At 15, Natalie Smith discovered that she had no womb: “There you are, growing into a woman, and suddenly you find out that you can’t have children. You’ve never really thought about having children at that point, but what you realise is that it has always been there, that assumption that you will.”

The condition was a result of a birth disorder called Mayer-Rokitansky-Küster-Hauser syndrome (MRKH), and the diagnosis was devastating: “It changed everything. It shifted my values, it exploded my friendships.”

Now 34, Smith is sitting in her sunny suburban kitchen with her four-year-old twins playing in the room next door. The girls are the result of a surrogacy arrangement. “It was after I got married, and I was seeing a counsellor because I was still so angry about the MRKH. And the last thing my therapist said to me was, ‘What are your thoughts about surrogacy?’ I said, ‘I’m worried I’ll have no control, that people will take advantage of us.’ It was all negative, and my therapist said, ‘Have you ever considered that surrogacy might be a positive experience?’ And it was. It was an incredibly positive experience.”

Under British law, commercial surrogacy is prohibited: agencies are not allowed to advertise for surrogates or profit from their services, and surrogates cannot charge a fee. So Smith and her husband Jon had a choice: find someone in the UK altruistic enough to carry their child for expenses only, or go overseas, somewhere where surrogacy is big business, such as India, Russia, Ukraine or – for those who can afford it – the US, where agencies often charge more than $100,000 (£65,000).

They got in touch with Surrogacy UK (SUK), a self-help organisation that runs social events where “intended parents” and potential surrogates can meet; it also provides support once a match is made. The couple threw themselves into the socials. “We cleared our calendar, thinking we must maximise our exposure,” Smith says. “SUK etiquette is that you never ask a surrogate to help you, so the first few socials were horrific, because you’re thinking, ‘Pick me, pick me.’ ”

We chatted for seven hours. It was very like meeting my husband, that feeling she was The One

Then they met Jenny French, 28, a healthcare worker on an end-of-life ward, and the mother of three boys. “We chatted nonstop for seven hours,” Smith says. “It was very like when I met Jon – it was that feeling of meeting The One. We got the call the next day telling us she’d like to be our surrogate.”

Surrogacy has been called “the fertility treatment time forgot”. While the law governing other fertility treatments has evolved in response to scientific, technological and social changes, British surrogacy law has remained fundamentally unaltered for 30 years. Intended parents, surrogates, some MPs and many within the legal profession now agree it must be changed. But while some advocate the adoption of a commercial model similar to that seen in some US states, Natalie Smith and SUK (of which she is now a trustee) vehemently resist this, arguing in a report released this week that altruism must remain at the heart of British surrogacy law. “The whole ethos of SUK is ‘friendship first’,” Smith says. “We must avoid reforms that would embed a commercial approach: contracts, transactions, profiteering.”

With SUK, after a surrogate offers to help, there is a three-month “getting to know you” period. “Pulling out during that time would be very difficult,” French says, “but surrogacy is a long journey, and if something’s not quite right, you shouldn’t go ahead.”

If all goes well, a surrogacy agreement is then drawn up. Every detail is considered, Smith says: “The levels of contact during the pregnancy and after the child is born; everyone’s feelings about diet, smoking, drinking; whether termination would be considered in this or that circumstance, and so on.” It is also at this point that expenses are agreed.

Under UK law, these agreements are not legally binding. The surrogate and her husband (if she is married) will be the legal parents of the child, even though it must by law have been created using the intended parents’ egg, sperm or – as in Natalie and Jon’s case – embryos. To become the child’s legal parents, the intended parents must apply to the courts for a parental order between six weeks and six months after the child is born. This terrifies many, who fear the surrogate could decide to keep the child, and is one reason some British couples decide to go abroad, despite the costs.

But Smith thinks it is a good thing. “A written letter of intent? Absolutely. A contract? No. I hate the word.”

Natalie Smith and the twins.

After the agreement was made, two of Natalie and Jon’s embryos were transferred to French’s womb. “Jenny, Jon and I were all in a room together when the embryos were transferred; we went to every single scan. Whenever the twins moved, Jenny would phone.” By the time the twins were born by caesarean section, Smith says she knew them already.

She shows me a photograph: French is lying on an operating table moments after the surgery, smiling; Smith sits beside her with a tiny swaddled baby in the crook of each arm. Her eyes are enormous and full of tears.

Since giving birth to the twins, French has donated her eggs to another infertile couple (resulting in the birth of a boy, now 18 months old) and given birth to another surrogate baby, Hope, who was conceived using French’s egg and is therefore her biological child. This made no difference to how she thought about the pregnancy, or the baby, French says. Parenthood is not about genetics or growing a child in your womb, she insists: “It is about intention.”

