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What is your understand our democratic process functions? Perhaps similar to this. Citizens choose MPs. They legislate on bills. If a majority is secured, the bills pass into law. The law is maintained by the courts. That's it. Yet, that was how it used to work. Not anymore.

The Rise of Secret Tribunals

Today, overseas companies, along with the oligarchs that control them, have the power to sue governments for the regulations they pass, at private courts composed of corporate lawyers. These proceedings are held behind closed doors. Unlike our courts, these bodies provide no right of appeal or judicial review. You or I cannot take a case to them, and neither can our government, or even companies based in this country. Access is granted exclusively to businesses based overseas.

When a secret court determines that a legislative action could harm the corporation’s projected profits, it has the power to grant damages of hundreds of millions, potentially billions.

This compensation are based not on real financial harm but funds the panel members conclude the company would perhaps have made. The state may have to abandon its policy. It will be discouraged from enacting future policies of a similar nature, for fear of facing litigation.

A Process Spiralling Out of Control

Historically high figures of disputes are being filed, as corporations observe each other, and investment funds bankroll lawsuits for a share of a cut of the takings. The result? National sovereignty and popular rule are becoming unaffordable.

The process is called “investor-state dispute settlement” (ISDS). The explanation it is permitted to trump national legislation and the choices made by elected bodies is that this stipulation has been incorporated – without public consent, and frequently under a climate of extreme secrecy – inside bilateral investment treaties.

A Real-World Instance: The Cumbrian Coal Mine

A year ago, a conservation group won a great victory at the High Court. The justice found that schemes to dig the first major coal mine in the UK for 30 years, in northwest England, were found to be unlawfully approved by the previous government, which had accepted the questionable argument that the mine would have had no impact on climate commitments. The new government subsequently revoked the licence the Tories had approved. Now, this legal outcome is under threat by an secret arbitration panel accountable to exclusively the corporations petitioning it.

Last August, a firm whose final controllers are located in the offshore financial centre filed a lawsuit versus the UK government. The previous week a dispute settlement body in the US capital was convened to adjudicate on it.

This firm is seeking compensation from the UK for the revenue it would have generated if the mine had been permitted to proceed. The public has little idea how much this could amount to. Which individual is representing it challenging the British government? A member of parliament, and ex-law officer in the previous government, the noted patriot Sir Geoffrey Cox. The state enacts a policy, the national judiciary upholds it, then a foreign company challenges it through an unaccountable arbitration panel, and a sitting MP works for its behalf.

An Oligarch's Case

Concurrently that the court on the coalmine case was convened, we learned from a government response that the UK is subject to further litigation under ISDS by a Russian billionaire, an oligarch. We know nothing of the case so far, but it is highly possible that he may employ the tribunal to fight the restrictions the UK imposed on him after the war in Ukraine. He has initiated proceedings against a small nation with similar intent, seeking a colossal sum: an amount representing half nation's annual revenue. Among the lawyers representing him there? the wife of a former prime minister, wife of the previous PM.

Trade specialists believe that the EU’s delay in utilising seized state funds as security for its loan to Ukraine arises from Belgium’s fear that it could be taken to court in the offshore corporate courts, under a investment pact. This extraordinary, secretive influence over elected governments might be preventing the funds Ukraine urgently requires.

Misleading Claims and Escalating Costs

Politicians promised that these events were not possible. In 2014, a government leader, championing the largest and riskiest of all such treaties, told us: “The UK has signed trade deal after trade deal and there has not been a problem in the past.” An expert on this matter described campaigners of “scaremongering … the fact is, ISDS has little impact on the UK much”. The prevailing narrative appeared to be that solely developing countries should be concerned by such legal actions. Cautionary notes that “as corporations grasp the authority they now possess, they will turn their attention from the poorer states to the developed economies” were met with general mockery.

That prediction is now a reality. This year, fossil fuel and resource corporations have initiated a historic level of claims against nations both wealthy and developing, challenging – similar to the UK mine – official measures to prevent environmental catastrophe. Companies have to date won vast sums by using ISDS, of which fossil fuel companies have secured the majority. That equates to the combined GDP