Opinions as to the various legal, ethical and moral positions on couples entering into surrogacy arrangements in order to conceive a child often form the basis of heated debate.

In the Medical Indemnity space, we are seeing more cases where women (and their partners), who have lost their ability to carry or conceive a child due to alleged negligence by a health service provider, are claiming the costs associated with surrogacy arrangements.

Currently, altruistic surrogacy is the only form of surrogacy that is legal within Australia. Altruistic surrogacy means that the surrogate is not paid to “carry” the child, other than to cover reasonable medical and legal expenses. In Victoria, Tasmania, South Australia and Western Australia, however, residents are not prohibited from accessing commercial surrogacy arrangements overseas.

Reasonable medical and legal expenses

Under the Assisted Reproductive Treatment Regulations 2009 (Vic), prescribed costs incurred by the surrogate mother include any reasonable out of pocket medical expenses, any legal advice, and associated travel costs related to the pregnancy or birth.

As such, costs relating to:

  • IVF procedures, such as embryo freezing and thawing cycles or oocyte retrieval;
  • medical appointments/medications for both the commissioning parent/s and the surrogate mother before and during the pregnancy;
  • legal and counselling costs for the surrogate and the commissioning parent/s; and
  • travel costs for the surrogate and commissioning parent/s;

are likely to be recoverable by the commissioning mother (and any partner) who establishes a claim in negligence against their health service provider. Arguably, any such claim should be reduced by the out of pocket expenses that the mother would have incurred in achieving and carrying further pregnancies herself. There may also be debate as to the extent to which general damages should be reduced for restoring the prospect of having further children.

Whilst the costs of surrogacy in Australia are expensive, couples pursuing overseas surrogacy arrangements will likely encounter far higher costs. Insurers should be aware that there is uncertainty surrounding the issue of which costs will be deemed reasonable and therefore arguably recoverable by the plaintiff. For example, would ongoing expenses incurred by the commissioning parents for legal or medical complications arising from the arrangement be deemed compensable? There may also be evidentiary issues, for example the number of children a plaintiff claims she wished to have, and the number of IVF cycles likely to be required to achieve each pregnancy.

Insurers should also be aware that the legal status of overseas arrangements varies from country to country, and in many cases the state of the law is evolving rapidly. Overseas and domestic surrogacy agreements made in contravention of the local applicable laws will be void for illegality, and the costs may not therefore be recoverable.

The House of Representatives Standing Committee on Social Policy and Legal Affairs recently held an enquiry into surrogacy arrangements both in Australia and overseas. Its recommendations included that:

  • commercial surrogacy remain illegal in Australia;
  • the Australian Law Reform Commission conduct an in-depth 12 month review of current surrogacy laws throughout the States and Territories, with a view to informing and facilitating a national model law to streamline domestic surrogacy arrangements;
  • the Federal Government establish an interdepartmental taskforce to consider ways to protect the rights of children and surrogate mothers involved in overseas surrogacy arrangements, including conducting an audit of the practices employed in surrogacy destination countries to identify “high risk” destinations; and
  • the Department of Immigration and Border Protection be given powers to scrutinise whether domestic or international surrogacy laws have been breached when surrogate parents seek to bring a child into Australia, and where breaches are deemed to have occurred, to make determinations as to the best interests of the child, including custody.

While surrogacy is now clearly on the national agenda, it appears that reforms to clarify these highly emotive and legally complex issues are still some way off.