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What is your perceive our political system operates? It could be along the lines of this. The public votes for MPs. They vote on bills. Should a majority is secured, the bills become law. Statutes is maintained by the courts. That's it. Well, that was how it once functioned. No longer.

The Rise of Offshore Tribunals

Today, overseas companies, along with the wealthy individuals behind them, can sue elected administrations for the policies they pass, at secret arbitration panels composed of commercial attorneys. The cases are conducted in secret. In contrast to domestic courts, these tribunals allow no avenue for appeal or judicial review. The general public are barred from bringing a case to them, just as our government, including businesses based in this country. The door is open exclusively to businesses based overseas.

If a tribunal determines that a legislative action may compromise the corporation’s projected profits, it has the power to grant damages of hundreds of millions, running into billions.

These sums constitute not real financial harm but funds the panel members determine the company might otherwise have made. The administration might be compelled to drop the legislation. It becomes deterred from introducing similar legislation along the same lines, for fear of being sued.

A Mechanism Growing Exponentially

Record numbers of disputes are being filed, as corporations take cues from each other, and private equity fund legal actions in exchange for a share of the awards. The result? Sovereignty and popular rule are now unaffordable.

The process is referred to as “investor-state dispute settlement” (ISDS). The explanation it is permitted to trump national legislation and the decisions taken by legislatures is that this stipulation has been incorporated – without democratic mandate, and typically amid a climate of extreme secrecy – into international trade agreements.

A Real-World Case: The Whitehaven Coalmine

Last year, environmental campaigners achieved a major legal triumph at the High Court. The presiding officer determined that plans to excavate the first major coal mine in the UK for three decades, at Whitehaven in Cumbria, had been unlawfully approved by the previous government, which had agreed to the questionable argument that the mine would have no consequence on our carbon budgets. The Labour government subsequently revoked the licence the former government had granted. Today, this success faces being overturned by an secret arbitration panel reporting to only the entities petitioning it.

In August, a corporate entity whose beneficial owners are located in the offshore financial centre filed a lawsuit challenging the UK government. The previous week a arbitration panel in Washington DC was convened to hear it.

This firm is suing the UK for the revenue 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 against the British government? A member of parliament, and former attorney-general in the Conservative government, the noted patriot the MP. The administration enacts a policy, the high court supports it, then a foreign company challenges it through an unaccountable offshore tribunal, and a member of our parliament acts on its behalf.

The Russian Lawsuit

On the same day that the panel on the coalmine case was appointed, we learned from a government response that the UK is subject to further litigation under ISDS by a wealthy Russian individual, an oligarch. Details are scarce of the case at present, but it is highly possible that he will utilise the ISDS mechanism to contest the sanctions the UK enacted against him subsequent to the war in Ukraine. He has previously started suing another European state on these grounds, demanding sixteen billion dollars: equivalent to half of government’s annual revenue. Included in the counsel representing him there? Cherie Blair, wife of the ex-UK leader.

Trade specialists argue that the EU’s hesitation in leveraging immobilised oligarchs' funds as guarantee for its loan to Ukraine is due to apprehension in Brussels that it could be subject to litigation in the offshore corporate courts, under a bilateral investment treaty. This remarkable, secretive influence over democratic administrations may be obstructing the money Ukraine critically depends on.

False Assurances and Mounting Risks

The public was told that these scenarios were not possible. Previously, a former prime minister, championing the biggest and most dangerous of all these agreements, told us: “The UK has signed trade deal after trade deal and there has not been a issue in the past.” A consultant on this matter accused campaigners of “alarmism … the fact is, ISDS barely touches the UK much”. The general impression seemed to be that exclusively weaker states had to worry about ISDS claims. Cautionary notes that “as corporations start to realise the influence they’ve been granted, they will redirect their efforts from the vulnerable countries to the strong ones” were greeted by scepticism.

That prediction has come to pass. Recently, oil and gas and mining firms have filed a historic level of suits against nations rich and poor, opposing – similar to the Cumbrian coalmine – government attempts to halt environmental catastrophe. Corporations have to date won $114bn by using ISDS, of which oil majors have obtained the majority. That represents the combined GDP