Welcome, International Oligarchs and Firms! Kindly Proceed and Sue the UK for Vast Sums.

What is your understand our democratic process works? It could be something like this. The public votes for MPs. They vote on bills. When a majority is secured, the bills become law. Statutes are enforced by the courts. End of story. However, that used to be how it once functioned. Not anymore.

The Emergence of Secret Courts

Today, foreign corporations, and the billionaires that control them, can sue governments for the regulations they pass, at secret arbitration panels made up of commercial attorneys. These proceedings take place in secret. Unlike our courts, these bodies provide no right of appeal or legal review. You or I are barred from bringing a case to them, and neither can our government, including businesses based in this country. The door is open solely for corporations based overseas.

If a tribunal rules that a law or policy could harm the corporation’s anticipated profits, it may order damages of hundreds of millions, running into billions.

This compensation are based not on real financial harm but funds the panel members decide the company could potentially have made. The administration could be forced to rescind the measure. It will be discouraged from introducing similar legislation in that area, for fear of being sued.

A System Growing Exponentially

Unprecedented levels of cases are being filed, as firms learn from each other, and hedge funds bankroll lawsuits for a share of a portion of the takings. The consequence? National sovereignty and popular rule are turning into too costly.

The process is referred to as “investor-state dispute settlement” (ISDS). The rationale it is permitted to override domestic law and the choices enacted by legislatures is that this clause has been incorporated – without democratic mandate, and frequently under a climate of extreme secrecy – inside trade treaties.

A Concrete Case: The Whitehaven Coal Mine

Last year, a conservation group achieved a major legal triumph at the High Court. The judge ruled that plans to open the first new deep coal mine in the UK for three decades, at Whitehaven in Cumbria, were found to be wrongly permitted by the Conservative government, which had accepted the bizarre claim that the mine would have no impact on national carbon targets. The Labour government then withdrew the consent the Tories had approved. Currently, this legal outcome is under threat by an secret arbitration panel answering to exclusively the entities filing the suit.

In August, a firm whose beneficial owners are located in the Cayman Islands filed a lawsuit against the UK government. Last week a dispute settlement body in the US capital was convened to consider the case.

The claimant is seeking compensation from the UK for the revenue it could have earned if the mine had been allowed to commence operations. We have no clear indication how much this sum represents. What legal team is acting on its behalf challenging the UK administration? A member of parliament, and former attorney-general in the Conservative government, that great patriot Geoffrey Cox. The administration enacts a policy, the national judiciary supports it, then a overseas corporation challenges it through an unaccountable offshore tribunal, and a sitting MP works for its behalf.

An Oligarch's Lawsuit

On the same day that the tribunal on the coalmine case was established, we learned from a ministerial statement that the UK is subject to further litigation under ISDS by a wealthy Russian individual, a sanctioned individual. The public knows little of the case to date, but it is highly possible that he may employ the ISDS mechanism to fight the restrictions the UK imposed on him following the invasion of Ukraine. He has already filed a claim against a small nation with similar intent, claiming a colossal sum: half that government’s yearly income. Part of the counsel acting for him in that case? Cherie Blair, wife of the ex-UK leader.

Legal experts believe that the EU’s delay in leveraging immobilised state funds as collateral for its aid for Ukraine arises from Belgium’s fear that it could be taken to court in the ISDS tribunals, under a investment pact. This extraordinary, secretive influence over democratic administrations may be obstructing the funds Ukraine critically depends on.

False Assurances and Growing Costs

We were assured that these events wouldn’t happen. In 2014, a former prime minister, promoting the most significant and hazardous of all these agreements, told us: “We’ve signed trade deal after trade deal and we have never seen a case in the past.” A consultant on this issue described campaigners of “alarmism … in reality, ISDS barely touches the UK much”. The overall message was crafted to be that only poorer nations needed to fear such legal actions. Predictions that “as corporations start to realise the power bestowed upon them, they will redirect their efforts from the poorer states to the developed economies” were met with scepticism.

That warning is now a reality. In the current period, oil and gas and mining firms have lodged a historic level of cases against nations both wealthy and developing, challenging – like the example of the Whitehaven project – government attempts to stop global warming. Companies have so far won vast sums through ISDS, of which energy giants have obtained $84bn. That is equivalent to the combined GDP