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What is your understand our system of government operates? Maybe something like this. We elect MPs. They vote on bills. Should a majority is secured, the bills pass into law. The law is maintained by the courts. That's it. However, that’s how it used to work. No longer.

The Advent of Secret Tribunals

Today, overseas companies, and the billionaires that control them, are able to litigate against governments for the laws they pass, at private courts made up of corporate lawyers. The cases are conducted away from public scrutiny. Unlike our courts, these bodies provide no avenue for appeal or legal review. Ordinary citizens are unable to file a case to them, and neither can our government, including businesses based in this country. Access is granted exclusively to entities operating from foreign soil.

If a tribunal finds that a government measure could harm the corporation’s anticipated profits, it can award compensation of hundreds of millions of pounds, running into billions.

These awards represent not real financial harm but funds the arbitrators decide the company would perhaps have made. The state could be forced to drop the legislation. It is deterred from introducing similar legislation along the same lines, for fear of being sued.

A Process Running Rampant

Unprecedented levels of cases are being initiated, as companies observe each other, and investment funds fund legal actions in return for a portion of the takings. The consequence? Democratic sovereignty and democratic governance are now prohibitively expensive.

The process is referred to as “investor-state dispute settlement” (ISDS). The reason it is permitted to supersede a country's own laws and the rulings taken by parliaments is that this stipulation has been inserted – without public consent, and often in conditions of total confidentiality – within international trade agreements.

A Specific Example: The Cumbrian Coalmine

Twelve months ago, environmental campaigners achieved a major legal triumph at the High Court. The judge determined that schemes to dig the first major coal mine in the UK for 30 years, in Cumbria, were found to be unlawfully approved by the previous government, which had endorsed the bizarre claim that the mine would have no impact on our carbon budgets. The new government subsequently revoked the consent the previous administration had approved. Now, this legal outcome faces being overturned by an secret arbitration panel answering to only the companies bringing the case.

During August, a company whose ultimate owners are located in the tax haven lodged a claim against the UK government. Last week a tribunal in the United States was set up to adjudicate on it.

This firm is suing the UK for the revenue it might have made if the mine had been permitted to proceed. We have no idea how much this might be. Who is representing it in opposition to the UK administration? An elected representative, and previous senior legal advisor in the previous government, the noted patriot Geoffrey Cox. The government passes a law, the national judiciary supports it, then a overseas corporation contests it through an undemocratic offshore tribunal, and a elected official works for its behalf.

The Russian Case

On the same day that the tribunal on the mining lawsuit was appointed, information emerged from a government response that the UK faces another lawsuit under ISDS by a Russian billionaire, Mikhail Fridman. Details are scarce of the case so far, but it is highly possible that he will utilise the ISDS mechanism to fight the penalties the UK imposed on him subsequent to the Russian aggression. He has filed a claim against Luxembourg with similar intent, claiming $16bn: an amount representing half state's yearly income. Part of the legal team acting for him in that case? the wife of a former prime minister, wife of the former British prime minister.

Trade specialists contend that the EU’s delay in leveraging immobilised oligarchs' funds as guarantee for its loan to Ukraine arises from apprehension in Brussels that it could be sued in the ISDS tribunals, under a investment pact. This unprecedented, undemocratic power over democratic administrations may be obstructing the money Ukraine desperately needs.

Misleading Claims and Escalating Threats

Politicians promised that these events were not possible. Previously, a senior politician, championing the largest and riskiest of all investment pacts, told us: “We’ve signed trade deal after trade deal and there has never been a problem in the past.” An expert on this topic described critics of “scaremongering … the truth is, ISDS has little impact on the UK much”. The general impression seemed to be that exclusively weaker states had to worry about these lawsuits. Cautionary notes that “when companies grasp the influence they now possess, they will redirect their efforts from the poorer states to the strong ones” were dismissed with scepticism.

That prediction is now a reality. Recently, oil and gas and mining firms have filed a record number of cases against nations across the economic spectrum, contesting – as in the case of the UK mine – government attempts to prevent climate breakdown. Companies have so far won one hundred and fourteen billion dollars by using ISDS, of which energy giants have secured the majority. That is equivalent to the combined GDP