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Can you understand our political system works? Maybe something like this. Citizens choose MPs. They vote on bills. Should a majority is achieved, the bills are enacted as law. Statutes is maintained by the courts. That's it. Well, that’s how it operated in the past. No longer.

The Advent of Offshore Tribunals

Today, overseas companies, or the oligarchs behind them, can sue governments for the policies they pass, at private courts made up of corporate lawyers. The cases are conducted away from public scrutiny. Unlike our courts, these tribunals allow no right of appeal or oversight by judges. Ordinary citizens cannot take a case to them, just as our government, or even companies based in this country. They are open only to businesses registered abroad.

Should an arbitration panel determines that a government measure could harm the corporation’s expected profits, it may order compensation of hundreds of millions of pounds, potentially billions.

These awards represent not real financial harm but compensation the tribunal officials determine the company could potentially have made. The state might be compelled to drop the legislation. It will be hesitant to introducing similar legislation of a similar nature, for fear of being sued.

A Process Running Rampant

Unprecedented levels of legal actions are being filed, as companies take cues from each other, and private equity bankroll lawsuits in return for a share of the awards. The outcome? Democratic sovereignty and democratic governance are now too costly.

The process is known as “investor-state dispute settlement” (ISDS). The explanation it is permitted to override national legislation and the choices taken by legislatures is that this stipulation has been written – absent public approval, and frequently under an atmosphere of extreme secrecy – within trade treaties.

A Specific Example: The Cumbrian Coalmine

Twelve months ago, environmental campaigners secured a significant win at the high court. The justice ruled that schemes to excavate the first major coal mine in the UK for three decades, at Whitehaven in Cumbria, were found to be wrongly permitted by the previous government, which had endorsed the bizarre claim that the mine could have no consequence on national carbon targets. The Labour government subsequently revoked the permission the Tories had granted. Today, this success is under threat by an foreign court accountable to no one but the corporations petitioning it.

During August, a firm whose beneficial owners reside in the Cayman Islands initiated proceedings versus the UK government. The previous week a arbitration panel in the United States was established to consider the case.

The company is suing the UK for the money it could have earned if the mine had been allowed to commence operations. We have no idea how much this sum represents. What legal team is serving as its counsel against the state? A sitting MP, and previous senior legal advisor in the outgoing administration, the self-proclaimed patriot Geoffrey Cox. The government enacts a policy, the national judiciary upholds it, then a foreign company disputes it through an unaccountable arbitration panel, and a sitting MP represents its behalf.

A Sanctions Lawsuit

On the same day that the court on the coal mine dispute was appointed, information emerged from a parliamentary answer that the UK is subject to further litigation under ISDS by a Russian oligarch, Mikhail Fridman. The public knows little of the case at present, but it appears probable that he’ll use the tribunal to challenge the penalties the UK levied against him following the invasion of Ukraine. He has already filed a claim against Luxembourg with similar intent, seeking sixteen billion dollars: half that government’s yearly income. Among the legal team acting for him in that case? Cherie Blair, spouse of the former British prime minister.

International law scholars believe that the EU’s procrastination in leveraging immobilised oligarchs' funds as guarantee for its loan to Ukraine is due to Belgium’s fear that it could be subject to litigation in the secret arbitration panels, under a bilateral investment treaty. This extraordinary, undemocratic power over elected governments might be preventing the finance Ukraine critically depends on.

False Assurances and Growing Threats

The public was told that these events could not occur. In 2014, a government leader, promoting the biggest and most dangerous of all such treaties, declared: “Britain has agreed to trade deal upon trade deal and we have never seen a case in the past.” An expert on this topic accused campaigners of “alarmism … the fact is, ISDS does not affect the UK much”. The prevailing narrative appeared to be that only poorer nations should be concerned by such legal actions. Warnings that “when companies start to realise the authority bestowed upon them, they will redirect their efforts from the poorer states to the developed economies” were dismissed with widespread derision.

That warning is now a reality. In the current period, energy and extraction companies have filed a unprecedented number of claims against nations across the economic spectrum, opposing – like the example of the Whitehaven project – state efforts to halt environmental catastrophe. Corporations have thus far won $114bn through ISDS, of which oil majors have obtained $84bn. That equates to the combined GDP