The welfare test (as laid down in Dawson v Wearmouth)
Before using its discretion to allow any change of name, a court must weigh a number of factors in the balance, in the light of the section 1 criteria — and make up its mind whether the change would improve the child’s welfare.
This was confirmed as the law by Dawson v Wearmouth  UKHL 18, where Lord Mackay held that —
The name of a child is not a trivial matter but an important matter, and is not a question to be resolved without regard to the child’s welfare. For this purpose it [is] necessary to consider the welfare check-list in section 1(3) of the [Children Act 1989].
— and that —
… the right course, in my opinion, must be to apply the criteria in section 1 of the Act of 1989 including section 1(5) and not make an order for the change of name unless there is some evidence that this would lead to an improvement from the point of view of the welfare of the child.
Lady Justice Butler-Sloss, referring to the Law Lords’ judgment, in Re W, Re A, Re B (Change of Name)  EWCA Civ 2030, made clear that, when a court has to decide whether a change of name would improve a child’s welfare (applying the test as laid down in Dawson v Wearmouth), it should take all the relevant factors into account —
Each case has to be decided on its own facts with the welfare of the child the paramount consideration and all the relevant factors weighed in the balance by the court at the time of the hearing.
This means that a court shouldn’t try to decide what the “better” name for a child (given the circumstances) would be. They have to think about the effect of changing the child’s name, in all its aspects, and decide whether that would be in the child’s best interests or not. Being registered by a name, and having used it for a time, is in itself an argument for keeping that name as it is — and there may be other resons why the act of changing a name could have negative consequences.
In Dawson v Wearmouth, for example, the County Court had originally given leave for the child’s name to be changed from the step-father’s surname Wearmouth (with which the child was registered) to the father’s name Dawson. The House of Lords (and especially Lord Jauncey) was sympathetic to the father’s argument that the boy being known by his father’s name would help the relationship between them, as well as recognise his paternity — and that the mother might well re-marry and change her own name again. But on the other hand, the mother was nevertheless known by the same surname as the child (i.e. Wearmouth — being the surname of her ex-husband), and had no intention at that time of changing her name, and it was the name that the boy had been registered with and always known by. Thus the Law Lords took the view — in agreement with the Court of Appeal below them — that there were no “circumstances of sufficient strength” to justify a change of name (although they accepted it was “a difficult and narrow case”).
However, this test (as laid down in Dawson v Wearmouth) shouldn’t be taken to mean that there must always be some “added value” for a child, for a change of their name to be allowed. Lord Mackay’s dictum was clarified by Lord Justice Ryder in Re W (Children)  EWCA Civ 1488, where he held that the test should be — simply enough — that any change of name must be better for the child’s welfare (weighing all the factors together) than no change of name. It could be, after all, that a court has to make a choice between two “bad” options, in which case it would have to just choose whichever was the “less bad” of the two.
Lord Justice Ryder also highlighted the need (under subsection (e) of the welfare check-list) for the court to take into account any harm to the child, or any risk of harm, in its decision. (For example, it would be perfectly valid to allow a change of name on the grounds that it reduces the risk of the child being harmed, either at the present time or in the future.)
Lord Justice Ryder, in Re W, said that —
Dawson v Wearmouth … is often characterized as authority for the proposition that there has to be added value for the child concerned in any change proposed. That is not strictly accurate. The test is welfare, pure and simple. It is because the court has to analyse welfare by reference to the check-list [the subsection 1(3) criteria], in which an analysis of the effect of change and of risk of harm is undertaken, that in every name-change case the question of harm will arise. That is not to say that there is a presumption of harm arising out of a proposed change that has to be rebutted. On the facts, a change may be beneficial, because, for example, the circumstances that led to registration may be harmful.
Dawson v Wearmouth was a dispute about a child’s surname only. However, the case of Re W (Children)  EWCA Civ 1488 made clear that the test set out in Dawson v Wearmouth (and summarised in Re W, Re A, Re B) also applies to a change of first name.
Courts must look to both the long-term as well as the short-term future of a child, in exercising their discretion, as Lord Jauncey pointed out (also in Dawson v Wearmouth) —
There are many factors which must be taken into account, not only those pertaining to the present situation but also those which are likely to affect the child in the future.