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How do you understand our democratic process works? Perhaps similar to this. We elect MPs. They debate and pass bills. If a majority is achieved, the bills pass into law. Legislation is maintained by the courts. That's it. Well, that used to be how it used to work. Not anymore.

The Rise of Secret Courts

In the modern era, foreign corporations, and the oligarchs who own them, have the power to sue nation states for the laws they pass, at offshore tribunals staffed by business advocates. These proceedings are conducted away from public scrutiny. Unlike our courts, these panels provide no right of appeal or legal review. Ordinary citizens are barred from bringing a case to them, and neither can our government, including enterprises based in this country. They are open only to corporations based overseas.

When a secret court rules that a law or policy could harm the corporation’s projected profits, it can award financial penalties of hundreds of millions, potentially billions.

These awards constitute not actual losses but compensation the arbitrators conclude the company could potentially have made. The administration may have to abandon its policy. It is hesitant to introducing similar legislation along the same lines, for fear of incurring a lawsuit.

A System Growing Exponentially

Record numbers of cases are being brought, as corporations learn from each other, and hedge funds bankroll lawsuits for a share of a portion of the takings. The consequence? Democratic sovereignty and democracy are becoming prohibitively expensive.

The process is referred to as “investor-state dispute settlement” (ISDS). The explanation it can supersede a country's own laws and the choices taken by legislatures is that this provision has been written – absent public approval, and frequently under conditions of profound opacity – inside trade treaties.

A Real-World Example: The Cumbrian Coalmine

Last year, environmental campaigners won a great victory at the high court. The judge determined that plans to excavate the first deep coalmine in the UK for 30 years, at Whitehaven in Cumbria, had been unlawfully approved by the Conservative government, which had agreed to the bizarre claim that the mine could have no consequence on climate commitments. The Labour government subsequently revoked the consent the previous administration had approved. Today, this legal outcome is under threat by an foreign court accountable to only the corporations filing the suit.

In August, a company whose ultimate owners are based in the Cayman Islands filed a lawsuit versus the UK government. The previous week a tribunal in the US capital was convened to hear it.

The claimant is seeking compensation from the UK for the revenue it might have made if the mine had been allowed to proceed. We have little idea how much this might be. What legal team is acting on its behalf in opposition to the British government? A sitting MP, and previous senior legal advisor in the previous government, that great patriot Geoffrey Cox. The government enacts a policy, the national judiciary validates it, then a foreign company challenges it through an secretive offshore tribunal, and a member of our parliament acts on its behalf.

An Oligarch's Case

Simultaneously that the tribunal on the mining lawsuit was established, it was revealed from a parliamentary answer that the UK is also being sued under ISDS by a Russian billionaire, Mikhail Fridman. Details are nothing of the case to date, but it is highly possible that he may employ the arbitration process to challenge the penalties the UK enacted against him subsequent to the Russian aggression. He has previously filed a claim against a small nation on these grounds, claiming a colossal sum: half that nation's annual revenue. Part of the legal team representing him there? a prominent lawyer, married to the ex-UK leader.

Legal experts believe that the EU’s procrastination in utilising seized oligarchs' funds as collateral for its financial support package arises from Belgium’s fear that it could be taken to court in the ISDS tribunals, under a investment pact. This remarkable, unaccountable authority over elected governments might be preventing the finance Ukraine critically depends on.

Empty Promises and Mounting Threats

The public was told that these scenarios wouldn’t happen. Previously, a former prime minister, championing the biggest and most dangerous of all these agreements, told us: “We’ve signed investment treaty after trade deal and we have never seen a issue in the past.” An expert on this matter labelled critics of “alarmism … in reality, ISDS does not affect the UK much”. The overall message was crafted to be that exclusively weaker states should be concerned by such legal actions. Predictions that “as corporations grasp the authority they’ve been granted, they will turn their attention from the weak nations to the developed economies” were dismissed with general mockery.

That prediction has now materialised. In the current period, fossil fuel and extraction companies have filed a unprecedented number of claims against nations across the economic spectrum, challenging – as in the case of the Cumbrian coalmine – state efforts to stop climate breakdown. Firms have to date won vast sums by using ISDS, of which fossil fuel companies have been awarded the majority. That equates to the combined GDP