As many people considering a surrogacy arrangement will know, any form of commercial payments are illegal in England and Wales, although this is not the case in all jurisdictions. In some countries, it is usual and indeed required, for additional payments to be made, most usually to surrogacy agencies.

Any parents who have had a child by a surrogacy arrangement need to acquire a Parental Order from the court here in order to become the child's legal parents in place of the surrogate (and if applicable, her partner). This is necessary even if the intended parents are already recognised as the child's legal parents under local law in the country the child was born, and irrespective of if they are biologically related to the child, but the surrogate is not.

The issue of what payments have been made and in particular 'reasonable expenses' is crucial to the court's consideration of whether or not a parental order should be made following a surrogacy arrangement.

It is one of the required factors for the making of a parental order, set out in s54 of the HFEA 2008 that no more than reasonable expenses should have been paid in respect of the arrangement, unless any additional payments are retrospectively sanctioned by the court. Past cases confirm that the courts will sanction payments over and above reasonable expenses in circumstances where they can be assured that they were made in good faith and did not influence the surrogate's willingness to provide consent, but that they will always scrutinise very carefully exactly what has been paid, for what purpose, and how this amount relates to the cost of living in the local area.

There has not however been a great deal of guidance in case law about what level of payments constitutes reasonable expenses in England & Wales. Recently however, the High Court considered in some detail the level of payments made by 2 intended parents to 3 surrogates in England, each in the region of £15,000. Russell J conducted a detailed analysis of how the amounts had accrued with reference to medical and travel expenses, costs of clothing and meals together with equipment needed for the pregnancy and lost earnings and considered that in the circumstances of the case, the amounts paid were reasonable in reference to expenses. In doing so, she did however stress that there is no set amount which will be deemed reasonable or unreasonable, and that each case will need to be considered on the specific facts.

The case also highlights the need for all involved in surrogacy arrangements to be honest and open about exactly payments have been made, and the potential for there to be serious consequences, including parental orders not being made, if anything untoward has taken place.