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What is your perceive our system of government functions? Maybe along the lines of this. We elect MPs. They legislate on bills. If a majority is obtained, the bills are enacted as law. The law are enforced by the courts. End of story. However, that used to be how it once functioned. No longer.

The Rise of Secret Tribunals

Nowadays, overseas companies, or the billionaires who own them, are able to litigate against nation states for the policies they pass, at private courts staffed by corporate lawyers. The cases are held behind closed doors. In contrast to domestic courts, these bodies grant no right of appeal or oversight by judges. Ordinary citizens are unable to file a case to them, just as our government, including enterprises based in this country. Access is granted only to entities based overseas.

If a tribunal determines that a legislative action might diminish the corporation’s anticipated profits, it can award damages of vast sums, potentially billions.

This compensation represent not real financial harm but money the panel members decide the company would perhaps have made. The administration might be compelled to drop the legislation. It becomes deterred from introducing similar legislation along the same lines, due to the risk of being sued.

A System Growing Exponentially

Unprecedented levels of disputes are being filed, as corporations take cues from each other, and investment funds finance suits for a share of a cut of the awards. The result? National sovereignty and democracy are now unaffordable.

The system is called “investor-state dispute settlement” (ISDS). The rationale it is allowed to supersede a country's own laws and the decisions enacted by parliaments is that this clause has been written – absent public approval, and frequently under a climate of profound opacity – into bilateral investment treaties.

A Concrete Case: The Whitehaven Coalmine

Twelve months ago, a conservation group won a great victory at the High Court. The justice found that proposals to dig the first new deep coal mine in the UK for three decades, in Cumbria, were illegally sanctioned by the outgoing administration, which had agreed to the questionable argument that the mine could have zero effect on our carbon budgets. The incoming administration subsequently revoked the permission the former government had approved. Today, this victory is under threat by an foreign court answering to no one but the corporations filing the suit.

In August, a company whose final controllers are located in the offshore financial centre initiated proceedings versus the UK government. Last week a tribunal in Washington DC was convened to hear it.

This firm is suing the UK for the revenue it would have generated if the mine had been allowed to go ahead. The public has no clear indication how much this might be. Who is representing it against the UK administration? A member of parliament, and ex-law officer in the previous government, that great patriot Sir Geoffrey Cox. The administration makes a decision, the high court upholds it, then a international entity contests it through an secretive offshore tribunal, and a elected official works for its behalf.

An Oligarch's Lawsuit

Concurrently that the court on the coalmine case was convened, it was revealed from a parliamentary answer that the UK faces another lawsuit under ISDS by a wealthy Russian individual, an oligarch. The public knows nothing of the case to date, but it seems likely that he will utilise the ISDS mechanism to fight the restrictions the UK imposed on him following the war in Ukraine. He has filed a claim against a small nation on these grounds, claiming a colossal sum: half that state's yearly income. Included in the legal team on his side? Cherie Blair, married to the ex-UK leader.

Trade specialists argue that the EU’s delay in utilising seized Russian assets as collateral for its loan to Ukraine is due to concerns within Belgium that it could be sued in the ISDS tribunals, under a investment pact. This unprecedented, secretive influence over sovereign states could be blocking the finance Ukraine desperately needs.

Misleading Claims and Mounting Risks

The public was told that these scenarios could not occur. In 2014, a senior politician, advocating for the largest and riskiest of all investment pacts, stated: “We’ve signed investment treaty after trade deal and there has never been a problem in the past.” An adviser on this topic labelled campaigners of “scaremongering … the fact is, ISDS does not affect the UK much”. The prevailing narrative seemed to be that solely developing countries should be concerned by ISDS claims. Warnings that “as corporations start to realise the authority bestowed upon them, they will redirect their efforts from the weak nations to the developed economies” were greeted by general mockery.

That warning has come to pass. This year, oil and gas and extraction companies have initiated a record number of cases against nations both wealthy and developing, challenging – like the example of the Whitehaven project – government attempts to halt global warming. Corporations have to date won $114bn through ISDS, of which energy giants have secured eighty-four billion dollars. That equates to the combined GDP