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Can you perceive our political system operates? It could be along the lines of this. We elect MPs. They legislate on bills. When a majority is secured, the bills are enacted as law. Statutes is upheld by the courts. That's it. Well, that used to be how it once functioned. Those days are over.

The Advent of Offshore Tribunals

Today, foreign corporations, and the billionaires who own them, are able to litigate against elected administrations for the laws they pass, at secret arbitration panels staffed by commercial attorneys. These proceedings are held in secret. Unlike our courts, these panels grant no avenue for appeal or legal review. The general public are unable to file a case to them, nor can our government, including enterprises headquartered in this country. The door is open solely for entities based overseas.

Should an arbitration panel rules that a government measure might diminish the corporation’s anticipated profits, it has the power to grant damages of hundreds of millions of pounds, potentially billions.

These sums represent not real financial harm but money the panel members decide the company could potentially have made. The government might be compelled to rescind the measure. It is hesitant to introducing similar legislation in that area, worried about being sued.

A System Growing Exponentially

Unprecedented levels of cases are being brought, as corporations learn from each other, and private equity finance suits in return for a share of the takings. The outcome? Democratic sovereignty and popular rule are turning into prohibitively expensive.

The process is referred to as “investor-state dispute settlement” (ISDS). The reason it is permitted to override national legislation and the decisions made by legislatures is that this stipulation has been written – without public consent, and frequently under a climate of total confidentiality – into trade treaties.

A Real-World Instance: The Cumbrian Coal Mine

A year ago, activists achieved a major legal triumph at the High Court. The justice found that schemes to excavate the first deep coalmine in the UK for three decades, at Whitehaven in Cumbria, were unlawfully approved by the previous government, which had agreed to the bizarre claim that the mine would have had no consequence on our carbon budgets. The incoming administration subsequently revoked the licence the Tories had issued. Currently, this legal outcome is under threat by an foreign court answering to no one but the entities bringing the case.

During August, a company whose final controllers are based in the tax haven filed a lawsuit challenging the UK government. Recently a tribunal in the US capital was established to adjudicate on it.

The company is suing the UK for the money it might have made if the mine had been permitted to go ahead. The public has no idea how much this could amount to. What legal team is acting on its behalf against the British government? A member of parliament, and ex-law officer in the outgoing administration, the noted patriot Geoffrey Cox. The government passes a law, the high court upholds it, then a overseas corporation challenges it through an secretive arbitration panel, and a elected official represents its behalf.

The Russian Case

Concurrently that the panel on the mining lawsuit was established, we learned from a parliamentary answer that the UK faces another lawsuit under ISDS by a Russian billionaire, an oligarch. We know scarce of the case to date, but it appears probable that he’ll use the arbitration process to challenge the sanctions the UK enacted against him subsequent to the invasion of Ukraine. He has already started suing a small nation with similar intent, claiming sixteen billion dollars: half that state's yearly income. Among the lawyers representing him there? Cherie Blair, spouse of the former British prime minister.

Legal experts believe that the EU’s hesitation in utilising seized state funds as security for its aid for Ukraine is due to concerns within Belgium that it could be subject to litigation in the ISDS tribunals, under a bilateral investment treaty. This unprecedented, unaccountable authority over elected governments might be preventing the money Ukraine desperately needs.

False Assurances and Growing Risks

We were assured that these events wouldn’t happen. Years ago, a senior politician, championing the biggest and most dangerous of all these agreements, declared: “Britain has agreed to trade deal after trade deal and there has not been a problem in the past.” A consultant on this issue accused campaigners of “scaremongering … in reality, ISDS has little impact on the UK much”. The overall message appeared to be that only poorer nations had to worry about such legal actions. Cautionary notes that “once firms start to realise the influence bestowed upon them, they will shift their focus from the weak nations to the developed economies” were greeted by widespread derision.

That threat has now materialised. Recently, fossil fuel and extraction companies have initiated a unprecedented number of suits against nations rich and poor, challenging – similar to the UK mine – state efforts to stop climate breakdown. Corporations have thus far won $114bn by using ISDS, of which oil majors have secured the majority. That represents the combined GDP