room the girl's shoulder became lodged behind her mother's pelvic bone.
This led to an 11-minute delay in delivery, during which time the blood flow to the infant's brain became obstructed, and the baby girl will now have to live with reduced mental and physical capabilities for the rest of her life.
The midwives also stopped a specialist obstetrician from accessing the mother and child at the critical phase of the operation, The Telegraph reports, while the hospital subsequently destroyed records in an attempt to cover up its malpractice.
In such circumstances, the mother and child would normally expect to win compensation, but the decision to grant damages to the accompanying grandmother is an unusual one, which could set the precedent for many other claims.
Cases brought by the friends and family of victims of clinical negligence could add millions more to the bills of already under-funded NHS hospitals.
A recent study found "relentless" Tory cuts have been responsible for 30,000 deaths in the space of a year, while 2015 saw the greatest rise in mortality for half a century, in what the report's authors called "a major failure of the health system... resulting from the imposition of austerity."
The Calderdale and Huddersfield NHS Foundation Trust said in a statement: "The trust recognise and regret that a number of lives have been adversely affected by the events of this case."