The Court of Appeal in XX v Whittington Hospital NHS Trust [2018] EWCA Civ 2832 has overturned the High Court’s decision ([2017] EWHC 2318 (QB)) by awarding damages to an infertile claimant for the costs of commercial surrogacy in California.

The first instance decision

In a previous blog post from September 2017 entitled Surrogacy: The Birth of a New Head of Loss, I discussed the first instance judgment in XX. Following the Trust’s admission that its failures led to Ms X’s infertility, Sir Robert Nelson awarded £74,000 to Ms X for the costs of UK-based surrogacy using her own eggs but not those of a donor. Claire Watson represented the Claimant at first instance.

Whilst the High Court’s decision was significant – this was the first case in which damages for the costs of UK surrogacy had been awarded – it was not the decision that Ms X wanted. She appealed to the Court of Appeal in order to recover the costs of Californian commercial surrogacy. The one-and-a-half-day hearing took place in early November and judgment was handed down on 19 December 2018. On appeal, Claire was led by Christopher Johnston QC.

Commercial surrogacy arrangements are lawful and binding in California, which has a well-established system. In contrast, only non-commercial surrogacy is permitted in the UK, and all surrogacy arrangements are unenforceable. The Law Commission has noted that there are ‘significant problems’ with the Surrogacy Arrangements Act 1985 and it aims to publish a consultation paper on law reform by spring 2019.

At first instance, Sir Robert Nelson commented that it may be right to say ‘that attitudes have changed and are indeed changing in relation to surrogacy but such change must be brought about by the Law Commission and Parliament, or perhaps the Supreme Court’ [48]. He felt bound by Hale LJ’s judgment in Briody v St Helen’s and Knowsley Area Health Authority [2001] EWCA Civ 1010 and held that commercial surrogacy arrangements are contrary to public policy because they are still illegal in the UK. The judge gave Ms X permission to appeal.

The appeal

Two of Ms X’s principal arguments on appeal were that:

  1. The ratio of Briody was simply that the claimant’s prospects of successful surrogacy were so ‘vanishingly small’ that the expenditure was not reasonable and, therefore, not recoverable in damages. In contrast, Ms X’s chances were significantly better; the expert evidence was that she would probably achieve two live births [42].
  2. The comments in Briody as to public policy were obiter dicta and, in any event, the legislative and public policy developments surrounding surrogacy in the UK – together with the Supreme Court’s decision on illegality in Patel v Mirza [2016] UKSC 42 – mandate that the bar to recovering damages for commercial surrogacy in California should be removed. Ms X proposed to do nothing that was illegal. Moreover, third party surrogacy relationships are now permitted in the UK in limited circumstances and the family courts regularly sanction overseas surrogacy arrangements by way of parental orders. Ms X’s proposals for Californian commercial surrogacy were therefore not contrary to public policy [43-45, 55-57].

The Trust disputed these submissions and cross-appealed, arguing that the judge’s limited award of damages for non-commercial surrogacy in the UK was wrong or, alternatively, that damages for PSLA should not have reflected Ms X’s complete infertility and should be reduced accordingly.

The conclusion

Ms X was successful on each of her arguments. The Court unanimously allowed the appeal and dismissed the Trust’s cross-appeal (except to the extent that general damages for PSLA were reduced by £10,000). I will discuss some of the core issues raised by the judgment in relation to (i) public policy, (ii) conflict of laws, (iii) damages in tort and (iv) PSLA.

It should be noted that the Trust was refused permission to appeal by the Court of Appeal. Whether an application will be made to the Supreme Court is not currently known.

(i) Public policy

McCombe LJ, who gave the lead judgment, noted that ‘there is plenty of judicial authority, arising from the diversity of the family in modern society, which requires the court to ask itself, when such questions arise in contexts such as the present, whether the law is achieving a necessary coherence and consistency in sticking rigidly to a perception of public policy formulated even a few years ago’ [54]. Clearly, the Court considered that applying the public policy arguments in Briody would be unnecessarily rigid.

Having considered the Supreme Court’s decision on the concept of illegality in Patel (to which Sir Robert Nelson was not referred at first instance), McCombe LJ noted that the Court of Appeal had a ‘fresh opportunity’ to examine the public policy arguments in this case [57]. Bound by Patel, the Court accepted Ms X’s submission that that case puts her own claim ‘in a different light from that which shone upon this court in Briody’ [68]. It would be incoherent to deprive Ms X of her claim for Californian commercial surrogacy in circumstances where ‘she personally proposes no wrongdoing, either under Californian law or under our own law’ [68].

McCombe LJ rightly noted that public policy ‘is well-recognised to be variable and is not ossified for all time, once identified in any particular context’ [64]. The Court of Appeal’s decision in XX is a clear reflection of this. There is no longer a bar, on public policy grounds, to the recovery of damages for the costs of commercial surrogacy in California [81].

However, the Court’s decision emphasises that this case does not provide an automatic right to overseas or UK surrogacy damages, either to the extent awarded to Ms X or otherwise. Future claimants will need to prove the reasonableness of their various proposed ‘surrogacy and medical steps’ if they are to succeed [96]. It should be noted that the Court of Appeal was not asked to comment on the reasonableness of Ms X’s particular proposals for achieving a four-child family.

(ii) Conflict of laws

In the course of preparing for the hearing of the appeal, the Court asked for further submissions from the parties in relation to a ‘conflict of laws’ point, which is quite an unusual (but interesting) topic to discuss in the context of a clinical negligence case.

