Greetings, Foreign Magnates and Companies! Please Proceed and Take Legal Action Against the UK for Billions of Pounds.

What is your perceive our system of government operates? It could be something like this. The public votes for MPs. They debate and pass bills. Should a majority is achieved, the bills pass into law. The law is maintained by the courts. End of story. Well, that’s how it used to work. No longer.

The Rise of Shadow Arbitration Panels

Today, foreign corporations, along with the oligarchs that control them, can sue elected administrations for the laws they pass, at secret arbitration panels made up of business advocates. The cases are conducted away from public scrutiny. Unlike our courts, these panels provide no right of appeal or legal review. Ordinary citizens are barred from bringing a case to them, nor can our government, including enterprises operating from this country. They are open exclusively to entities registered abroad.

If a tribunal rules that a government measure might diminish the corporation’s projected profits, it has the power to grant damages of vast sums, running into billions.

These sums constitute not tangible damages but compensation the arbitrators determine the company might otherwise have made. The administration could be forced to rescind the measure. It will be discouraged from enacting future policies along the same lines, for fear of incurring a lawsuit.

A Mechanism Spiralling Out of Control

Unprecedented levels of legal actions are being filed, as companies learn from each other, and investment funds fund legal actions in return for a cut of the settlements. The consequence? Democratic sovereignty and democracy are turning into too costly.

The system is known as “investor-state dispute settlement” (ISDS). The reason it is permitted to supersede national legislation and the rulings made by elected bodies is that this stipulation has been incorporated – absent public approval, and frequently under a climate of extreme secrecy – within international trade agreements.

A Concrete Instance: The Cumbrian Coal Mine

A year ago, activists won a great victory at the high court. The judge found that proposals to open the first deep coalmine in the UK for a generation, at Whitehaven in Cumbria, were wrongly permitted by the previous government, which had agreed to the questionable argument that the mine could have no consequence on national carbon targets. The Labour government then withdrew the licence the previous administration had approved. Currently, this success is under threat by an secret arbitration panel reporting to exclusively the companies bringing the case.

Last August, a corporate entity whose final controllers reside in the Cayman Islands lodged a claim against the UK government. The previous week a dispute settlement body in Washington DC was convened to adjudicate on it.

This firm is suing the UK for the money it would have generated if the mine had been allowed to proceed. We have no clear indication how much this might be. Which individual is representing it in opposition to the state? An elected representative, and ex-law officer in the outgoing administration, the noted patriot Sir Geoffrey Cox. The state passes a law, the domestic court supports it, then a foreign company contests it through an undemocratic offshore tribunal, and a elected official represents its behalf.

A Sanctions Challenge

On the same day that the court on the mining lawsuit was appointed, we learned from a government response that the UK is subject to further litigation under ISDS by a Russian billionaire, Mikhail Fridman. Details are nothing of the case at present, but it seems likely that he may employ the tribunal to challenge the sanctions the UK imposed on him following the Russian aggression. He has already filed a claim against Luxembourg on these grounds, seeking $16bn: equivalent to half of state's annual revenue. Part of the counsel representing him there? Cherie Blair, married to the ex-UK leader.

Trade specialists argue that the EU’s hesitation in utilising seized Russian assets as security for its financial support package stems from apprehension in Brussels that it could be taken to court in the offshore corporate courts, under a investment pact. This remarkable, undemocratic power over democratic administrations may be obstructing the funds Ukraine desperately needs.

Misleading Claims and Escalating Threats

Politicians promised that such things were not possible. In 2014, a government leader, advocating for the biggest and most dangerous of all these agreements, told us: “We’ve signed trade deal after trade deal and there has not been a issue in the past.” A consultant on this matter described critics of “exaggeration … in reality, ISDS has little impact on the UK much”. The general impression seemed to be that exclusively weaker states needed to fear these lawsuits. Warnings that “when companies grasp the authority they’ve been granted, they will redirect their efforts from the vulnerable countries to the developed economies” were greeted by general mockery.

That threat is now a reality. In the current period, oil and gas and mining firms have initiated a record number of cases against nations across the economic spectrum, challenging – as in the case of the UK mine – government attempts to halt global warming. Corporations have thus far won $114bn via ISDS, of which oil majors have secured $84bn. That equates to the combined GDP