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Can you perceive our political system works? It could be something like this. The public votes for MPs. They vote on bills. When a majority is obtained, the bills pass into law. The law is upheld by the courts. That's it. Well, that’s how it once functioned. Not anymore.

The Emergence of Secret Tribunals

Nowadays, overseas companies, along with the wealthy individuals behind them, can sue elected administrations for the policies they pass, at private courts staffed by commercial attorneys. Such disputes are conducted behind closed doors. Unlike our courts, these panels provide no opportunity to appeal or legal review. Ordinary citizens are unable to file a case to them, and neither can our government, including companies operating from this country. Access is granted only to businesses operating from foreign soil.

If a tribunal rules that a law or policy could harm the corporation’s anticipated profits, it may order financial penalties of hundreds of millions of pounds, running into billions.

This compensation represent not real financial harm but money the arbitrators decide the company would perhaps have made. The state might be compelled to drop the legislation. It is hesitant to passing future laws in that area, due to the risk of incurring a lawsuit.

A Mechanism Running Rampant

Record numbers of cases are being brought, as companies take cues from each other, and hedge funds fund legal actions for a share of a portion of the takings. The result? National sovereignty and democracy are becoming unaffordable.

The system is called “investor-state dispute settlement” (ISDS). The explanation it is allowed to trump a country's own laws and the choices enacted by elected bodies is that this provision has been inserted – absent public approval, and typically amid an atmosphere of profound opacity – within international trade agreements.

A Concrete Example: The Whitehaven Coalmine

Twelve months ago, activists won a great victory at the senior court. The justice determined that schemes to open the first new deep coal mine in the UK for a generation, at Whitehaven in Cumbria, had been unlawfully approved by the Conservative government, which had agreed to the extraordinary assertion that the mine would have no impact on our carbon budgets. The new government then withdrew the permission the previous administration had issued. Today, this victory is under threat by an offshore tribunal accountable to no one but the corporations bringing the case.

Last August, a firm whose final controllers are based in the offshore financial centre filed a lawsuit against the UK government. Recently a dispute settlement body in Washington DC was set up to adjudicate on it.

The claimant is litigating against the UK for the profits it might have made if the mine had been permitted to proceed. Citizens have little idea how much this sum represents. Who is serving as its counsel challenging the UK administration? A sitting MP, and former attorney-general in the previous government, that great patriot Sir Geoffrey Cox. The government enacts a policy, the domestic court validates it, then a international entity contests it through an secretive private court, and a member of our parliament acts on its behalf.

A Sanctions Lawsuit

On the same day that the tribunal on the coal mine dispute was established, we learned from a ministerial statement that the UK faces another lawsuit under ISDS by a Russian billionaire, a sanctioned individual. Details are scarce of the case to date, but it is highly possible that he’ll use the tribunal to challenge the penalties the UK imposed on him after the Russian aggression. He has started suing Luxembourg with similar intent, seeking sixteen billion dollars: half that nation's yearly income. Among the legal team representing him there? Cherie Blair, spouse of the previous PM.

International law scholars believe that the EU’s delay in utilising seized oligarchs' funds as security for its aid for Ukraine stems from Belgium’s fear that it could be sued in the ISDS tribunals, under a investment pact. This remarkable, unaccountable authority over democratic administrations might be preventing the funds Ukraine desperately needs.

False Assurances and Growing Costs

We were assured that these events were not possible. In 2014, a senior politician, championing the most significant and hazardous of all such treaties, stated: “The UK has signed trade agreement upon trade deal and there has not been a case in the past.” An expert on this matter labelled activists 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 ISDS claims. Warnings that “as corporations grasp the influence bestowed upon them, they will redirect their efforts from the weak nations to the developed economies” were dismissed with scepticism.

That warning has come to pass. In the current period, fossil fuel and mining firms have filed a record number of cases against nations across the economic spectrum, opposing – similar to the Cumbrian coalmine – government attempts to halt environmental catastrophe. Firms have to date won $114bn by using ISDS, of which fossil fuel companies have secured eighty-four billion dollars. That represents the combined GDP