But surrogacy is an emotional commitment, all the same. “It took a good couple of years to have Hope,” French says. “We started doing IVF with my eggs. We had two miscarriages, so we reverted to home insemination. It was a rollercoaster of emotions for everybody, so we were relieved when she finally arrived.” French expressed milk for Hope for several months.

Each new baby is introduced to French’s boys, who were two, four and nine when the Smith twins were born. “My eldest was like, ‘As long as you’re not going to bring it home and let it play with my toys, I’m happy.’” French and her sons have an ongoing relationship with all the families she has helped: “I regard the children like nieces and nephews.” She separated from her husband after Hope was born – an amicable separation, she says, that had nothing to do with surrogacy; but she still invites him over whenever she has Natalie, Jon and the twins around. “He was part of it. We all get on.”

Jenny French: ‘Surrogacy is a long journey.’ Photograph: Ben Quinton for the Guardian

French’s expenses include loss of earnings, maternity clothes, fares to hospital appointments and a few takeaways in the weeks after the birth, when she is sometimes too tired to cook for her children: nothing excessive. She clearly doesn’t do it for the money, so what motivates her?

“I fell pregnant easily with my oldest son, but struggled to conceive my second,” she explains. “It gave me an understanding of women who couldn’t get pregnant. So when I eventually had my second and then my third, I felt so lucky. I thought, ‘Now I have everything, and I could help someone else.’ ” So she did. “And it is great to watch them become a family, every time.”

When we talk, French has just found out that the baby she is carrying for a fourth couple has no heartbeat and she will soon miscarry. It is very sad for them all, French says, but she will try to conceive again as soon as she can. “You keep going,” she says, “and you do it because the end goal is that they will have their family.”

People misunderstand surrogates, Smith says. “Everyone imagines this poor woman who has this baby ripped from her and given to these randoms. But for Jenny it was the exact opposite – what drives her is that moment when she saw the look on my face as I held my babies. She loves the girls, but like an auntie. It’s absolutely not nothing, but it is not complicated.”

“Surrogacy is about friendship,” French says simply. The trouble is, sometimes friendships fall apart, with catastrophic consequences.

***

On 27 January 2014, baby M was born. She was conceived using an insemination kit bought over the internet. Her mother and father had been friends for many years. These are just about the only facts about this little girl on which her parents now agree. The names of the child and her parents cannot be published for legal reasons, but even the baby’s name is the subject of a dispute between her mother, S, and her father, H.

‘She loves the girls, but like an auntie.’ Photograph: Ben Quinton for the Guardian

According to H, who is gay, he and his partner entered into a surrogacy arrangement with S. She had agreed to give the baby to them to raise. According to S, there was never any surrogacy agreement. Instead, she says that she and H – a friend for 25 years – had a co-parenting agreement, by which they would raise the child together, “like two heterosexual parents that have a child and are separated”.

Unsurprisingly, given the gulf between the two stories, the case eventually came to court when the child was 15 months old. The father and his partner were represented by a QC; the mother represented herself for most of the proceedings.

The judge, Ms Justice Russell, made it clear that although the issue to be decided was residency and contact arrangements for the child, not legal parentage, the determination of who was telling the truth was fundamental to any decision about the child’s best interests.

From the first day, S says, she felt the judge had already made up her mind: “The way she looked at me, the way she spoke with me… and then the way she looked at [H and his partner], spoke with them.”

After a five-day hearing, the judge sided with the father. Referring to a previous case of “insemination by surrogacy”, the judge said: “On the balance of probabilities… I find that S deliberately misled [H and his partner] in order to conceive a child for herself, rather than changing her mind at a later date.”

Although accepting that “S is able to care for M well physically”, the judge expressed concerns about her “overemotional and highly involved role in this infant’s life”, noting that S still breastfed M, carried her in a sling, and “does not set out any timetable for returning to work”. The judge ruled that the child should be removed from her mother, with full custody given to the father, and full parental rights to the father’s partner.

“I had to hand her over at the high court on the day of the judgment,” S says, crying. “No transition period, nothing. She was at home, so a friend had to bring her over to the high court, and I was absolutely terrified. I was sitting by the entrance, security guards were giving me tissues, and I was waiting for my friend and my baby. I breastfed her there, on a bench in the big hall in the high court. And then I was told I had to hand her over. My baby was asleep, and I was thinking, ‘What is she going to think when she wakes up?’”

