Scrutiny of Commercial Agency Fees

Background

The case concerned twin children born in California in July 2012 to two British men, MP and AH,,. The children were conceived via gestational surrogacy using an anonymous egg donor and the sperm of both applicants. The arrangements were facilitated by a California-based commercial organization.

While the surrogate mother received approximately $17,700 solely for reasonably incurred expenses (such as loss of wages and travel), the applicants paid $48,000 to the agency,,. This agency fee included a profit element of approximately $21,500, featuring contract fees and “gifts” used to expedite the process,,. Although the applicants held legal parentage under Californian law, they required a parental order in the UK to secure their lifelong legal relationship with the children.

Contentions of the Parties

The central legal issue was Section 54(8) of the Human Fertilisation and Embryology Act 2008 (HFEA 2008), which prohibits payments beyond “expenses reasonably incurred” unless authorised by the court,.

While previous case law focused primarily on payments to the surrogate mother, the court here had to determine if commercial profits paid to a third-party agency also fell under the scope of Section 54(8). The applicants admitted to the payments but contended they had acted in good faith within a legal commercial framework in California,.

The Judge’s Decision

Mrs. Justice Theis granted the parental orders and retrospectively authorised the $21,500 profit element paid to the surrogacy agency,,. The court satisfied itself that all other statutory requirements—including the biological link, the enduring relationship of the applicants, and the unconditional consent of the surrogate—had been met,,.

Reasoning of the Judgment

The court’s reasoning established several key principles regarding international commercial surrogacy:

• Broad Scrutiny of Payments: The judge ruled that Section 54(8) requires the court to investigate all payments made by applicants, including those to commercial organisations, not just payments to the surrogate,.
• Welfare as the Paramount Consideration: Following the 2010 regulations, the child’s lifelong welfare is the paramount consideration, outweighing public policy concerns unless there is a “clear case of abuse”,,.
• Authorization Criteria: The court found the payments authorised because:
  1. The sums were not disproportionate given the legal commercial framework in California, which is “driven by supply and demand”,,.
  2. The applicants acted in entirely good faith, were transparent with the authorities, and sought proper legal advice,.
  3. The surrogate herself acted altruistically, receiving no profit or “compensation element”,.
• Legal Security: The judge concluded that only a parental order could provide the children with the “long-term security and stability” they required,.

Conclusion

Re P-M confirms that the English court’s power to authorise surrogacy payments extends to the profit margins of commercial agencies. However, provided the arrangement is legal in its home jurisdiction and the applicants act with integrity, the court will prioritise the child’s welfare to ensure they are not left in a “legal vacuum” regarding their parentage.