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What is your understand our political system works? Maybe along the lines of this. The public votes for MPs. They legislate on bills. If a majority is obtained, the bills pass into law. The law is upheld by the courts. End of story. However, that used to be how it once functioned. No longer.

The Advent of Secret Tribunals

Today, international firms, and the billionaires behind them, are able to litigate against governments for the policies they pass, at offshore tribunals composed of commercial attorneys. Such disputes are conducted in secret. Unlike our courts, these bodies grant no avenue for appeal or oversight by judges. The general public are unable to file a case to them, just as our government, or even companies based in this country. Access is granted only to entities based overseas.

If a tribunal rules that a government measure may compromise the corporation’s expected profits, it may order compensation of hundreds of millions of pounds, running into billions.

These sums represent not tangible damages but money the tribunal officials determine the company could potentially have made. The state may have to drop the legislation. It will be hesitant to enacting future policies of a similar nature, worried about facing litigation.

A Mechanism Running Rampant

Historically high figures of cases are being brought, as firms take cues from each other, and investment funds bankroll lawsuits in exchange for a portion of the takings. The result? National sovereignty and popular rule are now unaffordable.

The system is known as “investor-state dispute settlement” (ISDS). The rationale it is allowed to override a country's own laws and the decisions made by parliaments is that this stipulation has been incorporated – without public consent, and frequently under a climate of extreme secrecy – within international trade agreements.

A Specific Case: The UK Coal Mine

A year ago, environmental campaigners secured a significant win at the High Court. The justice found that plans to open the first deep coalmine in the UK for a generation, at Whitehaven in Cumbria, were wrongly permitted by the outgoing administration, which had agreed to the bizarre claim that the mine could have no consequence on national carbon targets. The new government subsequently revoked the permission the previous administration had granted. Currently, this success could be compromised by an foreign court accountable to exclusively the companies petitioning it.

Last August, a firm whose ultimate owners are located in the Cayman Islands filed a lawsuit challenging the UK government. Recently a arbitration panel in the United States was established to consider the case.

The claimant is seeking compensation from the UK for the revenue it would have generated if the mine had been permitted to go ahead. Citizens have no idea how much this could amount to. What legal team is serving as its counsel challenging the UK administration? An elected representative, and previous senior legal advisor in the Conservative government, the noted patriot Sir Geoffrey Cox. The government enacts a policy, the national judiciary validates it, then a international entity contests it through an secretive offshore tribunal, and a sitting MP works for its behalf.

The Russian Challenge

Concurrently that the court on the coalmine case was convened, we learned from a parliamentary answer that the UK is also being sued under ISDS by a Russian billionaire, a sanctioned individual. The public knows nothing of the case so far, but it is highly possible that he may employ the tribunal to challenge the penalties the UK enacted against him after the Russian aggression. He has previously started suing a small nation with similar intent, claiming a colossal sum: an amount representing half state's annual revenue. Included in the counsel on his side? a prominent lawyer, married to the former British prime minister.

Legal experts argue that the EU’s hesitation in using frozen oligarchs' funds as guarantee for its financial support package is due to concerns within Belgium that it could be subject to litigation in the offshore corporate courts, under a investment pact. This remarkable, undemocratic power over elected governments could be blocking the funds Ukraine urgently requires.

Misleading Claims and Growing Costs

The public was told that such things could not occur. Previously, a former prime minister, promoting the most significant and hazardous of all such treaties, stated: “We’ve signed trade deal upon trade deal and we have never seen a issue in the past.” A consultant on this issue described campaigners of “exaggeration … in reality, ISDS barely touches the UK much”. The prevailing narrative seemed to be that exclusively weaker states should be concerned by such legal actions. Predictions that “when companies start to realise the power bestowed upon them, they will redirect their efforts from the weak nations to the wealthy nations” were greeted by widespread derision.

That warning has now materialised. In the current period, oil and gas and resource corporations have lodged a record number of suits against nations rich and poor, challenging – like the example of the UK mine – state efforts to halt global warming. Firms have thus far won $114bn through ISDS, of which energy giants have obtained the majority. That equates to the combined GDP