Surrogacy — permitted payments and reasonable expenses

This means that it is a criminal offence to make, or negotiate, a surrogacy agreement where the surrogate is paid a ‘fee’ for having a baby.

Some payments can be made to a surrogate but they are restricted by law.  Section 54(8) of the Human Fertilisation and Embryology Act 2008 provides that the court must be satisfied that no money or other benefit, other than ‘reasonable expenses’, has been given or received by the surrogate. 

As observed by Russell J in the case of Re A, B and C (UK Surrogacy Expenses)(2016) EWFC 33 there is no definition of “reasonable expenses” within the legislation and this issue is therefore determined on a case by case basis. He commented as follows:

“The law provides no such tariff for expenses for UK surrogacy, or indeed any definition in respect of “expenses reasonably incurred”.  There is no universally acceptable figure to pay for surrogacy expenses in the UK irrespective of the circumstances in law, whether it is £15,000 or more or less.”

It follows that many intended parents are left to grapple with the question of what constitutes a reasonable expense.

What is likely to qualify as a reasonable expense?

Below are some common examples of what may be considered to be a reasonable expense:

• Loss of earnings
  
  This may also include loss of surrogate’s partner’s earnings.

• Medical expenses or equipment
  
  In the above-mentioned case of Re A, B and C (Surrogacy Expenses) (2016) EWFC 33  it was accepted that this may include a mobility scooter.

• Fertility treatment
• Specialised food and supplements
• Maternity clothes
  
  Including clothing after giving birth and footwear or shoes due to swelling caused by pregnancy.

• Travel or accommodation relating to the pregnancy
  
  This may include a recuperation holiday after the pregnancy and giving birth. Conversely, it may also include reimbursement for a holiday the surrogate had previously booked but was no longer able to attend due to the pregnancy.

• Additional childcare or help around the house during pregnancy or after birth
  
  This can also include expenses such as takeaway meals for the surrogate’s children when the surrogate is unable to cook due to nausea or sickness caused by pregnancy.

• Classes to support the pregnancy
• Costs of making a will or putting life insurance in place to protect the surrogate’s family

The following may not fall under the category of reasonable expense:

• Using funds for a deposit on a flat
  
  In X & Y (Foreign Surrogacy) [2009] 1 FLR 733, it was conceded that the sums paid significantly exceeded expenses reasonably incurred as the surrogate mother had confirmed she intended to use some of the funds paid to her as a deposit for the purchase of a flat.

• A flat fee
  
  As the sum paid must be reflective of expenses incurred or likely to be incurred, it is unlikely that a flat fee can be agreed without reference to any expenses.

• Additional fee for multiple births (unless expenses can be shown to have increased)
  
  Given that any payments must be based on expenses, it is impossible to give an arbitrary figure as to the appropriate amount to pay to a surrogate. In Re A, B and C (Surrogacy Expenses) (2016) EWFC 33, the applicants used three surrogates. The first surrogate was paid £13,192.80, the second £12,477.61 and the third £15,000. These sums were agreed without any reference to expenses they were covering or likely to be incurred, which the court was highly critical of. 

It is therefore of the upmost importance to keep track of all expenses incurred or likely to be incurred.

What happens if the payments made to the surrogate cannot be classed as reasonable expenses?

If the court finds that money has been paid to a surrogate which exceeds reasonable expenses, they have discretion to retrospectively authorise such payments. Again, legislation provides no guidance as to when a judge may give approval. 

If authorisation of the additional funds is not provided, the court cannot make a parental order. 

Generally, however, the courts will only refuse to make a parental order where there has been a flagrant disregard for public policy. Paragraph 29 of Russell J’s judgment in Re A, B and C (UK Surrogacy Expenses)(2016) EWFC 33  Russell J states as follows:

“The need for the court to consider issues of public policy extends to welfare as to ensure commercial surrogacy agreements are not used to circumvent childcare laws in the country, resulting in the approval of arrangements in favour of people who would not have been approved as parents on welfare grounds under any set of existing law such as adoption.  To paraphrase Hedley J, the court must be careful not to be involved in anything that looks like a payment for buying.”

HHJ Hedley in X & Y (Foreign Surrogacy) [2009]1 FLR 733 proposed three questions that should be considered when determining whether to authorise the payments:

1. Was the sum paid disproportionate to reasonable expenses?
2. Were the applicants acting in good faith and without moral taint?
3. Were the applicants party to any attempt to defraud the authorities?

Although the judge authorised the payments in the above case on the basis of children’s welfare, he did note that the exercise is incredibly difficult as the court is required to balance two competing and potentially irreconcilably conflicting concepts – the clear legislation prohibiting commercial surrogacy and the potential consequences for the child if a parental order is not made on the basis that payment in excess of reasonable expenses has been received. 

Scope for reform

In their 2023 report entitled “Building Families Through Surrogacy: A New Law” the Law Commission criticised the current law for lacking clarity as to what payments can be made to the surrogate. They have proposed a new surrogacy pathway, under which there would be clear categories of permitted payments. 

In addition to the items listed as a reasonable expense above, permitted categories would include the following:

• Safeguarding and screening costs of the new pathway
• Costs related to the decision to enter into a surrogacy arrangement
• The cost of maintaining contact between the surrogate, the intended parents and the child after the birth
• Modest gifts for the surrogate

The Law Commission proceeded to outline payments which would not be permitted under their proposed new pathway:

• Any payment which is not a permitted payment
• General living expenses
• Compensatory payments
• Gestational services/payment for carrying the child

Additional recommendations

The Law Commission went one step further in their report and included recommendations about the way in which intended parents should be permitted to make payments to the surrogate, including the following:

• Payments should be based on reimbursing actual costs — a regular allowance should not be provided
• A “float” could be paid to the surrogate to cover anticipated expenses so that she is not left out of pocket pending reimbursement by the intended parents

The Law Commission’s report and draft legislation was published on 29 March 2023. The Government’s interim response was received on 8 November 2023 and Minster Baroness Merron recently met with the Law Commission in order to discuss the recommendations included in their report. It is hoped that the Government’s full response will be received in the near future.

Watch this space…