Johnstone, Amy --- "Compensating Infertility: Claiming the Cost of Commercial Surrogacy in Australia After Whittington Hospital Nhs Trust v Xx" [2023] PrecedentAULA 32; (2023) 176 Precedent 30

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Compensating infertility

Claiming the cost of commercial surrogacy in Australia after Whittington Hospital NHS Trust v XX

By Amy Johnstone

Under the compensatory principle, a plaintiff who has been left infertile as a result of a defendant’s negligence can obtain damages to put them back in the position they would have been had the tort not been committed. This can include the costs associated with fertility services. But under Australian law, can the costs of commercial surrogacy arrangements overseas be recovered when such arrangements are criminalised in Australia?

The costs of fertility and reproductive treatments have been recognised as reasonable medical expenses in personal injury claims where a tortious act has caused infertility.^[1] One such ‘treatment’ that a plaintiff may wish to pursue is surrogacy; that is, an altruistic or commercial agreement for another woman to become pregnant with the intention of transferring custody of the child to the intended parent/s at birth.

However, finding a local surrogate can be difficult, and with commercial surrogacy arrangements criminalised in Australia, many Australians seek such arrangements overseas.

Australian courts have not yet dealt with a claim for the cost of becoming a parent through surrogacy. However, in the United Kingdom (UK), the Supreme Court decision of Whittington Hospital NHS Trust v XX^[2] (Whittington) provides useful guidance on how such a claim might be addressed in Australia.

SURROGACY OPTIONS AVAILABLE TO INJURED PLAINTIFFS

According to the Australia and New Zealand Assisted Reproduction Database, in 2020 there were 91 surrogacy births in Australia and New Zealand where conception occurred in an IVF clinic.^[3] Such arrangements are considered ‘altruistic’, in that the surrogate may only be reimbursed for her reasonable expenses in Australia^[4] Any additional payments would make the surrogacy arrangement ‘commercial’, with such arrangements now criminalised in all Australian states and territories.^[5] Further, it is illegal for residents of the ACT, NSW and Queensland to enter into commercial surrogacy arrangements overseas.^[6]

However, Australian residents regularly enter commercial surrogacy arrangements in foreign countries where such arrangements are lawful.^[7] According to the Department of Home Affairs, in 2019–20 (that is, before the COVID-19 pandemic), 276 children born overseas through surrogacy arrangements were approved as Australian citizens by descent.^[8] This number is significantly higher than the 91 altruistic surrogacy births in Australia in the same year.^[9]

When seeking damages for the loss of ability to carry one’s own children in a personal injury claim, the question of whether the costs of surrogacy arrangements, either altruistic or commercial, can be claimed may have a significant impact on the quantum of a claim and on the plaintiff’s ability to pursue their preferred approach to creating a family following their injuries.

WHITTINGTON HOSPITAL NHS TRUST v XX

The UK Supreme Court decision of Whittington related to a five-year delay in diagnosis of cervical cancer. The claimant, who was 29 years old at the time the negligence was discovered, underwent egg retrieval followed by surgery and chemo-radiotherapy, which resulted in injuries that left her unable to bear her own children.

The respondent hospital admitted negligence at first instance in the England and Wales High Court (Queens Bench Division) in 2018, and the Court found that, had appropriate action been taken, there would have been a 95 per cent chance of a complete cure.

The issues on appeal were the appropriate damages payable for the claimant’s loss of ability to bear her own child. The claimant sought damages for the cost of commercial surrogacy arrangements using her own eggs or donor eggs and a surrogate in California. She gave evidence that she and her partner had always wanted a large family and that they wanted four children. The expert evidence from the parties’ consultant gynaecologists was that it was probable the couple could have two children using the claimant’s frozen eggs and a further two children using donor eggs.

At first instance, the claim for commercial surrogacy costs had been rejected on the basis that it was contrary to public policy and that using a surrogate and donor eggs was not restorative of the claimant’s fertility. Instead, the costs of non-commercial (that is, altruistic) surrogacy using the claimant’s eggs was awarded.^[10]

The claimant appealed against the denial of her claim for commercial surrogacy and the use of donor eggs. The Court of Appeal allowed her appeal on both issues, noting that public policy was not fixed in time and using donor eggs could now be regarded as restorative.^[11]

The hospital then appealed to the UK Supreme Court against the claims for surrogacy arrangements using the claimant’s own eggs and donor eggs and funding commercial surrogacy.

