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Can you understand our system of government operates? Maybe similar to this. The public votes for MPs. They debate and pass bills. If a majority is achieved, the bills become law. Legislation is maintained by the courts. That's it. However, that’s how it used to work. No longer.

The Advent of Secret Courts

In the modern era, overseas companies, or the oligarchs behind them, have the power to sue elected administrations for the policies they pass, at private courts staffed by commercial attorneys. Such disputes are conducted behind closed doors. Unlike our courts, these bodies allow no right of appeal or legal review. Ordinary citizens are barred from bringing a case to them, nor can our government, or even businesses operating from this country. Access is granted exclusively to entities based overseas.

When a secret court rules that a legislative action may compromise the corporation’s projected profits, it has the power to grant financial penalties of hundreds of millions of pounds, running into billions.

This compensation are based not on tangible damages but compensation the panel members determine the company might otherwise have made. The administration could be forced to rescind the measure. It is hesitant to introducing similar legislation of a similar nature, for fear of incurring a lawsuit.

A Mechanism Running Rampant

Record numbers of legal actions are being brought, as corporations observe each other, and investment funds finance suits in exchange for a portion of the awards. The result? Democratic sovereignty and democracy are becoming unaffordable.

The system is referred to as “investor-state dispute settlement” (ISDS). The reason it is permitted to supersede national legislation and the choices made by parliaments is that this provision has been written – absent public approval, and typically amid a climate of profound opacity – within bilateral investment treaties.

A Concrete Case: The Cumbrian Coalmine

Last year, activists won a great victory at the High Court. The judge found that schemes to dig the first new deep coal mine in the UK for three decades, in Cumbria, were unlawfully approved by the previous government, which had accepted the questionable argument that the mine could have no consequence on our carbon budgets. The Labour government subsequently revoked the consent the former government had approved. Currently, this victory is under threat by an foreign court answering to only the corporations petitioning it.

In August, a corporate entity whose final controllers are located in the tax haven initiated proceedings versus the UK government. Last week a arbitration panel in the United States was established to hear it.

The claimant is suing the UK for the money it might have made if the mine had received permission to go ahead. We have little idea how much this might be. Which individual is serving as its counsel against the British government? An elected representative, and previous senior legal advisor in the Conservative government, the noted patriot Geoffrey Cox. The administration passes a law, the national judiciary upholds it, then a foreign company disputes it through an unaccountable arbitration panel, and a member of our parliament works for its behalf.

The Russian Challenge

Concurrently that the court on the mining lawsuit was appointed, it was revealed from a government response that the UK faces another lawsuit under ISDS by a Russian billionaire, a sanctioned individual. We know nothing of the case so far, but it appears probable that he’ll use the tribunal to challenge the penalties the UK levied against him following the Russian aggression. He has previously started suing another European state with similar intent, seeking sixteen billion dollars: an amount representing half state's yearly budget. Included in the legal team acting for him in that case? Cherie Blair, married to the previous PM.

Trade specialists argue that the EU’s hesitation in utilising seized state funds as security for its loan to Ukraine is due to concerns within Belgium that it could be subject to litigation in the ISDS tribunals, under a investment pact. This remarkable, secretive influence over elected governments could be blocking the finance Ukraine desperately needs.

False Assurances and Mounting Costs

The public was told that these scenarios were not possible. Previously, a former prime minister, advocating for the biggest and most dangerous of all investment pacts, told us: “We’ve signed trade deal after trade deal and we have never seen a issue in the past.” An adviser on this matter accused campaigners of “scaremongering … the fact is, ISDS barely touches the UK much”. The overall message was crafted to be that exclusively weaker states should be concerned by ISDS claims. Predictions that “when companies begin to understand the influence bestowed upon them, they will turn their attention from the vulnerable countries to the developed economies” were met with widespread derision.

That threat has come to pass. Recently, energy and extraction companies have lodged a historic level of claims against nations across the economic spectrum, contesting – like the example of the Whitehaven project – state efforts to stop environmental catastrophe. Firms have thus far won $114bn by using ISDS, of which energy giants have secured eighty-four billion dollars. That is equivalent to the combined GDP