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Can you understand our democratic process works? Maybe something like this. We elect MPs. They debate and pass bills. Should a majority is secured, the bills pass into law. Legislation are enforced by the courts. That's it. Yet, that’s how it once functioned. No longer.

The Advent of Secret Tribunals

In the modern era, foreign corporations, and the oligarchs that control them, are able to litigate against governments for the laws they pass, at secret arbitration panels staffed by commercial attorneys. The cases are conducted behind closed doors. In contrast to domestic courts, these panels grant no avenue for appeal or oversight by judges. Ordinary citizens are unable to file a case to them, and neither can our government, or even companies based in this country. Access is granted solely for corporations operating from foreign soil.

When a secret court rules that a legislative action may compromise the corporation’s expected profits, it may order compensation of vast sums, even billions.

This compensation represent not actual losses but money the arbitrators conclude the company could potentially have made. The government could be forced to drop the legislation. It becomes hesitant to enacting future policies along the same lines, due to the risk of incurring a lawsuit.

A Mechanism Running Rampant

Historically high figures of disputes are being initiated, as corporations observe each other, and investment funds finance suits for a share of a cut of the settlements. The result? National sovereignty and popular rule are turning into unaffordable.

The process is called “investor-state dispute settlement” (ISDS). The explanation it is permitted to supersede national legislation and the decisions enacted by parliaments is that this clause has been written – absent public approval, and frequently under an atmosphere of extreme secrecy – into bilateral investment treaties.

A Specific Instance: The Cumbrian Coal Mine

Twelve months ago, environmental campaigners achieved a major legal triumph at the senior court. The judge determined that plans to open the first major coal mine in the UK for a generation, at Whitehaven in Cumbria, had been unlawfully approved by the previous government, which had accepted the extraordinary assertion that the mine would have no impact on climate commitments. The Labour government later cancelled the permission the former government had granted. Now, this success faces being overturned by an foreign court answering to exclusively the entities filing the suit.

In August, a corporate entity whose final controllers are located in the offshore financial centre initiated proceedings against the UK government. Recently a tribunal in Washington DC was convened to adjudicate on it.

This firm is suing the UK for the revenue it would have generated if the mine had been permitted to go ahead. The public has no idea how much this sum represents. Which individual is serving as its counsel in opposition to the state? An elected representative, and previous senior legal advisor in the Conservative government, the self-proclaimed patriot the MP. The government passes a law, the domestic court supports it, then a international entity contests it through an undemocratic arbitration panel, and a elected official works for its behalf.

The Russian Case

Simultaneously that the tribunal on the mining lawsuit was established, we learned from a parliamentary answer that the UK is also being sued under ISDS by a Russian billionaire, a sanctioned individual. We know scarce of the case to date, but it is highly possible that he’ll use the arbitration process to fight the restrictions the UK enacted against him after the war in Ukraine. He has filed a claim against a small nation on these grounds, seeking a colossal sum: half that nation's annual revenue. Among the legal team on his side? a prominent lawyer, wife of the ex-UK leader.

Legal experts contend that the EU’s delay in using frozen Russian assets as collateral for its aid for Ukraine stems from concerns within Belgium that it could be taken to court in the secret arbitration panels, under a trade agreement. This remarkable, secretive influence over sovereign states could be blocking the finance Ukraine desperately needs.

Empty Promises and Growing Costs

We were assured that these scenarios could not occur. Previously, a former prime minister, advocating for the biggest and most dangerous of all these agreements, told us: “The UK has signed investment treaty after trade deal and there has never been a case in the past.” An adviser on this matter labelled activists of “alarmism … the fact is, ISDS barely touches the UK much”. The general impression was crafted to be that only poorer nations needed to fear these lawsuits. Warnings that “once firms begin to understand the authority bestowed upon them, they will turn their attention from the weak nations to the wealthy nations” were dismissed with widespread derision.

That prediction has now materialised. Recently, energy and extraction companies have initiated a historic level of cases against nations both wealthy and developing, challenging – like the example of the Cumbrian coalmine – government attempts to halt climate breakdown. Firms have to date won $114bn via ISDS, of which oil majors have secured $84bn. That equates to the combined GDP