The Court was persuaded to agree with the commentary in Dicey, Morris & Collins on the Conflict of Laws (the leading textbook on private international law) that a contract which would be lawful abroad but unlawful in the UK would be enforceable ‘unless inconsistent with the fundamental public policy of English law’. All of the examples of such inconsistency in that textbook were ‘on a far higher plane of unacceptability than public policy against surrogacy (if any) in this country’ [77].

Having been referred to the nearly 110-year-old gambling loan case of Saxby v Fulton [1909] 2 KB 208, McCombe LJ concluded that ‘the general rule indicates that the English rules of conflict of laws do not frown unnecessarily adversely upon contracts lawfully made abroad’ [80]. Importantly, Ms X was not asking for the Court to enforce a surrogacy agreement against the Trust; she simply wanted to recover the likely costs of such an agreement. This was another reason for removing the bar to recovering the costs that Ms X was seeking.

(iii) Damages in tort: ‘own egg’ and ‘donor egg’ surrogacy

The Court’s hands were not tied by Briody in respect of Ms X’s desire to recover damages for ‘own egg’ surrogacy. She argued, and it was accepted, that her chances of success for an ‘own egg’ procedure were so much greater than the ‘vanishingly small’ chances in Briody. Expenses for own egg surrogacy were therefore held to be recoverable [84]. The Court of Appeal agreed with Sir Robert Nelson in this regard.

As for ‘donor egg’ surrogacy (in which Ms X’s partner’s sperm would be used with a donor’s egg), the Court overturned the judge’s decision. The crux of both parties’ submissions was the long-established ‘restitutionary’ principle of tortious damages. Whilst the question of restorative compensation was a matter of the correct application of a rule of law rather than assessment of public policy, the shift in social attitudes and the legislative developments surrounding surrogacy could rightly be taken into account in considering whether the compensation that Ms X claimed was truly restorative of her pre-tort position [93]. Ultimately, the Court held that the distinction between ‘own egg’ and ‘donor egg’ surrogacy was artificial, and it decided to depart from Hale LJ’s dicta in Briody [94, 105]. Damages for the cost of donor egg surrogacy would put Ms X ‘as nearly as possible’ in the same position as she would have been but for the Trust’s negligence [91, 100].

(iv) PSLA

At first instance, Sir Robert Nelson awarded damages for pain, suffering and loss of amenity (‘PSLA’) in the sum of £160,000, comprising £145,000 for Ms X’s life-changing injuries and £15,000 for the loss of her claims for surrogacy in California and provisional damages for psychological sequelae.

As Ms X’s appeal was allowed and special damages for commercial surrogacy in California would be awarded, Nicola Davies LJ held that there should be a reduction in the total award of £160,000 but account should nevertheless be taken of the risk of failure in the surrogacy procedures. £150,000 was the appropriate award for PSLA [113].

Nicola Davies LJ agreed with Sir Robert Nelson that ‘there is no comparable authority as to the nature and extent of the injuries sustained by this claimant’ [111]. Therefore, the XX decision may itself be a useful indicator of the likely level of general damages in future cases of a similar nature.

Commentary: what next?

The Court of Appeal’s decision will no doubt be of interest to lawyers who are involved in cases where the alleged failures of the defendant are said to have caused the claimant to be infertile. Arguments similar to Ms X’s will not automatically succeed in every case, particularly where there is insufficient evidence of the reasonableness of pursuing surrogacy or, indeed, commercial surrogacy in California (or elsewhere). It is also clear that claimants will need to have reasonable prospects of successful live births.

Ultimately, claimants should take great care to ensure that they can answer the following questions affirmatively and with robust evidence:

  1. Would an attempt to achieve a particular kind of family (e.g. a four-child family) be ‘reasonable in all the circumstances’?
  2. Do ‘the various surrogacy and medical steps’ which they are proposing constitute a ‘reasonable way of achieving the result [in (i)], such that damages should be awarded on that basis’? [96]

I suspect the Court of Appeal’s judgment will also be of some interest to the Law Commission in relation to their project on surrogacy law reform. The decision in XX clearly demonstrates that the courts are aware that social and legislative attitudes regarding surrogacy have shifted, and that ‘public policy’ considerations in the law should develop as a result.

However, whilst the judgment may be said to indirectly highlight the inadequacies of the UK surrogacy regime, the ratio of the case is ultimately based upon the application of established legal principles. The judges were not tasked with weighing up the merits/disadvantages of UK and Californian surrogacy. Instead, they were (i) faced with a different factual matrix to that in Briody and (ii) clearly bound to follow the Supreme Court’s decision in Patel. That extensive judgment was crucial to the Court’s decision; as McCombe LJ recognised, ‘one now needs to see the concept of illegality, as a defence to a civil claim of whatever nature, through rather differently shaded spectacles from before’ [65]. Consequently, Hale LJ’s judgment in Briody had to be read with this in mind.

Seen in this light, despite the fact that we can say that ‘this is the first case in which damages for Californian commercial surrogacy have been awarded’, XX is not a surprising decision. No new legal principles have been created.

Chris and Claire were instructed by Alison Eddy and Anne Kavanagh of Irwin Mitchell. The Trust was represented by Lord Faulks QC and Charles Feeny, instructed by Daniel Morris of Bevan Brittan.

Written by Anthony Searle.