Giving judgment for the majority, Lady Hale noted that damages in tort seek to put the injured party in the position she would have been had she not been injured (that is, the compensatory principle). However, she cautioned that damages cannot be recovered where it would be contrary to legal or public policy, or unreasonable.^[12] The Court held that despite commercial surrogacy being banned in the UK, nothing that the claimant proposed to do involved a criminal offence either in the UK or abroad.^[13]

In looking at the issue of own-egg surrogacy, the Court noted that whether seeking to remedy the loss of a womb through surrogacy was reasonable depended on the chances of a successful outcome. Here, those chances were reasonable, so it was difficult to see why the claim should not succeed.^[14] The Court held that damages for the reasonable costs of donor-egg surrogacy may also be awarded if the arrangement has reasonable prospects of success, ifthat would be closest to putting the plaintiff in the position she would have been if she had not been injured.^[15]

On the issue of international commercial surrogacy, the Court noted that assisted reproduction has become widespread and socially acceptable, and pointed to legal developments towards recognising surrogacy arrangements, concluding that ‘it is no longer contrary to public policy to award damages for the costs of a foreign commercial surrogacy. However, that does not mean that such damages ... will always be awarded.’^[16]

The Court went on to identify three important limiting factors:

1. The proposed course of treatment must be reasonable, including the proposed number of children.

2. It must be reasonable to seek foreign commercial arrangements rather than make local arrangements. In particular, it was noted that a foreign arrangement was unlikely to be reasonable unless the country had a well-established system protecting the interests of all involved.

3. The costs involved must be reasonable.

WHITTINGTON’S RELEVANCE TO AUSTRALIAN CASES

The context in which Whittington was decided must be distinguished from the way surrogacy is dealt with in Australia. In particular, the UK has not criminalised parents commissioning surrogacy arrangements on an altruistic or commercial basis, locally or abroad. Instead, such arrangements are merely unenforceable, with one of the conditions for the transfer of legal parenthood by a parental order being that only ‘reasonable expenses’ are paid, with any further payments resulting in the possible refusal of a parental order.^[17]

In contrast, in Australia, all states and territories have criminalised commercial surrogacy arrangements.^[18]

The Supreme Court’s conclusion in Whittington was based in part on a number of legal and policy developments towards recognising surrogacy arrangements in the UK,^[19] which led the Court to find that it was no longer contrary to public policy to claim international commercial surrogacy arrangements. The same may not be said in Australia, where the legal position on commercial surrogacy remains clear.

However, following the UK Supreme Court’s decision in Whittington, Harold Luntz and Sirco Harder noted:

[INDENTED QUOTE]

‘where the plaintiff intends to enter into a surrogacy arrangement overseas and no person will commit a criminal offence by participating in it, recovery of the plaintiff’s expenses under the law of an Australian jurisdiction ... should not be denied simply because a criminal offence would be committed if the arrangement took place in the Australian jurisdiction. Rather, it should be asked whether an award of damages in the particular case would offend the public policy of the jurisdiction whose law governs the defendant’s liability.’^[20]

Therefore, where international commercial surrogacy is not an offence, the costs would arguably be recoverable if they can also be shown to be reasonable. However, practitioners should carefully consider the surrogacy laws in their state or territory, in particular, NSW, Queensland and the ACT, where residents cannot legally pursue commercial arrangements overseas, even if such arrangements are lawful in that overseas jurisdiction.^[21] That is, an offence will be committed where the person involved in such arrangements is an ordinary resident in NSW, Queensland or the ACT. Therefore, plaintiffs in these jurisdictions likely cannot recover the cost of an overseas commercial surrogacy arrangement, as it would be contrary to legal and public policy. Nevertheless, the costs of lawful forms of surrogacy arrangements, including international altruistic arrangements, could still be recoverable.

Ultimately, claims for the costs of surrogacy will come back to the same basic principles applying to all special damages claims. In particular, the onus is on the plaintiff to prove, on the balance of probabilities, that the need claimed, and the associated cost or expenditure, are reasonable.

