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Can you reckon our system of government operates? Maybe similar to this. The public votes for MPs. They vote on bills. Should a majority is obtained, the bills become law. Statutes is maintained by the courts. That's it. However, that’s how it once functioned. No longer.

The Emergence of Secret Tribunals

Nowadays, overseas companies, and the billionaires behind them, are able to litigate against governments for the laws they pass, at secret arbitration panels made up of corporate lawyers. These proceedings are conducted behind closed doors. Differing from national judiciaries, these tribunals provide no avenue for appeal or oversight by judges. Ordinary citizens cannot take a case to them, and neither can our government, including businesses operating from this country. Access is granted only to corporations operating from foreign soil.

If a tribunal determines that a legislative action might diminish the corporation’s anticipated profits, it can award financial penalties of hundreds of millions, potentially billions.

These sums are based not on actual losses but money the panel members conclude the company might otherwise have made. The government could be forced to abandon its policy. It becomes hesitant to enacting future policies along the same lines, worried about being sued.

A Mechanism Spiralling Out of Control

Historically high figures of cases are being filed, as firms learn from each other, and private equity bankroll lawsuits in return for a share of the takings. The result? National sovereignty and democratic governance are becoming unaffordable.

The process is referred to as “investor-state dispute settlement” (ISDS). The explanation it can supersede domestic law and the rulings enacted by elected bodies is that this provision has been written – without public consent, and often in conditions of extreme secrecy – within trade treaties.

A Real-World Example: The Whitehaven Coal Mine

Twelve months ago, environmental campaigners achieved a major legal triumph at the high court. The justice determined that plans to excavate the first new deep coal mine in the UK for three decades, in Cumbria, were found to be wrongly permitted by the previous government, which had accepted the bizarre claim that the mine would have had no consequence on our carbon budgets. The new government then withdrew the permission the previous administration had issued. Now, this success is under threat by an secret arbitration panel accountable to exclusively the companies petitioning it.

In August, a company whose final controllers are located in the tax haven lodged a claim versus the UK government. The previous week a dispute settlement body in the US capital was convened to hear it.

The claimant is litigating against the UK for the profits it could have earned if the mine had been permitted to commence operations. We have no clear indication how much this might be. What legal team is serving as its counsel against the UK administration? An elected representative, and former attorney-general in the Conservative government, the noted patriot Geoffrey Cox. The administration makes a decision, the domestic court validates it, then a international entity challenges it through an unaccountable private court, and a elected official represents its behalf.

A Sanctions Challenge

On the same day that the tribunal on the mining lawsuit was appointed, information emerged from a government response that the UK is subject to further litigation under ISDS by a wealthy Russian individual, an oligarch. We know little of the case at present, but it appears probable that he’ll use the tribunal to challenge the penalties the UK enacted against him following the war in Ukraine. He has previously started suing another European state with similar intent, claiming $16bn: equivalent to half of state's yearly income. Included in the legal team representing him there? Cherie Blair, spouse of the previous PM.

Legal experts contend that the EU’s delay in leveraging immobilised oligarchs' funds as collateral for its financial support package arises from Belgium’s fear that it could be sued in the ISDS tribunals, under a investment pact. This remarkable, undemocratic power over elected governments might be preventing the money Ukraine urgently requires.

False Assurances and Mounting Risks

Politicians promised that these scenarios could not occur. Years ago, a government leader, championing the most significant and hazardous of all these agreements, declared: “Britain has agreed to trade deal after trade deal and we have never seen a issue in the past.” A consultant on this issue accused activists of “alarmism … the truth is, ISDS does not affect the UK much”. The prevailing narrative was crafted to be that solely developing countries needed to fear these lawsuits. Predictions that “once firms begin to understand the influence they now possess, they will shift their focus from the weak nations to the developed economies” were greeted by scepticism.

That threat has now materialised. This year, fossil fuel and mining firms have filed a unprecedented number of suits against nations both wealthy and developing, opposing – as in the case of the Whitehaven project – state efforts to prevent environmental catastrophe. Firms have thus far won vast sums by using ISDS, of which energy giants have been awarded eighty-four billion dollars. That represents the combined GDP