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Can you perceive our political system functions? It could be along the lines of this. We elect MPs. They vote on bills. Should a majority is secured, the bills become law. Statutes is upheld by the courts. That's it. Well, that’s how it operated in the past. No longer.

The Emergence of Shadow Tribunals

Today, international firms, and the oligarchs behind them, can sue nation states for the policies they pass, at offshore tribunals composed of business advocates. Such disputes take place behind closed doors. Unlike our courts, these tribunals allow no right of appeal or judicial review. The general public are barred from bringing a case to them, and neither can our government, including companies based in this country. Access is granted exclusively to corporations operating from foreign soil.

When a secret court finds that a government measure might diminish the corporation’s anticipated profits, it may order financial penalties of hundreds of millions, running into billions.

These sums constitute not tangible damages but compensation the tribunal officials determine the company could potentially have made. The government may have to rescind the measure. It becomes deterred from introducing similar legislation along the same lines, for fear of being sued.

A Process Growing Exponentially

Unprecedented levels of cases are being brought, as companies learn from each other, and investment funds fund legal actions for a share of a share of the takings. The result? Democratic sovereignty and popular rule are now unaffordable.

The system is called “investor-state dispute settlement” (ISDS). The reason it is allowed to supersede domestic law and the choices enacted by parliaments is that this stipulation has been inserted – without democratic mandate, and often in a climate of total confidentiality – inside international trade agreements.

A Specific Case: The Cumbrian Coalmine

Twelve months ago, environmental campaigners secured a significant win at the High Court. The judge ruled that plans to dig the first new deep coal mine in the UK for 30 years, in Cumbria, were unlawfully approved by the previous government, which had endorsed the bizarre claim that the mine would have had no consequence on national carbon targets. The new government subsequently revoked the licence the previous administration had issued. Now, this success faces being overturned by an offshore tribunal accountable to no one but the companies filing the suit.

During August, a corporate entity whose ultimate owners are located in the Cayman Islands initiated proceedings versus the UK government. The previous week a tribunal in Washington DC was established to adjudicate on it.

This firm is seeking compensation from the UK for the money it could have earned if the mine had been permitted to go ahead. We have no clear indication how much this might be. Which individual is representing it in opposition to the British government? A sitting MP, and previous senior legal advisor in the outgoing administration, the self-proclaimed patriot Geoffrey Cox. The government makes a decision, the national judiciary validates it, then a overseas corporation disputes it through an secretive arbitration panel, and a sitting MP acts on its behalf.

A Sanctions Challenge

On the same day that the panel on the coal mine dispute was convened, we learned from a parliamentary answer that the UK faces another lawsuit under ISDS by a wealthy Russian individual, Mikhail Fridman. The public knows little of the case at present, but it is highly possible that he’ll use the tribunal to contest the sanctions the UK levied against him following the Russian aggression. He has already filed a claim against Luxembourg with similar intent, seeking a colossal sum: equivalent to half of state's yearly income. Part of the lawyers on his side? Cherie Blair, spouse of the former British prime minister.

International law scholars argue that the EU’s hesitation in using frozen state funds as guarantee for its aid for Ukraine stems from apprehension in Brussels that it could be taken to court in the offshore corporate courts, under a trade agreement. This extraordinary, secretive influence over democratic administrations may be obstructing the money Ukraine desperately needs.

Misleading Claims and Growing Threats

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: “Britain has agreed to trade deal upon trade deal and there has never been a case in the past.” An expert on this issue labelled activists of “scaremongering … in reality, ISDS has little impact on the UK much”. The overall message appeared to be that exclusively weaker states had to worry about such legal actions. Cautionary notes that “once firms start to realise the authority bestowed upon them, they will turn their attention from the vulnerable countries to the developed economies” were greeted by widespread derision.

That threat is now a reality. This year, fossil fuel and extraction companies have lodged a historic level of suits against nations both wealthy and developing, opposing – like the example of the Cumbrian coalmine – state efforts to stop global warming. Corporations have so far won $114bn via ISDS, of which energy giants have been awarded the majority. That equates to the combined GDP