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What is your understand our democratic process functions? Maybe similar to this. Citizens choose MPs. They vote on bills. Should a majority is secured, the bills become law. Statutes are enforced by the courts. That's it. However, that’s how it used to work. Those days are over.

The Emergence of Offshore Tribunals

In the modern era, foreign corporations, or the billionaires behind them, are able to litigate against elected administrations for the policies they pass, at offshore tribunals composed of corporate lawyers. The cases are conducted behind closed doors. In contrast to domestic courts, these panels grant no avenue for appeal or oversight by judges. The general public are unable to file a case to them, and neither can our government, or even enterprises based in this country. The door is open only to businesses operating from foreign soil.

If a tribunal finds that a legislative action may compromise the corporation’s anticipated profits, it may order financial penalties of hundreds of millions of pounds, even billions.

This compensation are based not on tangible damages but compensation the panel members decide the company might otherwise have made. The administration might be compelled to drop the legislation. It is hesitant to introducing similar legislation along the same lines, due to the risk of being sued.

A System Growing Exponentially

Unprecedented levels of legal actions are being initiated, as firms take cues from each other, and investment funds bankroll lawsuits for a share of a portion of the takings. The outcome? Democratic sovereignty and popular rule are now prohibitively expensive.

The process is known as “investor-state dispute settlement” (ISDS). The rationale it is allowed to override domestic law and the decisions made by legislatures is that this provision has been inserted – absent public approval, and typically amid conditions of extreme secrecy – inside international trade agreements.

A Concrete Example: The Whitehaven Coalmine

Last year, environmental campaigners secured a significant win at the High Court. The judge found that schemes to excavate the first new deep coal mine in the UK for a generation, in Cumbria, had been wrongly permitted by the previous government, which had accepted the bizarre claim that the mine would have had zero effect on climate commitments. The new government later cancelled the licence the Tories had issued. Now, this success could be compromised by an offshore tribunal answering to no one but the companies bringing the case.

In August, a corporate entity whose final controllers are located in the Cayman Islands lodged a claim versus the UK government. Last week a arbitration panel in the US capital was convened to consider the case.

The claimant is seeking compensation from the UK for the revenue it would have generated if the mine had been allowed to go ahead. Citizens have no clear indication how much this might be. Which individual is serving as its counsel against the UK administration? A member of parliament, and previous senior legal advisor in the Conservative government, the self-proclaimed patriot Sir Geoffrey Cox. The government enacts a policy, the domestic court upholds it, then a foreign company challenges it through an undemocratic private court, and a sitting MP represents its behalf.

The Russian Lawsuit

Simultaneously that the panel on the coalmine case was appointed, it was revealed from a ministerial statement that the UK faces another lawsuit under ISDS by a wealthy Russian individual, Mikhail Fridman. Details are scarce of the case at present, but it is highly possible that he will utilise the arbitration process to contest the penalties the UK imposed on him subsequent to the Russian aggression. He has initiated proceedings against another European state for this reason, claiming sixteen billion dollars: half that nation's yearly budget. Among the counsel acting for him in that case? the wife of a former prime minister, married to the ex-UK leader.

Legal experts argue that the EU’s delay in using frozen Russian assets as security for its financial support package is due to concerns within Belgium that it could be subject to litigation in the offshore corporate courts, under a trade agreement. This unprecedented, unaccountable authority over elected governments might be preventing the money Ukraine critically depends on.

False Assurances and Mounting Threats

We were assured that such things were not possible. Years ago, a senior politician, promoting the biggest and most dangerous of all investment pacts, stated: “The UK has signed trade agreement after trade deal and we have never seen a issue in the past.” An adviser on this matter accused campaigners of “alarmism … the truth is, ISDS has little impact on the UK much”. The prevailing narrative appeared to be that exclusively weaker states had to worry about ISDS claims. Predictions that “when companies begin to understand the power bestowed upon them, they will redirect their efforts from the vulnerable countries to the strong ones” were greeted by scepticism.

That prediction has come to pass. This year, energy and resource corporations have filed a historic level of suits against nations both wealthy and developing, challenging – like the example of the Cumbrian coalmine – official measures to halt climate breakdown. Firms have so far won vast sums by using ISDS, of which energy giants have secured the majority. That equates to the combined GDP