I breastfed my baby there, on a bench in the high court. And then I was told I had to hand her over

Since that day, S has been allowed a short supervised visit with her child in a contact centre once a fortnight. “We play, she calls me Mummy. Then she is taken away, and she looks back at me, and I see she’s puzzled. It’s heartbreaking.”

The long-term impact of the child’s removal from her mother is acknowledged in the court judgment, but not dwelt upon: “M is very young and will settle quickly… Very sadly, this case is another example of how ‘agreements’ between potential parents reached privately to conceive children to build a family go wrong.”

The solicitor for the father was Natalie Gamble, and she shares the judge’s frustration. Gamble has spent the past 20 years representing and advocating for “alternative” families. She started with her own. She has two children with her same-sex partner, both born as a result of artificial insemination by an anonymous donor. Back then, the non-birth mother had no parental rights, and Gamble started doing what she could to make her own family more secure.

Gamble now runs one of the leading fertility law firms in the UK, and has spent her career helping not only lesbian mothers, but others struggling with fertility clinics, parenting orders, donor conception disputes, co-parenting agreements and the like. On the wall of her Salisbury office is a pinboard full of baby photos sent in by grateful clients: little girls in tutus and twins wearing “I love my daddies” babygrows.

Many of the problems Gamble used to see were ironed out by the 2008 Human Fertilisation and Embryology Act, which did a lot to put same-sex and single parents on the same footing as straight couples. But legislators, persuaded by those who argued that paying surrogates amounted to “baby-selling”, decided not to lift the ban on commercial surrogacy. As a result, families created by surrogacy are particularly badly served by the law, Gamble argues, and many end up seeking her help as a result.

She is now at the forefront of a campaign to change the law, to bring it more in line with the Californian model. There, surrogates are paid an “inconvenience” fee (of around $20,000-$30,000 – £13,000-£20,000) on top of expenses, and the intended parents are legally recognised from before birth. Gamble would like to see regulated and transparent fees, binding surrogacy agreements and pre-birth orders that would enable an immediate transfer of parenthood.

There is no sense in my mind in bringing children into the world, and then trying to figure out what to do with them

In 2013, she founded a surrogacy agency, Brilliant Beginnings. It charges £500 plus VAT for a two-hour “options review meeting”, £7,000 for a “structured matching” of surrogate to intended parent, and £5,500 for supporting parents through the process. Bound by UK law, it is non-profit-making but, for Gamble, this is not about making money. “Brilliant Beginnings is our activism,” she says. “We are creating a model for a properly structured surrogacy, and saying, this is how it could work in Britain.”

Gamble sees it as common sense: “We have laws that try to put a lid on surrogacy. So what happens? Everybody goes abroad, has kids, and they come back and say, ‘Oh, here’s our baby, and now what are you going to do?’” And what do the courts do? “They chip, chip, chip away at the policy bit by bit by bit, until the policy doesn’t exist any more.”

***

In 2008, the first international surrogacy case landed in the UK courts. A British couple had gone to Ukraine, where a married woman had agreed to act as a surrogate for the embryos created with the father’s sperm and a donor’s eggs. Twin babies were born.

British law is clear: the woman who carries the child in her womb is the legal mother of that child, regardless of its genetic origins and regardless of where the child was conceived; the man who is married to the mother is the legal father, regardless of whose sperm was used. So in this case, the Ukrainian surrogate was the twin’s legal mother and her husband was their legal father.

Ukrainian law is also clear. There, commercial surrogacy is legal, and the surrogate mother and her husband have neither the status nor the rights and duties of parents. So under Ukrainian law the British couple were the sole parents. The twins were, legally, parentless and stateless. So the British court did the only thing it could sensibly do: it recognised the British couple as their parents and Britain as their country.

The next case to “chip away” at the law was that of Baby L, in 2010, which overturned the principle that surrogates should be motivated by altruism, not cash. Baby L had been born by commercial surrogacy in Illinois to British parents. The high court granted the parental orders and established the principle that, unless a foreign surrogacy case was one of the “clearest abuse of public policy”, a parental order would always be granted.

My son has three friends in his year at school born by surrogates. There’s been a real shift

Any idea that there should be a cap on payments was overturned in 2013, when a couple who had paid an American surrogate $56,750 (roughly £37,000) were nonetheless granted parental orders. This was then the highest ever payment authorised by a UK court, though much higher payments have been allowed since. “The court has in every single case authorised payments,” Gamble says, “so we already have commercial surrogacy. But there’s no definition, no clarity.”

