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What is your understand our political system operates? It could be similar to this. Citizens choose MPs. They debate and pass bills. When a majority is obtained, the bills become law. Statutes are enforced by the courts. Simple as that. Well, that was how it operated in the past. No longer.

The Emergence of Secret Courts

Today, foreign corporations, or the oligarchs that control them, have the power to sue nation states for the regulations they pass, at private courts staffed by commercial attorneys. Such disputes are conducted away from public scrutiny. Unlike our courts, these panels grant no avenue for appeal or judicial review. The general public are barred from bringing a case to them, just as our government, or even enterprises based in this country. The door is open exclusively to businesses based overseas.

Should an arbitration panel rules that a legislative action may compromise the corporation’s projected profits, it may order financial penalties of hundreds of millions, even billions.

This compensation represent not real financial harm but funds the arbitrators conclude the company would perhaps have made. The government might be compelled to rescind the measure. It is hesitant to introducing similar legislation in that area, worried about facing litigation.

A Process Running Rampant

Unprecedented levels of cases are being filed, as companies take cues from each other, and hedge funds fund legal actions in return for a share of the settlements. The outcome? Sovereignty and popular rule are becoming prohibitively expensive.

The process is referred to as “investor-state dispute settlement” (ISDS). The explanation it is permitted to override domestic law and the choices made by legislatures is that this clause has been incorporated – without public consent, and frequently under a climate of profound opacity – inside international trade agreements.

A Concrete Case: The UK Coal Mine

A year ago, activists secured a significant win at the High Court. The presiding officer ruled that plans to excavate the first deep coalmine in the UK for three decades, in northwest England, were wrongly permitted by the previous government, which had endorsed the questionable argument that the mine could have no impact on our carbon budgets. The new government then withdrew the consent the former government had issued. Now, this legal outcome is under threat by an secret arbitration panel answering to no one but the entities filing the suit.

In August, a corporate entity whose beneficial owners are based in the offshore financial centre initiated proceedings against the UK government. Recently a arbitration panel in the United States was convened to hear it.

The company is suing the UK for the money it could have earned if the mine had been permitted to go ahead. The public has no idea how much this might be. What legal team is representing it challenging the UK administration? A member of parliament, and ex-law officer in the outgoing administration, the noted patriot Sir Geoffrey Cox. The administration enacts a policy, the domestic court upholds it, then a overseas corporation disputes it through an secretive private court, and a member of our parliament works for its behalf.

A Sanctions Lawsuit

Simultaneously that the tribunal on the coal mine dispute was appointed, we learned from a government response that the UK is subject to further litigation under ISDS by a wealthy Russian individual, Mikhail Fridman. Details are scarce of the case to date, but it seems likely that he may employ the ISDS mechanism to contest the restrictions the UK levied against him following the war in Ukraine. He has previously started suing Luxembourg on these grounds, demanding $16bn: equivalent to half of state's annual revenue. Among the legal team representing him there? Cherie Blair, married to the ex-UK leader.

International law scholars believe that the EU’s delay in leveraging immobilised oligarchs' funds as guarantee for its financial support package is due to Belgium’s fear that it could be taken to court in the ISDS tribunals, under a investment pact. This remarkable, unaccountable authority over sovereign states might be preventing the money Ukraine critically depends on.

Empty Promises and Growing Costs

Politicians promised that these scenarios could not occur. In 2014, a government leader, championing the biggest and most dangerous of all these agreements, told us: “Britain has agreed to trade agreement after trade deal and there has not been a case in the past.” An expert on this topic described critics of “scaremongering … the fact is, ISDS has little impact on the UK much”. The general impression seemed to be that exclusively weaker states should be concerned by ISDS claims. Warnings that “once firms grasp the authority they’ve been granted, they will turn their attention from the poorer states to the strong ones” were met with widespread derision.

That threat is now a reality. Recently, fossil fuel and resource corporations have filed a unprecedented number of suits against nations across the economic spectrum, opposing – like the example of the Whitehaven project – government attempts to stop environmental catastrophe. Firms have thus far won vast sums via ISDS, of which fossil fuel companies have been awarded the majority. That represents the combined GDP