Surrogacy Costs 3.0: Return of the Justices

The Godfather, Lord of the Rings, and Back to the Future: what do all of these film series have in common? They are trilogies.

For those of you who are avid readers of my blogs, you will know that I’ve been following the case of XX v Whittington Hospital NHS Trust [2017] EWHC 2318 quite closely. Back in 2017, the first instalment of the surrogacy trilogy began…

The facts

XX developed cancer of the cervix which was not detected, either by way of smear tests or biopsies. To treat her cervical cancer, she required chemo-radiotherapy treatment. The side effect of such treatment was infertility and severe radiation damage to her bladder, bowel and vagina. Had XX’s cancer been detected sooner, she would have had the opportunity to undergo fertility-saving surgery, but as a result of the defendant’s admitted negligence, such surgery was not possible.

As XX was unable to carry her own children, XX and her partner wished to have their own biological children by surrogacy. They elected to pursue a commercial surrogacy arrangement in California, as opposed to a UK based non-commercial surrogacy. Prior to XX undergoing her treatment for cervical cancer, she first underwent a cycle of ovarian stimulation and egg harvest which produced 12 eggs. Those eggs were cryopreserved by vitrification. As XX and her partner wished for a large family, they were willing to use donor eggs should XX’s own cryopreserved eggs not result in a sufficiently large number of children. By the time the case came to trial, liability had been admitted by the defendant trust, so the only issues the Court was asked to determine related to quantum.

Previous decisions

In a Court room far far away[1], Sir Robert Nelson, sitting as a High Court Judge, concluded that whilst surrogacy costs were, in principle, recoverable, the costs associated with commercial surrogacies and surrogacies involving donor eggs were not. Thereafter, we all waited with bated breath to see if there would be a second instalment, and just like with Godfather II, we were not disappointed.  In 2018 the Court of Appeal revisited the issues of commercial surrogacy arrangements, the use of donor eggs, and XX’s award for PSLA (pain, suffering and loss of amenity), and overturned the decision of the High Court. The Lord and Lady Justices unanimously concluded that the costs associated with XX’s Californian commercial surrogacy arrangement were recoverable, that it was entirely artificial to distinguish between “own” and “donor” eggs and, as XX had been successful in her appeal, her PSLA damages should be reduced to reflect this. Then in 2020, there came the third and final instalment…

The Supreme Court’s decision

The Supreme Court were asked to consider three issues[2]:

1. Are damages to fund surrogacy arrangements using the claimant’s own eggs recoverable?
2. If so, are damages to fund surrogacy arrangements using donor eggs recoverable?
3. In either event, are damages to fund the cost of commercial surrogacy arrangements in a country where this is lawful recoverable?

Not to ruin the ending for anyone, but by a majority of 3-2 the Supreme Court upheld the Court of Appeal’s decision.

Surrogacy costs as a head of loss: the general principle

In reaching their conclusions, Lady Hale took her analysis back to first principles[3]: namely, that which was set out by Lord Blackburn in Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, 39:

“I do not think there is any difference of opinion as to its being a general rule that, where any injury is to be compensated by damages, in settling the sum of money to be given for reparation of damages you should as nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation.”

There are, of course, qualifications to this basic principle, i.e. reasonableness and if awarding such damages would be illegal or contrary to public policy.

Lady Hale first started with the wider question of whether it is ever possible to claim damages for the costs associated with a surrogacy arrangement (leaving aside whether or not the arrangement is a commercial one), which is legal in the UK and which involves XX’s own cryopreserved eggs. There seemed to be two limbs to her position that such costs are, in principle, recoverable:

Firstly, the changed attitude of society as a whole. Lady Hale concluded that whilst it may once have been the case that the law would and should not facilitate the birth of a child who would otherwise not have been born, the world we live in has changed. She noted that the Supreme Court were not bound by the case of Briody. In many respects, decisions made by judges are a product of their time and reflect the pervasive attitudes of the day. Lady Hale noted that since Briody was decided, it was inevitable that the ratio would be affected by developments in the law, and changes in social attitudes[4].

Secondly, it seems that for Lady Hale, the critical issue in Briody was whether there was a reasonable chance of a successful outcome. In Briody there was not, but in XX’s case, prospects of success were reasonable, if not good[5]. Lady Hale noted that at first instance Sir Robert Nelson found it difficult to see why, as XX’s prospects of success were reasonable, and XX’s cancer treatment had been delayed to ensure that her eggs were harvested, the claim should not succeed. McCombe LJ in the Court of Appeal also agreed with the basic premise, and Lady Hale went on to also agree[6].

Donor eggs

Lady Hale then turned to the issue of donor eggs. She acknowledged that her comment in Briody (that donor eggs were not truly restorative) was “probably wrong then and is certainly wrong now”[7]. Again, Lady Hale referenced the dramatic changes in societal attitudes of what constitutes a family and that, in many respects, the pleasure of bringing up children as one’s own is far and away the most important benefit of having children[8]. Biological makeup is less important in 2020.

Costs of a commercial surrogacy arrangement

For Lady Hale, the more difficult question was the costs associated with a foreign commercial surrogacy. She concluded that these were recoverable, noting that whilst surrogacy agreements are and always have been unenforceable, the commissioning parents can, however, seek a Parental Order and surrogacy agreements are a factor to be considered in any application for the same (though the child’s welfare will be the paramount factor). Finally, she noted that whilst it is unlawful for those aiming to make a profit to take part in or facilitate surrogacy, it is and never has been unlawful for the commissioning parent to make arrangements for a commercial surrogacy arrangement, be that in the UK or abroad.

