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What is your understand our political system functions? Maybe similar to this. We elect MPs. They debate and pass bills. Should a majority is obtained, the bills become law. The law are enforced by the courts. That's it. Yet, that’s how it operated in the past. Not anymore.

The Advent of Secret Courts

In the modern era, overseas companies, or the billionaires who own them, can sue governments for the laws they pass, at private courts staffed by corporate lawyers. These proceedings take place away from public scrutiny. Differing from national judiciaries, these bodies provide no avenue for appeal or judicial review. Ordinary citizens are barred from bringing a case to them, and neither can our government, or even companies operating from this country. Access is granted exclusively to businesses registered abroad.

When a secret court determines that a legislative action may compromise the corporation’s projected profits, it may order damages of hundreds of millions, running into billions.

This compensation are based not on actual losses but compensation the arbitrators decide the company could potentially have made. The administration might be compelled to rescind the measure. It is hesitant to introducing similar legislation of a similar nature, for fear of incurring a lawsuit.

A Mechanism Spiralling Out of Control

Record numbers of disputes are being filed, as firms learn from each other, and investment funds bankroll lawsuits in exchange for a share of the awards. The result? Democratic sovereignty and democratic governance are becoming unaffordable.

The process is known as “investor-state dispute settlement” (ISDS). The reason it is permitted to override national legislation and the choices enacted by parliaments is that this stipulation has been incorporated – absent public approval, and typically amid a climate of total confidentiality – inside bilateral investment treaties.

A Real-World Example: The Cumbrian Coal Mine

Twelve months ago, environmental campaigners achieved a major legal triumph at the High Court. The presiding officer determined that schemes to dig the first major coal mine in the UK for a generation, in Cumbria, were illegally sanctioned by the outgoing administration, which had accepted the extraordinary assertion that the mine would have no consequence on our carbon budgets. The Labour government then withdrew the licence the Tories had issued. Currently, this victory faces being overturned by an foreign court reporting to exclusively the entities filing the suit.

Last August, a firm whose beneficial owners reside in the offshore financial centre lodged a claim against the UK government. Recently a arbitration panel in Washington DC was convened to consider the case.

The claimant is litigating against the UK for the money it would have generated if the mine had been permitted to commence operations. We have no clear indication how much this might be. Who is serving as its counsel in opposition to the state? An elected representative, and former attorney-general in the outgoing administration, the self-proclaimed patriot the MP. The administration makes a decision, the domestic court upholds it, then a overseas corporation challenges it through an secretive private court, and a sitting MP acts on its behalf.

A Sanctions Challenge

On the same day that the court on the coalmine case was established, it was revealed from a government response that the UK is subject to further litigation under ISDS by a Russian billionaire, a sanctioned individual. Details are nothing of the case so far, but it appears probable that he will utilise the tribunal to challenge the sanctions the UK levied against him subsequent to the war in Ukraine. He has initiated proceedings against another European state with similar intent, demanding sixteen billion dollars: an amount representing half state's yearly income. Included in the counsel representing him there? a prominent lawyer, wife of the ex-UK leader.

Trade specialists contend that the EU’s hesitation in utilising seized Russian assets as guarantee for its financial support package is due to Belgium’s fear that it could be taken to court in the offshore corporate courts, under a investment pact. This remarkable, unaccountable authority over elected governments could be blocking the finance Ukraine critically depends on.

Misleading Claims and Escalating Threats

The public was told that such things wouldn’t happen. In 2014, a former prime minister, promoting the most significant and hazardous of all such treaties, declared: “Britain has agreed to trade deal after trade deal and there has not been a case in the past.” An expert on this matter accused activists of “alarmism … in reality, ISDS barely touches the UK much”. The overall message was crafted to be that exclusively weaker states needed to fear these lawsuits. Warnings that “as corporations begin to understand the influence they’ve been granted, they will shift their focus from the poorer states to the wealthy nations” were greeted by general mockery.

That prediction has now materialised. Recently, oil and gas and mining firms have lodged a unprecedented number of claims against nations across the economic spectrum, challenging – similar to the UK mine – official measures to halt environmental catastrophe. Firms have thus far won $114bn by using ISDS, of which fossil fuel companies have been awarded the majority. That represents the combined GDP