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

Can you perceive our political system works? Maybe similar to this. We elect MPs. They debate and pass bills. When a majority is obtained, the bills are enacted as law. Legislation is upheld by the courts. That's it. Yet, that’s how it used to work. Those days are over.

The Advent of Secret Tribunals

Today, foreign corporations, along with the oligarchs that control them, are able to litigate against elected administrations for the policies they pass, at offshore tribunals made up of corporate lawyers. These proceedings are conducted in secret. Differing from national judiciaries, these tribunals provide no avenue for appeal or legal review. Ordinary citizens are unable to file a case to them, nor can our government, including enterprises headquartered in this country. Access is granted only to corporations based overseas.

If a tribunal determines that a law or policy might diminish the corporation’s projected profits, it may order damages of hundreds of millions of pounds, even billions.

These sums are based not on real financial harm but funds the panel members conclude the company could potentially have made. The government might be compelled to abandon its policy. It becomes deterred from introducing similar legislation in that area, due to the risk of incurring a lawsuit.

A Mechanism Growing Exponentially

Historically high figures of disputes are being filed, as firms take cues from each other, and hedge funds bankroll lawsuits in return for a share of the awards. The result? Sovereignty and democratic governance are becoming prohibitively expensive.

The process is referred to as “investor-state dispute settlement” (ISDS). The reason it is allowed to trump national legislation and the rulings made by elected bodies is that this stipulation has been incorporated – without public consent, and often in conditions of profound opacity – into bilateral investment treaties.

A Concrete Case: The Whitehaven Coal Mine

Twelve months ago, activists achieved a major legal triumph at the senior court. The presiding officer ruled that plans to excavate the first new deep coal mine in the UK for 30 years, at Whitehaven in Cumbria, were found to be wrongly permitted by the previous government, which had accepted the bizarre claim that the mine could have no consequence on our carbon budgets. The Labour government subsequently revoked the licence the former government had granted. Today, this victory could be compromised by an secret arbitration panel answering to only the companies bringing the case.

In August, a corporate entity whose ultimate owners reside in the tax haven lodged a claim challenging the UK government. Recently a arbitration panel in the US capital was established to adjudicate on it.

The company is seeking compensation from the UK for the revenue it would have generated if the mine had been permitted to go ahead. We have no idea how much this could amount to. Which individual is serving as its counsel against the British government? An elected representative, and former attorney-general in the outgoing administration, that great patriot the MP. The state passes a law, the national judiciary upholds it, then a international entity disputes it through an unaccountable arbitration panel, and a member of our parliament acts on its behalf.

The Russian Case

Concurrently that the tribunal on the mining lawsuit was convened, it was revealed from a government response that the UK is subject to further litigation under ISDS by a Russian billionaire, a sanctioned individual. We know scarce of the case at present, but it seems likely that he may employ the ISDS mechanism to challenge the penalties the UK imposed on him after the Russian aggression. He has already filed a claim against a small nation with similar intent, seeking a colossal sum: half that nation's yearly income. Among the lawyers representing him there? a prominent lawyer, spouse of the previous PM.

Legal experts believe that the EU’s delay in utilising seized Russian assets as security for its financial support package arises from Belgium’s fear that it could be subject to litigation in the ISDS tribunals, under a trade agreement. This unprecedented, secretive influence over sovereign states might be preventing the money Ukraine desperately needs.

Misleading Claims and Escalating Threats

The public was told that these events could not occur. Years ago, a government leader, championing the most significant and hazardous of all such treaties, declared: “We’ve signed trade agreement upon trade deal and there has never been a problem in the past.” An expert on this topic accused critics of “alarmism … the truth is, ISDS has little impact on the UK much”. The general impression appeared to be that only poorer nations needed to fear ISDS claims. Cautionary notes that “as corporations grasp the power bestowed upon them, they will redirect their efforts from the poorer states to the strong ones” were greeted by widespread derision.

That threat has now materialised. In the current period, energy and resource corporations have filed a record number of suits against nations rich and poor, challenging – as in the case of the Cumbrian coalmine – government attempts to stop environmental catastrophe. Companies have so far won one hundred and fourteen billion dollars by using ISDS, of which oil majors have secured the majority. That equates to the combined GDP