THE TEST OF REASONABLENESS

A plaintiff who has been left infertile as a result of a defendant’s negligence will be seeking damages to put them back in the position they would have been had the tort not been committed. The test is one of reasonableness, rather than what would be ideal, so that the defendant is not liable for every expenditure that would be advantageous for the plaintiff. That said, a claim will not be excessive merely because it could be performed more cheaply. But the likely success of the procedure is relevant. If the cost is very great and chances of success slight or speculative, the cost-involving treatment may be unreasonable.

As seen in Whittington, the following issues will likely be relevant to the question of reasonableness in surrogacy claims:

• the probability of success of egg retrieval and embryo transfer;

• the reasonableness of seeking particular surrogacy arrangements; and

• the number of pregnancies it is reasonable to claim for.

Probability of success

Where the benefits of a treatment are ‘slight or speculative’, claiming the costs associated with that treatment are likely to be found to be unreasonable.^[22] Therefore, the chance of success of any claimed course of treatment in the particular circumstances of the case will be relevant to whether it will be found to be reasonable. The plaintiff’s age, previous obstetric history and whether she has already undergone egg retrieval should be considered, with expert evidence obtained on the likely success of the proposed arrangements. For example, in Whittington, the claim was supported by expert evidence that showed that, on the balance of probabilities, the plaintiff could have two children using her own cryopreserved eggs and two further children using donor eggs.

Defendants may argue this point, especially in the case of an older plaintiff. Current research published in the Medical Journal of Australia suggests that women aged 40–44 have an 11 per cent chance of a live birth in their first cycle of IVF, and a cumulative live-birth rate of between 21–34 per cent after six cycles.^[23]

Nevertheless, the difficulties of low success rate on any given round of IVF arguably provide a basis to claim a premium service or higher number of egg retrievals, and expert evidence should be obtained to support such a claim. In the alternative, if the expert evidence concludes that the chances of success are so low as to make such a claim potentially unreasonable, plaintiffs may consider claiming instead for the loss of ability to have children as part of an assessment of general damages and loss of enjoyment of life.

Reasonableness of claiming commercial as opposed to altruistic surrogacy

Keeping in mind the discussion of legality above, the reasonableness of claiming foreign commercial surrogacy costs over the cost of domestic, altruistic arrangements will depend on the circumstances of the case. A claim will not be unreasonable merely because a cheaper option is potentially available.^[24]

However, the plaintiff will still need to establish that the cost is reasonable. For example, the plaintiff may give evidence that they do not know anyone in Australia that they could ask to be an altruistic surrogate. Without a known surrogate, it is less likely the plaintiff could have children using altruistic surrogacy in Australia.

In Whittington, the claimant’s evidence about her reasons for preferring to seek a surrogate in California over the UK were relevant to whether the costs were reasonable. She gave clear evidence about legal protections available in California, including the ability to obtain a pre-birth order confirming the intended parents’ legal status in relation to the unborn child, and further evidence that the requirement for a surrogate mother to choose the intended parent under the ‘friendship model of altruistic surrogacy’ in the UK frightened her.^[25]

In order to be considered reasonable, the plaintiff would likely also need to be proposing commercial surrogacy in a country with a well-established system in which the interests of all involved, including the child, are properly safeguarded.

Reasonable number of pregnancies to claim

The reasonableness of the number of surrogacy arrangements should also be considered. The plaintiff will need to establish that if not for the defendant’s negligence, she would likely have had children (or additional children) and the likely number. The claimant in Whittington gave evidence that both she and her partner came from big families and had both always wanted a large family themselves.

APPLICABLE DEDUCTIONS

Where the cost of a surrogacy arrangement is recoverable, there may be a deduction of the amount of expenses that the plaintiff would have incurred had she carried the child or children herself.^[26]

Such a deduction was not made in the first instance or the initial appeal in Whittington.^[27] Although no explanation was given by the UK High Court or Court of Appeal, one explanation may be that the claimant, had she been pregnant, would have made use of the free services of the UK’s National Health Service.

A similar argument should be made in Australian cases where relevant. For example, where the plaintiff does not hold private health insurance, and/or where a previous pregnancy was managed through the public system and she would have made use of the same services in subsequent pregnancies, no deduction should be made for the costs of carrying a child herself.

CONCLUSION

While, in Whittington, the UK Supreme Court awarded the costs of international commercial surrogacy, it should not be assumed such damages will be available in Australia. In particular, practitioners should carefully consider the relevant local legislation in relation to surrogacy to ensure the claimed surrogacy arrangements do not involve a criminal offence.

