The youngster was hit by the bug which developed into a devastating brain fever following his birth at Watford General Hospital, London’s High Court heard.
The hospital did not detect the infection quick enough and there was a two-day treatment delay which resulted in “catastrophic damage to his brain,” the boy’s barrister Henry Witcomb QC said.
The boy, who cannot be identified, suffers from eyesight and communication problems, cognitive and movement difficulties as well as behavioural issues.
"The effects of the negligence have been tragic both for the boy and his family," Judge Lambert said after noting that the late diagnosis meant a delay in giving him antiviral drug, Acyclovir.
His lawyers sued West Hertfordshire Hospitals NHS Trust, which runs the hospital, for damages.
The trust admitted liability for what happened to the boy at an early stage and had agreed to settle his case.
The boy will receive a lump sum payout, plus annual, index-linked and tax-free payments to cover the costs of the 24-hour care he will need for life.
The value of the settlement, calculated over the boy's lifetime, comes to more than £37million.
That is believed to be far and away the biggest ever award in a clinical negligence case, the previous record being around £20 million.
John Whitting QC, for the trust, said its chief executive wrote a letter of apology to the boy's family in May last year.
Speaking on behalf of the Trust he said: "The care which he received was not of an appropriate standard and for that we are acutely sorry.
“Lessons had been learned and steps taken to make sure 'nothing similar will ever happen again.”
Judge Lambert praised the “quite astonishing care and devotion which has been shown by both parents to the boy, at very considerable cost to their own physical and mental health” and their “unstinting care and devotion to their son.”
Speaking after the hearing, the boy's solicitor, Paul McNeil, of law firm Fieldfisher, said he believed it was “the biggest” settlement ever paid out by the NHS in a clinical negligence case.
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