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What is your understand our political system works? Perhaps along the lines of this. We elect MPs. They debate and pass bills. If a majority is obtained, the bills pass into law. Legislation is maintained by the courts. That's it. However, that used to be how it used to work. Not anymore.

The Emergence of Secret Tribunals

Nowadays, international firms, along with the billionaires that control them, have the power to sue governments for the policies they pass, at private courts staffed by corporate lawyers. These proceedings are held behind closed doors. Unlike our courts, these panels provide no opportunity to appeal or legal review. The general public cannot take a case to them, and neither can our government, or even businesses operating from this country. The door is open exclusively to businesses based overseas.

Should an arbitration panel finds that a law or policy may compromise the corporation’s expected profits, it has the power to grant financial penalties of hundreds of millions of pounds, even billions.

These awards represent not actual losses but money the tribunal officials decide the company could potentially have made. The government may have to abandon its policy. It will be hesitant to passing future laws of a similar nature, worried about incurring a lawsuit.

A Process Spiralling Out of Control

Unprecedented levels of disputes are being brought, as companies take cues from each other, and investment funds fund legal actions for a share of a portion of the settlements. The outcome? National sovereignty and democratic governance are turning into unaffordable.

The process is referred to as “investor-state dispute settlement” (ISDS). The explanation it is permitted to override a country's own laws and the rulings enacted by legislatures is that this clause has been inserted – without democratic mandate, and often in a climate of extreme secrecy – inside trade treaties.

A Concrete Case: The Cumbrian Coalmine

Last year, a conservation group achieved a major legal triumph at the High Court. The presiding officer ruled that proposals to open the first major coal mine in the UK for 30 years, in Cumbria, were wrongly permitted by the previous government, which had agreed to the bizarre claim that the mine could have no consequence on national carbon targets. The new government then withdrew the licence the former government had issued. Currently, this legal outcome faces being overturned by an secret arbitration panel accountable to no one but the companies filing the suit.

In August, a corporate entity whose beneficial owners are located in the tax haven lodged a claim challenging the UK government. Last week a tribunal in the United States was convened to adjudicate on it.

This firm is seeking compensation from the UK for the money it might have made if the mine had received permission to go ahead. We have no clear indication how much this sum represents. Which individual is acting on its behalf in opposition to the state? An elected representative, and ex-law officer in the previous government, that great patriot Sir Geoffrey Cox. The government enacts a policy, the national judiciary upholds it, then a overseas corporation disputes it through an secretive offshore tribunal, and a sitting MP acts on its behalf.

The Russian Lawsuit

Concurrently that the court on the coalmine case was appointed, we learned from a ministerial statement that the UK is also being sued under ISDS by a Russian oligarch, Mikhail Fridman. We know scarce of the case so far, but it is highly possible that he’ll use the tribunal to fight the restrictions the UK imposed on him subsequent to the Russian aggression. He has already initiated proceedings against another European state for this reason, claiming sixteen billion dollars: an amount representing half state's annual revenue. Among the counsel representing him there? a prominent lawyer, married to the ex-UK leader.

Legal experts contend that the EU’s procrastination in leveraging immobilised state funds as security for its aid for Ukraine is due to apprehension in Brussels that it could be subject to litigation in the secret arbitration panels, under a trade agreement. This extraordinary, unaccountable authority over elected governments could be blocking the funds Ukraine desperately needs.

Misleading Claims and Escalating Threats

We were assured that these scenarios could not occur. Previously, a government leader, promoting the largest and riskiest of all such treaties, told us: “We’ve signed trade agreement upon trade deal and there has never been a problem in the past.” A consultant on this topic labelled campaigners of “scaremongering … in reality, ISDS has little impact on the UK much”. The general impression was crafted to be that only poorer nations needed to fear ISDS claims. Warnings that “when companies begin to understand the influence bestowed upon them, they will shift their focus from the poorer states to the strong ones” were met with widespread derision.

That prediction is now a reality. This year, fossil fuel and extraction companies have lodged a record number of cases against nations across the economic spectrum, opposing – like the example of the UK mine – official measures to prevent climate breakdown. Corporations have to date won $114bn by using ISDS, of which fossil fuel companies have obtained the majority. That equates to the combined GDP