British surrogacy policy was also designed to protect surrogate mothers against exploitation, coercion and trafficking. This is particularly important now that going overseas for fertility treatment is so easy, and is a concern shared by some of the destination countries. Thailand recently closed its doors to foreign intended parents following a series of scandals; Nepal suspended commercial surrogacy in 2015; and now India is considering restricting access to foreigners not of Indian origin. However, new surrogacy markets are emerging all the time (most recently in Mexico and Greece).

In order to protect surrogate mothers, the law is clear that a parenting order cannot be made without the surrogate’s written consent after the birth. But in 2012, in the case of “D” and “L”, this principle was “chipped away”, too.

“D” and “L” are twin boys, now aged four, who live with their gay fathers, Tariq and Mark, in the UK. The twins were conceived in a clinic in Hyderabad, India, using Tariq’s sperm and eggs from an anonymous donor, and were carried by an Indian surrogate whom the couple never met.

“We started to realise there was a problem six weeks before the boys were born,” Tariq says. The clinic couldn’t tell the couple when the twins were supposed to be born. “They came up with completely random dates.” The couple missed the birth. “They were 48 hours old when we got to them. It wasn’t a great start.”

To get a parental order, Tariq and Mark needed evidence that the surrogate had given her written consent at least six weeks after the birth. All the couple had was a document from the clinic that the surrogate had signed 12 hours after the birth. Now she could not be traced.

With Gamble’s help, the men managed to get the babies passports and returned to the UK, where parental orders were granted despite the lack of written consent. Tariq never did find out what happened to his boys’ surrogate mother, and still doesn’t know her identity. “You just hope the surrogate got whatever deal she entered into. You have to think that if anything [had] happen[ed] to her a report would have been filed with the police… there would be a lynch mob on the doorstep of the clinic. She signed an affidavit to say she did receive the money, but that’s the only thing we have to go on.”

In the circumstances, the court had little choice but to grant the parental orders: the alternative was to remove the babies from loving fathers and consign them to an Indian orphanage.

One of the few parts of the existing legislation that has not been chipped away is the prohibition on single parents. In early 2015, Kyle Casson, a single man whose mother had been his surrogate (using his sperm and a donor egg), was forced to adopt his own child. In September, a single man who had a surrogate-born child in the US was also denied a parenting order, meaning that the US surrogate – who has no biological connection to the child and no intention to be the child’s mother – remains the legal parent in the UK (but not in the US, where the father has been recognised). The man may seek a declaration that the law is incompatible with his human rights, which would put pressure on parliament to review the law.

Gamble feels the courts make good decisions on the whole, but both she and SUK find it troubling that we are effectively allowing surrogacy law to be rewritten by judges, one case at a time.

Gerald Holden, another of Gamble’s clients, agrees. “There is no sense in my mind in bringing kids into the world and then trying to figure out what to do with them,” he says. Holden, 51, was a senior executive at Barclays and now owns a vineyard in South Africa with his German partner, Migo, 46. He has houses all over the world, and is wealthy enough that he can shop around. Surrogacy is illegal in Germany, so that was not an option. They ruled out Britain, too, because surrogacy contracts were not enforceable.

‘It’s a loving, friendly and nurturing environment’: Gerald Holden (on right) with partner Migo and children Hiro (on left) and Rothko. Photograph: Ben Quinton for the Guardian

In the end, they settled on South Africa. There, gamete donors are anonymous. (“Some people say the kids might want to know who their mother is,” Holden says, “but that’s not their mother: it’s a person who donated an egg.”) Commercial surrogacy is outlawed, so the surrogate is not paid a fee, just expenses, though Holden wouldn’t have minded paying: “We should be encouraging surrogates.” Most important of all, from Holden’s point of view, is that South African law has removed much of the risk for intended parents.

Holden explains: “We had a tripartite, legally binding agreement between myself, my partner and the surrogate, agreed by a QC; we all sign it and it goes to the high court in Cape Town and a judge stamps it. It is a court order – more binding than a contractual obligation. The only way it can be overturned is by the court, and they haven’t overturned any.”

The first surrogacy went smoothly (Rothko, four), as did the second (Hiro, 15 months). Both surrogates were women who worked for Holden and wanted to help, and they all remain friends and colleagues. The only reason Holden wound up in Gamble’s office was that, although he is British by birth, neither he nor his partner is resident here. Holden wanted to be recognised as the legal parent of his children in this country, and for them to have British citizenship as a result – yet at that time, parents not domiciled in the UK could not be awarded parental orders here. Once again, the judge ruled in the best interests of the child, and awarded the parental order.