Interestingly, Lady Hale also noted that many of the items claimed in the Californian commercial surrogacy were claimable in the UK i.e. fertility costs, “reasonable expenses” payable to the mother etc.. The items which were not recoverable in the UK were, in many respects, the administrative ones: fees to the US lawyers and the surrogacy agency. For Lady Hale a relevant question was to what extent should these two items taint the entirety of the bill? Coupled with the fact that the Courts have bent over backwards to recognise the relationships created by surrogacy, including foreign commercial surrogacy, governmental support for surrogacy as a valid form of creating a family relationship and the use of assisted reproduction techniques, Lady Hale concluded that it is no longer contrary to public policy to award damages for the costs of a foreign commercial surrogacy.

Lady Hale was at pains to stress that such damages will not always be awarded and she set out some important limiting factors:

1. Reasonableness of the proposed treatment(s);
2. Reasonableness of seeking a foreign as opposed to UK based surrogacy; and,
3. Overall reasonableness of costs.

The dissenting opinions

Where you have a difficult discussion involving public policy, there will always be differences of opinion. Lords Carnwath and Reed agreed with Lady Hale on all issues bar one: the costs associated with commercial surrogacy arrangements.

For Lord Carnwath the key issue was one of coherence, and in so far as is practicable, consistency throughout the law as a whole (criminal and civil). He considered that the question of recoverability of commercial surrogacy costs is not as simple as analysing whether XX’s actions of travelling to California and engaging in a commercial surrogacy was in and of itself a criminal act. Lord Carnwath’s view was that it would be contrary to the overarching principles of consistency and coherence in the law for the civil courts to award damages on the basis of conduct which, if undertaken in this country, would offend criminal law[9].

In addition to the above, Lord Carnwath also appeared to suggest that the dramatic developments in society’s approach to surrogacy are not as wide ranging or consistently accepted as Lady Hale was suggesting. In particular he noted that there had been no changes to the critical laws affecting commercial surrogacy, and public attitudes on surrogacy as a whole remain deeply divided.[10]

Comment

Call me a cynic, but I suspect if the world was not in the midst of a pandemic the headlines would have read: “Judges circumvent domestic law forcing a cash strapped NHS to pay for an illegal commercial surrogacy arrangement”. Yet if you look at the control mechanisms firmly installed by Lady Hale, I am not sure such “floodgates” arguments hold water (pun intended).

For a claimant to succeed in any claim for commercial surrogacy damages, there are three “reasonableness” hurdles to overcome before any award will be considered. For anyone working as a claimant solicitor, it can be hard enough to jump over one hurdle, let alone three!

Lady Hale’s penultimate paragraph is telling. She notes that just because an arrangement was permitted in California in XX’s case, it does not automatically mean that all Californian surrogacy arrangements will be reasonable. Courts will need to undertake a detailed consideration of the second hurdle: namely, it must be reasonable for the claimant to seek the foreign commercial arrangements proposed, rather than to make arrangements within the UK. That had not been considered in XX’s case. Is the inference from Lady Hale’s statement that XX may have failed at this hurdle? I would say yes, particularly in light of her comments surrounding Parental Orders in the family courts.

Furthermore, as XX was argued as a matter of principle, as opposed to the parties drilling down into the actual costs involved, there were no arguments advanced as to the overall reasonableness of the costs associated with XX’s Californian commercial surrogacy arrangements. Lady Hale concludes with an unequivocal statement that: “it should certainly not be taken for granted that a court would always sanction the sorts of sums of money which have been claimed here”[11].

This is not, in my view, a decision that gives claimant solicitors carte blanche to recover vast sums for commercial surrogacy arrangements. As has always been the case, individual factual circumstances will need to be considered. I also suspect that it will be necessary for personal injury and clinical negligence solicitors to speak with their family law colleagues regarding UK based surrogacy and the prospects of success in obtaining a Parental Order. My suspicion is that if the Court hears evidence that a Parental Order would, on the balance of probabilities, be granted, they may not consider a commercial surrogacy arrangement reasonable. Thus, any claimant would fail at the second hurdle.

[1] There is some debate as to whether “Star Wars” can correctly be described as a trilogy. If my maths is correct, there are 14 Star Wars films, and various spin off television series. Contrary to that view, some believe that the “Skywalker Saga” (not including the two anthology films of Solo and Rogue One) is actually a trilogy of trilogies. I will leave you to make us your own minds on this issue.

[2] Whittington Hospital NHS Trust (Appellant) v XX [2020] UKSC 14, 8

[3]Whittington Hospital NHS Trust (Appellant) v XX [2020] UKSC 14, 40-44

[4] Whittington Hospital NHS Trust (Appellant) v XX [2020] UKSC 14, 28

[5] Whittington Hospital NHS Trust (Appellant) v XX [2020] UKSC 14, 44

[6] Whittington Hospital NHS Trust (Appellant) v XX [2020] UKSC 14, 44

[7] Whittington Hospital NHS Trust (Appellant) v XX [2020] UKSC 14, 45

[8] Whittington Hospital NHS Trust (Appellant) v XX [2020] UKSC 14, 47

[9] Whittington Hospital NHS Trust (Appellant) v XX [2020] UKSC 14, 66

[10] Whittington Hospital NHS Trust (Appellant) v XX [2020] UKSC 14, 67

[11] Whittington Hospital NHS Trust (Appellant) v XX [2020] UKSC 14, 53