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What is your understand our political system functions? Maybe along the lines of this. Citizens choose MPs. They legislate on bills. If a majority is secured, the bills are enacted as law. Statutes are enforced by the courts. End of story. Yet, that used to be how it once functioned. Those days are over.

The Rise of Secret Tribunals

In the modern era, foreign corporations, along with the wealthy individuals behind them, have the power to sue nation states for the laws they pass, at secret arbitration panels made up of business advocates. These proceedings are conducted away from public scrutiny. In contrast to domestic courts, these tribunals grant no right of appeal or oversight by judges. The general public cannot take a case to them, nor can our government, or even businesses operating from this country. They are open only to businesses operating from foreign soil.

If a tribunal finds that a legislative action might diminish the corporation’s anticipated profits, it has the power to grant damages of vast sums, even billions.

These sums are based not on tangible damages but money the arbitrators determine the company might otherwise have made. The government may have to abandon its policy. It is discouraged from enacting future policies in that area, worried about being sued.

A System Spiralling Out of Control

Unprecedented levels of cases are being brought, as companies take cues from each other, and hedge funds bankroll lawsuits in exchange for a share of the settlements. The result? Sovereignty and popular rule are now unaffordable.

This mechanism is known as “investor-state dispute settlement” (ISDS). The rationale it can supersede domestic law and the choices taken by elected bodies is that this clause has been inserted – without public consent, and often in an atmosphere of total confidentiality – inside international trade agreements.

A Specific Case: The Cumbrian Coal Mine

Last year, environmental campaigners achieved a major legal triumph at the High Court. The judge ruled that schemes to excavate the first new deep coal mine in the UK for 30 years, at Whitehaven in Cumbria, were wrongly permitted by the Conservative government, which had accepted the bizarre claim that the mine would have no consequence on national carbon targets. The Labour government then withdrew the licence the previous administration had issued. Currently, this success is under threat by an offshore tribunal reporting to no one but the corporations filing the suit.

In August, a firm whose final controllers are based in the Cayman Islands lodged a claim against the UK government. The previous week a arbitration panel in the United States was established to consider the case.

This firm is litigating against the UK for the profits it might have made if the mine had been allowed to commence operations. We have no idea how much this might be. Who is representing it against the state? A member of parliament, and former attorney-general in the Conservative government, the self-proclaimed patriot the MP. The government makes a decision, the national judiciary validates it, then a international entity challenges it through an undemocratic offshore tribunal, and a sitting MP works for its behalf.

A Sanctions Challenge

Simultaneously that the court on the coal mine dispute was convened, we learned from a government response that the UK faces another lawsuit under ISDS by a Russian oligarch, an oligarch. We know nothing of the case so far, but it appears probable that he will utilise the tribunal to fight the sanctions the UK imposed on him after the Russian aggression. He has already initiated proceedings against another European state with similar intent, seeking $16bn: half that government’s yearly income. Part of the legal team acting for him in that case? a prominent lawyer, spouse of the former British prime minister.

Legal experts contend that the EU’s hesitation in utilising seized state funds as collateral for its financial support package is due to apprehension in Brussels that it could be taken to court in the ISDS tribunals, under a investment pact. This unprecedented, undemocratic power over elected governments might be preventing the finance Ukraine critically depends on.

Misleading Claims and Escalating Threats

The public was told that these events could not occur. In 2014, a government leader, advocating for the most significant and hazardous 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.” An expert on this topic accused activists of “alarmism … in reality, ISDS barely touches the UK much”. The general impression appeared to be that solely developing countries had to worry about these lawsuits. Warnings that “as corporations grasp the authority they’ve been granted, they will redirect their efforts from the vulnerable countries to the wealthy nations” were greeted by widespread derision.

That warning is now a reality. In the current period, fossil fuel and mining firms have lodged a historic level of suits against nations both wealthy and developing, challenging – similar to the Cumbrian coalmine – state efforts to stop environmental catastrophe. Firms have thus far won vast sums through ISDS, of which oil majors have been awarded $84bn. That equates to the combined GDP