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What is your perceive our democratic process operates? Perhaps similar to this. The public votes for MPs. They vote on bills. If a majority is achieved, the bills are enacted as law. Statutes are enforced by the courts. Simple as that. Yet, that was how it used to work. No longer.

The Emergence of Secret Courts

Nowadays, foreign corporations, along with the oligarchs that control them, can sue governments for the regulations they pass, at private courts made up of corporate lawyers. The cases take place away from public scrutiny. Differing from national judiciaries, these bodies grant no opportunity to appeal or judicial review. Ordinary citizens are unable to file a case to them, nor can our government, including enterprises based in this country. The door is open solely for 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, running into billions.

These sums constitute not tangible damages but money the tribunal officials conclude the company might otherwise have made. The government may have to abandon its policy. It becomes deterred from enacting future policies along the same lines, due to the risk of incurring a lawsuit.

A System Running Rampant

Historically high figures of legal actions are being brought, as firms learn from each other, and investment funds finance suits for a share of a cut of the settlements. The result? National sovereignty and democracy are becoming too costly.

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 choices enacted by parliaments is that this clause has been inserted – without democratic mandate, and often in conditions of profound opacity – inside international trade agreements.

A Concrete Example: The UK Coalmine

Last year, a conservation group won a great victory at the high court. The judge determined that proposals to excavate the first new deep coal mine in the UK for three decades, in Cumbria, were illegally sanctioned by the previous government, which had agreed to the questionable argument that the mine could have no consequence on our carbon budgets. The new government later cancelled the consent the former government had approved. Currently, this victory could be compromised by an foreign court accountable to only the corporations filing the suit.

In August, a firm whose final controllers are located in the Cayman Islands lodged a claim versus the UK government. Last week a dispute settlement body in the US capital was convened to consider the case.

The company is litigating against the UK for the revenue it could have earned if the mine had been allowed to commence operations. The public has no idea how much this could amount to. Which individual is acting on its behalf challenging the state? A sitting MP, and ex-law officer in the previous government, the noted patriot Sir Geoffrey Cox. The government makes a decision, the domestic court supports it, then a international entity contests it through an secretive offshore tribunal, and a sitting MP acts on its behalf.

An Oligarch's Challenge

Simultaneously that the court on the mining lawsuit was appointed, we learned from a parliamentary answer that the UK is subject to further litigation under ISDS by a wealthy Russian individual, a sanctioned individual. We know scarce of the case to date, but it is highly possible that he may employ the arbitration process to fight the sanctions the UK imposed on him following the war in Ukraine. He has already initiated proceedings against a small nation on these grounds, demanding a colossal sum: half that nation's yearly income. Part of the lawyers on his side? Cherie Blair, wife of the previous PM.

Trade specialists believe that the EU’s procrastination in utilising seized Russian assets as guarantee for its loan to Ukraine arises from apprehension in Brussels that it could be sued in the offshore corporate courts, under a bilateral investment treaty. This extraordinary, secretive influence over elected governments may be obstructing the funds Ukraine urgently requires.

Misleading Claims and Mounting Threats

The public was told that these scenarios wouldn’t happen. In 2014, a senior politician, championing the most significant and hazardous of all investment pacts, declared: “Britain has agreed to investment treaty upon trade deal and there has not been a problem in the past.” A consultant on this matter accused campaigners of “scaremongering … the truth is, ISDS does not affect the UK much”. The general impression appeared to be that solely developing countries had to worry about these lawsuits. Cautionary notes that “once firms grasp the authority they’ve been granted, they will shift their focus from the poorer states to the strong ones” were greeted by widespread derision.

That prediction is now a reality. In the current period, energy and extraction companies have filed a unprecedented number of cases against nations both wealthy and developing, contesting – similar to the UK mine – official measures to prevent global warming. Corporations have to date won one hundred and fourteen billion dollars via ISDS, of which oil majors have obtained the majority. That equates to the combined GDP