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What is your understand our democratic process functions? Maybe similar to this. The public votes for MPs. They vote on bills. When a majority is secured, the bills are enacted as law. Legislation are enforced by the courts. End of story. Well, that was how it used to work. Not anymore.

The Rise of Secret Tribunals

Nowadays, foreign corporations, and the wealthy individuals behind them, are able to litigate against governments for the policies they pass, at private courts staffed by business advocates. These proceedings take place in secret. Differing from national judiciaries, these tribunals provide no opportunity to appeal or judicial review. Ordinary citizens cannot take a case to them, just as our government, or even businesses headquartered in this country. The door is open solely for entities operating from foreign soil.

If a tribunal rules that a law or policy may compromise the corporation’s expected profits, it has the power to grant financial penalties of hundreds of millions of pounds, even billions.

These awards constitute not actual losses but money the tribunal officials decide the company might otherwise have made. The government could be forced to abandon its policy. It becomes hesitant to introducing similar legislation of a similar nature, for fear of incurring a lawsuit.

A Process Running Rampant

Record numbers of legal actions are being initiated, as firms learn from each other, and investment funds fund legal actions for a share of a cut of the awards. The consequence? Sovereignty and popular rule are now unaffordable.

The process is referred to as “investor-state dispute settlement” (ISDS). The reason it can supersede national legislation and the rulings enacted by legislatures is that this provision has been written – without public consent, and frequently under conditions of extreme secrecy – inside trade treaties.

A Real-World Example: The Cumbrian Coal Mine

Last year, activists secured a significant win at the senior court. The judge found that proposals to excavate the first new deep coal mine in the UK for three decades, in northwest England, were found to be wrongly permitted by the previous government, which had endorsed the questionable argument that the mine could have no impact on our carbon budgets. The new government subsequently revoked the permission the previous administration had issued. Currently, this legal outcome could be compromised by an secret arbitration panel answering to only the entities filing the suit.

During August, a corporate entity whose beneficial owners are located in the tax haven lodged a claim versus the UK government. Last week a tribunal in the United States was established to hear it.

This firm is seeking compensation from the UK for the revenue it could have earned if the mine had been permitted to go ahead. We have little idea how much this could amount to. What legal team is serving as its counsel in opposition to the state? An elected representative, and former attorney-general in the Conservative government, the self-proclaimed patriot Sir Geoffrey Cox. The administration makes a decision, the national judiciary supports it, then a overseas corporation challenges it through an secretive private court, and a member of our parliament acts on its behalf.

A Sanctions Lawsuit

On the same day that the tribunal on the coal mine dispute was convened, we learned from a government response that the UK is also being sued under ISDS by a Russian oligarch, Mikhail Fridman. We know scarce of the case so far, but it seems likely that he’ll use the tribunal to fight the sanctions the UK enacted against him after the Russian aggression. He has previously started suing a small nation with similar intent, seeking $16bn: half that state's yearly income. Among the lawyers representing him there? the wife of a former prime minister, wife of the former British prime minister.

Trade specialists believe that the EU’s procrastination in using frozen Russian assets as guarantee for its aid for Ukraine arises from concerns within Belgium that it could be subject to litigation in the ISDS tribunals, under a trade agreement. This remarkable, undemocratic power over sovereign states may be obstructing the funds Ukraine critically depends on.

False Assurances and Escalating Risks

Politicians promised that these events could not occur. Years ago, a senior politician, championing the biggest and most dangerous of all such treaties, told us: “Britain has agreed to trade agreement upon trade deal and there has never been a issue in the past.” An expert on this matter accused campaigners of “exaggeration … the truth is, ISDS has little impact on the UK much”. The prevailing narrative appeared to be that exclusively weaker states should be concerned by ISDS claims. Warnings that “as corporations begin to understand the influence bestowed upon them, they will shift their focus from the weak nations to the developed economies” were greeted by scepticism.

That warning has now materialised. This year, fossil fuel and resource corporations have filed a historic level of cases against nations across the economic spectrum, opposing – like the example of the Whitehaven project – state efforts to prevent global warming. Corporations have thus far won $114bn by using ISDS, of which oil majors have secured $84bn. That represents the combined GDP