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Can you understand our democratic process works? Perhaps along the lines of this. We elect MPs. They legislate on bills. When a majority is achieved, the bills become law. Legislation is upheld by the courts. End of story. Yet, that was how it operated in the past. Not anymore.

The Emergence of Secret Tribunals

Today, foreign corporations, along with the billionaires who own them, are able to litigate against governments for the policies they pass, at private courts composed of commercial attorneys. The cases are held in secret. In contrast to domestic courts, these tribunals grant no avenue for appeal or legal review. You or I are barred from bringing a case to them, nor can our government, or even enterprises operating from this country. Access is granted solely for businesses based overseas.

Should an arbitration panel rules that a legislative action may compromise the corporation’s anticipated profits, it may order damages of hundreds of millions, potentially billions.

These sums are based not on tangible damages but compensation the panel members conclude the company would perhaps have made. The state might be compelled to rescind the measure. It is hesitant to passing future laws of a similar nature, due to the risk of facing litigation.

A Mechanism Spiralling Out of Control

Historically high figures of disputes are being brought, as firms take cues from each other, and investment funds bankroll lawsuits for a share of a portion of the settlements. The result? Democratic sovereignty and democracy are now too costly.

The system is referred to as “investor-state dispute settlement” (ISDS). The reason it is allowed to override national legislation and the decisions taken by parliaments is that this clause has been written – without public consent, and frequently under an atmosphere of total confidentiality – into trade treaties.

A Concrete Instance: The Cumbrian Coalmine

Last year, activists achieved a major legal triumph at the senior court. The judge found that schemes to excavate the first deep coalmine in the UK for 30 years, in northwest England, were found to be wrongly permitted by the outgoing administration, which had accepted the extraordinary assertion that the mine could have zero effect on our carbon budgets. The new government then withdrew the permission the Tories had approved. Currently, this legal outcome could be compromised by an foreign court reporting to no one but the entities petitioning it.

During August, a company whose beneficial owners reside in the offshore financial centre filed a lawsuit against the UK government. Last week a tribunal in the United States was set up to hear it.

This firm is litigating against the UK for the profits it would have generated if the mine had been permitted to commence operations. The public has no idea how much this might be. Which individual is serving as its counsel in opposition to the British government? A sitting MP, and previous senior legal advisor in the previous government, that great patriot the MP. The administration passes a law, the high court supports it, then a foreign company challenges it through an unaccountable arbitration panel, and a sitting MP works for its behalf.

A Sanctions Lawsuit

Simultaneously that the court on the coal mine dispute was convened, information emerged from a government response that the UK is subject to further litigation under ISDS by a Russian oligarch, a sanctioned individual. We know nothing of the case at present, but it seems likely that he may employ the arbitration process to fight the penalties the UK imposed on him after the Russian aggression. He has initiated proceedings against a small nation for this reason, claiming $16bn: an amount representing half government’s yearly budget. Part of the counsel on his side? Cherie Blair, wife of the former British prime minister.

International law scholars believe that the EU’s delay in leveraging immobilised Russian assets as collateral for its loan to Ukraine is due to Belgium’s fear that it could be taken to court in the secret arbitration panels, under a bilateral investment treaty. This unprecedented, undemocratic power over democratic administrations may be obstructing the funds Ukraine desperately needs.

Empty Promises and Growing Risks

We were assured that these scenarios wouldn’t happen. In 2014, a government leader, advocating for the most significant and hazardous of all these agreements, declared: “Britain has agreed to investment treaty upon trade deal and there has never been a issue in the past.” An expert on this topic accused activists of “alarmism … the fact is, ISDS barely touches the UK much”. The overall message seemed to be that only poorer nations should be concerned by such legal actions. Warnings that “as corporations grasp the authority they now possess, they will shift their focus from the weak nations to the wealthy nations” were dismissed with widespread derision.

That warning has come to pass. In the current period, fossil fuel and extraction companies have initiated a historic level of claims against nations both wealthy and developing, contesting – like the example of the Whitehaven project – state efforts to prevent global warming. Corporations have thus far won $114bn through ISDS, of which oil majors have been awarded eighty-four billion dollars. That equates to the combined GDP