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What is your understand our political system functions? Perhaps something like this. We elect MPs. They vote on bills. When a majority is obtained, the bills pass into law. Statutes is maintained by the courts. That's it. However, that was how it operated in the past. Those days are over.

The Rise of Secret Courts

Today, foreign corporations, or the billionaires who own them, can sue nation states for the regulations they pass, at secret arbitration panels composed of corporate lawyers. The cases take place away from public scrutiny. Unlike our courts, these bodies provide no avenue for appeal or judicial review. Ordinary citizens are barred from bringing a case to them, just as our government, or even companies based in this country. Access is granted exclusively to entities operating from foreign soil.

When a secret court finds that a legislative action could harm the corporation’s anticipated profits, it has the power to grant financial penalties of hundreds of millions, potentially billions.

These awards constitute not tangible damages but compensation the panel members determine the company might otherwise have made. The state may have to abandon its policy. It will be discouraged from enacting future policies along the same lines, for fear of incurring a lawsuit.

A Process Growing Exponentially

Unprecedented levels of cases are being brought, as companies take cues from each other, and hedge funds bankroll lawsuits in return for a share of the takings. The consequence? Democratic sovereignty and popular rule are turning into too costly.

The system is known as “investor-state dispute settlement” (ISDS). The rationale it is allowed to trump a country's own laws and the rulings enacted by elected bodies is that this stipulation has been inserted – without public consent, and often in an atmosphere of total confidentiality – into international trade agreements.

A Concrete Instance: The Cumbrian Coalmine

Twelve months ago, activists secured a significant win at the high court. The judge ruled that plans to dig the first major coal mine in the UK for a generation, in northwest England, were illegally sanctioned by the previous government, which had agreed to the questionable argument that the mine would have no impact on our carbon budgets. The incoming administration then withdrew the licence the Tories had issued. Currently, this success faces being overturned by an offshore tribunal reporting to only the entities filing the suit.

In August, a company whose beneficial owners are based in the offshore financial centre lodged a claim versus the UK government. The previous week a arbitration panel in Washington DC was convened to consider the case.

The company is litigating against the UK for the revenue it would have generated if the mine had been permitted to go ahead. Citizens have no clear indication how much this could amount to. What legal team is acting on its behalf in opposition to the state? A sitting MP, and former attorney-general in the Conservative government, that great patriot Geoffrey Cox. The government passes a law, the domestic court upholds it, then a foreign company disputes it through an undemocratic private court, and a elected official represents its behalf.

A Sanctions Challenge

Simultaneously that the tribunal on the coalmine case was convened, information emerged from a parliamentary answer that the UK faces another lawsuit under ISDS by a wealthy Russian individual, an oligarch. We know scarce of the case to date, but it appears probable that he may employ the ISDS mechanism to challenge the penalties the UK levied against him subsequent to the Russian aggression. He has previously initiated proceedings against another European state with similar intent, demanding a colossal sum: equivalent to half of state's yearly budget. Part of the counsel acting for him in that case? Cherie Blair, spouse of the previous PM.

International law scholars contend that the EU’s hesitation in utilising seized oligarchs' funds as security for its aid for Ukraine arises from apprehension in Brussels that it could be sued in the ISDS tribunals, under a bilateral investment treaty. This remarkable, secretive influence over elected governments could be blocking the funds Ukraine urgently requires.

Empty Promises and Escalating Costs

Politicians promised that these events were not possible. Previously, a senior politician, championing the largest and riskiest of all these agreements, stated: “Britain has agreed to trade agreement upon trade deal and we have never seen a case in the past.” An adviser on this topic described campaigners of “scaremongering … in reality, ISDS barely touches the UK much”. The overall message was crafted to be that exclusively weaker states had to worry about such legal actions. Warnings that “as corporations begin to understand the influence bestowed upon them, they will redirect their efforts from the vulnerable countries to the developed economies” were greeted by general mockery.

That prediction has come to pass. This year, fossil fuel and resource corporations have initiated a historic level of cases against nations both wealthy and developing, opposing – as in the case of the UK mine – official measures to stop global warming. Companies have thus far won vast sums via ISDS, of which energy giants have secured $84bn. That is equivalent to the combined GDP