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Can you understand our political system operates? Perhaps something like this. Citizens choose MPs. They debate and pass bills. If a majority is secured, the bills are enacted as law. Statutes is maintained by the courts. That's it. Well, that was how it operated in the past. No longer.

The Advent of Shadow Arbitration Panels

Nowadays, international firms, and the oligarchs that control them, are able to litigate against nation states for the policies they pass, at secret arbitration panels made up of business advocates. Such disputes are held in secret. In contrast to domestic courts, these bodies grant no opportunity to appeal or oversight by judges. The general public are barred from bringing a case to them, and neither can our government, including companies operating from this country. The door is open only to entities based overseas.

Should an arbitration panel rules that a law or policy may compromise the corporation’s anticipated profits, it can award damages of vast sums, even billions.

These sums constitute not actual losses but money the tribunal officials decide the company would perhaps have made. The state may have to abandon its policy. It will be discouraged from enacting future policies of a similar nature, worried about being sued.

A Process Spiralling Out of Control

Record numbers of disputes are being initiated, as firms take cues from each other, and investment funds fund legal actions for a share of a share of the settlements. The outcome? Sovereignty and popular rule are now unaffordable.

The system is known as “investor-state dispute settlement” (ISDS). The reason it is allowed to supersede national legislation and the decisions taken by elected bodies is that this provision has been written – absent public approval, and typically amid an atmosphere of total confidentiality – inside international trade agreements.

A Real-World Instance: The Whitehaven Coal Mine

A year ago, activists secured a significant win at the high court. The judge determined that schemes to dig the first deep coalmine in the UK for 30 years, at Whitehaven in Cumbria, had been illegally sanctioned by the Conservative government, which had endorsed the bizarre claim that the mine would have had zero effect on our carbon budgets. The new government then withdrew the consent the Tories had granted. Now, this success could be compromised by an secret arbitration panel answering to only the companies filing the suit.

During August, a company whose final controllers are based in the offshore financial centre filed a lawsuit versus the UK government. The previous week a dispute settlement body in the US capital was established to adjudicate on it.

The claimant is litigating against the UK for the money it would have generated if the mine had received permission to proceed. Citizens have little idea how much this might be. What legal team is serving as its counsel in opposition to the UK administration? A member of parliament, and former attorney-general in the Conservative government, that great patriot Geoffrey Cox. The administration makes a decision, the high court supports it, then a foreign company contests it through an secretive arbitration panel, and a sitting MP works for its behalf.

An Oligarch's Case

Simultaneously that the court on the coalmine case was established, it was revealed from a government response that the UK is subject to further litigation under ISDS by a wealthy Russian individual, Mikhail Fridman. Details are little of the case so far, but it is highly possible that he will utilise the arbitration process to contest the sanctions the UK enacted against him subsequent to the Russian aggression. He has filed a claim against another European state for this reason, seeking a colossal sum: equivalent to half of nation's yearly income. Part of the legal team representing him there? a prominent lawyer, spouse of the ex-UK leader.

Trade specialists contend that the EU’s hesitation in leveraging immobilised oligarchs' funds as collateral for its aid for Ukraine is due to Belgium’s fear that it could be taken to court in the secret arbitration panels, under a investment pact. This extraordinary, secretive influence over elected governments could be blocking the money Ukraine desperately needs.

Misleading Claims and Escalating Costs

Politicians promised that such things were not possible. In 2014, a former prime minister, promoting the most significant and hazardous of all such treaties, declared: “Britain has agreed to trade deal upon trade deal and there has never been a case in the past.” An adviser on this matter described critics of “scaremongering … the truth is, ISDS has little impact on the UK much”. The overall message seemed to be that solely developing countries should be concerned by these lawsuits. Cautionary notes that “as corporations start to realise the influence they’ve been granted, they will shift their focus from the poorer states to the wealthy nations” were met with scepticism.

That prediction has come to pass. This year, fossil fuel and mining firms have initiated a historic level of claims against nations across the economic spectrum, opposing – similar to the Cumbrian coalmine – government attempts to prevent environmental catastrophe. Corporations have thus far won vast sums through ISDS, of which energy giants have been awarded the majority. That is equivalent to the combined GDP