A Masterton couple have cleared a legal hurdle to sue an obstetrician over the death of their stillborn baby.

The case has been watched by medico-legal experts who say it is an example of the difficulties New Zealanders face in seeking remedies for suffering due to medical mishaps.

Craig and Amanda MacLeod allege that obstetrician Jeffrey Harrild failed in his management of Mrs MacLeod's pregnancy at Masterton Hospital in 1997.

The Medical Practitioners' Disciplinary Tribunal found Mr Harrild guilty of professional misconduct and conduct unbecoming of a medical practitioner over the death of the unborn baby.

He was censured and fined $3000 and ordered to pay 15 per cent of the costs of the $6530 investigation.

The MacLeods were disappointed at the penalty, which they called a "token fine and slap on the wrist".

They went to the Complaints Review Tribunal, a judicial body set up under the Human Rights Act which can hear claims for damages up to $200,000.

At a preliminary tribunal hearing, a lawyer for Mr Harrild, Gaeline Phipps, argued that Mrs MacLeod would be covered by accident compensation, which would have prevented the MacLeods from seeking remedies against the doctor and limited any damages the tribunal could award.

But the tribunal has found that, as Mrs MacLeod had not suffered a physical injury, she was not covered by ACC - opening the way for the case to proceed.

In a written decision, the tribunal chairwoman, Susan Bathgate, said it had been established by other New Zealand courts that neither an abortion nor a stillbirth constituted physical injury to the mother for the purposes of the accident compensation legislation.

"We do not intend to depart from that view."

If successful, the MacLeods' case would be only the second time the tribunal has awarded medical damages against a doctor.

The MacLeods' lawyer, Dr David Collins, QC, said the tribunal provided a cheap and efficient way for people to sue for damages of up to $200,000.

He had brought the previous successful case to the tribunal, which had awarded $30,000 against a midwife over a botched delivery.

Susan Bathgate declined an application by Gaeline Phipps to confer an additional right or status on to the mother because the foetus had no rights or status under the legislation, as she said that was never intended.

The tribunal had the jurisdiction to hear and determine the proceedings because the matter had been the subject of an investigation by the Health and Disability Commissioner.

The MacLeods claimed that Mr Harrild breached the Code of Health and Disability Services Consumer Rights.

A medico-legal expert, Auckland lawyer Bruce Davidson, said it was an interesting case which highlighted the difficulties people faced in seeking remedies for their suffering over medical mishaps.

"They have to go through a whole lot of complicated proceedings."