“Rothko is bilingual – he speaks German and English,” Holden says. “His is not a normal life: he’s growing up on a 45-acre wine farm. He’s got pet monkeys, he’s got dogs, there are 40 staff. And then there’s me, I’m Papa, and Migo who is Daddy, or sometimes ‘DaddyMama’ and other times ‘MummyDaddy’. But he sees surrogacy as a completely normal thing. He’s at a private school where he has three friends in his year who have all got two dads, all born through surrogacy.

“It has really changed, even in the last five years. There’s been a societal shift; we’ve probably influenced another 10 kids to be born by showing that it’s possible, that we bring our kids up in a loving, friendly and nurturing environment.”

‘My son sees surrogacy as a completely normal thing.’ Photograph: Ben Quinton for the Guardian

Holden is in no doubt that Britain should encourage as many happy families as possible: “You should be able to pay the surrogate a reasonable fee and obviously cover their expenses. And there should definitely be legally binding pre-conception orders, open to singles or couples. Anonymity of the egg donor is very important.” A classic commercial model, in other words.

But is this really the best way to encourage happy families? SUK’s report suggests not. They carried out the largest ever UK survey of surrogates and intended parents, and what they found was a surprise, even to them.

The call for a move towards commercial surrogacy is fuelled by the perception that international surrogacy is now commonplace in the UK. In a widely reported Westminster debate in 2014, the then Tory MP Jessica Lee said that around 1,000-2,000 children were born to surrogates for UK parents every year, with up to 95% of these being born overseas. SUK was unable to find a shred of evidence to support this claim, and its research suggests the numbers are much smaller.

Meanwhile, SUK found that the British altruistic model of surrogacy was working well in important respects: most surrogates receive less than £15,000 in expenses (the average is £10,859), and don’t want to be paid a fee; many surrogates do it more than once and most maintain long-term contact with the intended parents and their children; and both intended parents and surrogates reported a high degree of openness about how the children were created.

Professor Susan Golombok, director of the centre for family research at the University of Cambridge, and the author of Modern Families: Parents And Children In New Family Forms, has endorsed the new SUK report. “The most crucial question of all,” Golombok says, “is how the children will feel about having been born to a surrogate mother.” From what we know so far, she says, both intended parents and surrogates are proud of the families they have created, and the children are neither distressed nor disturbed by their origins. Her most recent – as yet unpublished – research is based on interviews with 14-year-olds. No research has so far been done on older children.

“As yet, surrogate-born children don’t have much of a voice,” says Louisa Ghevaert, a lawyer who has specialised in fertility and family law for many years and is another member of the SUK working group on surrogacy reform. “We won’t really know what reproductive technologies mean for families for another 20 or 30 years.”

Unlike Gamble, Ghevaert does not think the law is broken. “At the moment there is an international patchwork of law. There is confusion, there are legal pitfalls, and intended parents need to proceed very carefully, especially if they go overseas.” But, she adds, “It doesn’t necessarily follow there should be a revolution.”

Those surveyed by SUK agree: they are happy with the way parental orders are awarded, but would like that process to be brought forward, so the intended parents are recognised as the legal parents at birth. They would like single parents and intended parents who don’t have a genetic link to the surrogate-born child to be allowed to apply for parenting orders, in recognition of how families are changing. And they think non-profit agencies should be allowed to advertise for surrogates. But, crucially, most surrogates and intended parents say they want altruism to remain the bedrock of the law: no legally binding contracts, no brokers, no fees.

Commercial surrogacy increases the costs, which worries Natalie Smith, who believes many people would find themselves priced out of the market. More surprising, perhaps, is how strongly British surrogates resist the idea of being paid. They don’t want others to profit at their expense (“It won’t be the surrogates who get the money,” Jenny French says. “It will be the lawyers and the agents”) and they think payments would stigmatise them as “baby-sellers”. But they also resist the idea out of a feeling of solidarity – love, even – for the intended parents.

As French says, “They have often paid out extortionate amounts of money for round after round of IVF before they even get to surrogacy, and then to have solicitors getting involved… They have been through enough.”

In the end, Ghevaert says, the goal is to protect everyone in the process. “UK surrogacy at its best can be a life-fulfilling, life-creating exercise,” she says. “It can be the fulfilment of the hopes and dreams of family, it is an expression of altruism, and it can deliver a biologically related child. But the handing over of a child is a hugely significant event for everybody involved, and there is no getting away from that.”

“My girls might not even think surrogacy a big deal when they are 15,” Smith says, “but they might. And, if they do, they can sit down and talk to Jenny about why she decided to be a surrogate. The values my girls will get from their birth story are empathy, determination, love, friendship. Theirs is a story they can be proud of.”

• Some names have been changed.