Courts will consider the reasonableness of surrogacy costs in awarding damages. In preparing such a claim, plaintiffs should provide clear instructions about the surrogacy arrangements sought and their reasons for this, with expert evidence obtained to support the chances of success and set out detailed costing.

Amy Johnstone is a barrister in Melbourne. EMAIL [e-mail].

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NOTES

¹ See, eg, Scarf v Qld [1998] QSC 233.

^[2] [2020] UKSC 14.

^[3] JE Newman, RC Paul, GM Chambers, Assisted Reproductive Technology in Australia and New Zealand 2020, UNSW, Sydney, October 2022, 45 <npesu.unsw.edu.au/sites/default/files/npesu/data_collection/Assisted%20Reproductive%20Technology%20in%20Australia%20and%20New%20Zealand%202020.pdf>.

^[4] Parentage Act 2004 (ACT), s40; Surrogacy Act 2010 (NSW), s7; Surrogacy Act 2022 (NT), s12 (commencing 21 March 2024); Surrogacy Act 2010 (Qld), s11; Surrogacy Act 2019 (SA), s11; Surrogacy Act 2012 (Tas), ss8, 9, 10. See also Human Assisted Reproductive Technology Act 2004 (NZ) s14.

^[5] Assisted Reproductive Treatment Act 2008 (Vic), s44; Surrogacy Act 2010 (NSW), s8; Surrogacy Act 2010 (Qld), s56; Surrogacy Act 2019 (SA), s23; Surrogacy Act 2012 (Tas), s40; Surrogacy Act 2008 (WA), s8; Parentage Act 2004 (ACT), s41; Surrogacy Act 2022 (NT), s48.

^[6] Surrogacy Act 2010 (NSW), s11; Surrogacy Act 2010 (Qld), s54(b); Parentage Act 2004 (ACT), s45.

^[7] Note: It is not within the scope of this paper to consider the reasonableness of surrogacy laws in Australia or overseas.

^[8] Department of Home Affairs, The Administration of the Immigration and Citizenship Programs, 6th ed, Australian Government, Canberra, March 2021. See also discussion at <https://www.sarahjefford.com/how-many-surrogacy-births-are-there-in-australia>.

^[9] JE Newman, RC Paul, GM Chambers, op cit, 45.

^[10] XX v Whittington Hospital NHS Trust [2017] EWHC 2318 (QB); [2018] PIQR Q2.

^[11] XX v Whittington Hospital NHS Trust [2018] EWCA Civ 2832; [2019] 3 WLR 107.

^[12] [2020] UKSC 14 at [41–43].

^[13] Ibid [40].

^[14] Ibid [44].

^[15] Ibid [48].

^[16] Ibid [53].

^[17] Human Fertilisation and Embryology Act 2008 (UK), s54(8). See further discussion in K Horsey and A Powell, ‘A Step Too Far? Whittington Hospital NHS Trust v XX [2020] UKSC 14’, Medical Law Review, Vol. 29, No. 1, 2021, 172–184.

^[18] See above notes 4 and 5.

^[19] For example, since the 2008 amendments to the Surrogacy Arrangements Act 1985 (UK), non-profit-making bodies may advertise, initiate negotiations and compile information regarding surrogacy for reasonable payment.

^[20] H Luntz and S Harder, Assessment of Damages for Personal Injury and Death, 5th ed, LexisNexis, Chatswood, 2021, 531, [4.8.5].

^[21] Surrogacy Act 2010 (NSW), s11; Surrogacy Act 2010 (Qld), s54; Parentage Act 2004 (ACT), s45.

^[22] Sharman v Evans [1977] HCA 8; (1977) 138 CLR 563.

^[23] G Chambers, ‘Women now have clearer statistics on whether IVF is likely to work’, The Conversation, 24 July 2017, <https://theconversation.com/women-now-have-clearer-statistics-on-whether-ivf-is-likely-to-work-81256>.

^[24] Sharman v Evans [1977] HCA 8; (1977) 138 CLR 563.

^[25] [2020] UKSC 14 at [22].

^[26] H Luntz and S Harder, op cit, 533, [4.8.5].

^[27] [2017] EWHC 2318 (QB); [2018] PIQR Q2; [2018] EWCA Civ 2832; [2019] 3 WLR 107 [53]. The issue was not raised in the further appeal.