Greetings, International Magnates and Firms! Kindly Come and Litigate Against the UK for Billions.

What is your perceive our political system operates? Maybe along the lines of this. We elect MPs. They debate and pass bills. If a majority is obtained, the bills pass into law. Statutes is upheld by the courts. Simple as that. However, that used to be how it operated in the past. No longer.

The Emergence of Shadow Courts

Nowadays, overseas companies, or the wealthy individuals behind them, have the power to sue governments for the laws they pass, at private courts composed of commercial attorneys. These proceedings are held in secret. In contrast to domestic courts, these bodies grant no avenue for appeal or judicial review. Ordinary citizens are unable to file a case to them, just as our government, including companies operating from this country. Access is granted solely for businesses based overseas.

If a tribunal finds that a legislative action may compromise the corporation’s expected profits, it has the power to grant damages of hundreds of millions of pounds, potentially billions.

These sums constitute not real financial harm but compensation the panel members decide the company would perhaps have made. The state could be forced to drop the legislation. It will be discouraged from passing future laws in that area, worried about being sued.

A System Growing Exponentially

Record numbers of legal actions are being filed, as firms observe each other, and investment funds fund legal actions in return for a cut of the awards. The result? Democratic sovereignty and popular rule are now unaffordable.

This mechanism is known as “investor-state dispute settlement” (ISDS). The explanation it is allowed to override national legislation and the rulings taken by elected bodies is that this clause has been written – absent public approval, and frequently under a climate of extreme secrecy – into international trade agreements.

A Concrete Instance: The Cumbrian Coalmine

Last year, activists achieved a major legal triumph at the high court. The justice found that proposals to excavate the first deep coalmine in the UK for 30 years, at Whitehaven in Cumbria, were unlawfully approved by the previous government, which had accepted the questionable argument that the mine would have no consequence on national carbon targets. The incoming administration later cancelled the permission the former government had approved. Now, this victory could be compromised by an foreign court answering to exclusively the corporations bringing the case.

Last August, a firm whose ultimate owners are located in the tax haven filed a lawsuit against the UK government. Last week a tribunal in Washington DC was set up to hear it.

This firm is suing the UK for the revenue it might have made if the mine had been permitted to go ahead. We have no idea how much this might be. Which individual is representing it in opposition to the state? A sitting MP, and ex-law officer in the previous government, the noted patriot Geoffrey Cox. The state passes a law, the national judiciary supports it, then a overseas corporation contests it through an undemocratic offshore tribunal, and a elected official works for its behalf.

The Russian Challenge

Simultaneously that the panel on the coal mine dispute was convened, we learned from a ministerial statement that the UK is also being sued under ISDS by a Russian billionaire, a sanctioned individual. The public knows scarce of the case at present, but it appears probable that he’ll use the tribunal to contest the sanctions the UK imposed on him subsequent to the Russian aggression. He has filed a claim against another European state on these grounds, demanding a colossal sum: half that nation's yearly budget. Among the lawyers on his side? a prominent lawyer, spouse of the previous PM.

Trade specialists believe that the EU’s procrastination in utilising seized Russian assets as security for its financial support package arises from Belgium’s fear that it could be taken to court in the offshore corporate courts, under a investment pact. This remarkable, unaccountable authority over democratic administrations may be obstructing the funds Ukraine desperately needs.

False Assurances and Mounting Risks

Politicians promised that these events were not possible. Years ago, a government leader, promoting the biggest and most dangerous of all these agreements, told us: “Britain has agreed to trade deal after trade deal and there has never been a issue in the past.” A consultant on this issue labelled activists of “exaggeration … the fact is, ISDS barely touches the UK much”. The prevailing narrative appeared to be that solely developing countries needed to fear such legal actions. Predictions that “as corporations start to realise the influence they now possess, they will turn their attention from the vulnerable countries to the strong ones” were dismissed with widespread derision.

That threat has come to pass. This year, fossil fuel and mining firms have lodged a record number of cases against nations across the economic spectrum, contesting – similar to the UK mine – official measures to stop environmental catastrophe. Firms have so far won $114bn by using ISDS, of which fossil fuel companies have been awarded the majority. That equates to the combined GDP