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Can you reckon our democratic process operates? Perhaps similar to this. The public votes for MPs. They legislate on bills. Should a majority is achieved, the bills pass into law. Statutes is maintained by the courts. That's it. Yet, that’s how it used to work. Not anymore.

The Advent of Secret Tribunals

Today, foreign corporations, along with the oligarchs behind them, are able to litigate against nation states for the regulations they pass, at secret arbitration panels made up of commercial attorneys. The cases are conducted in secret. Unlike our courts, these panels grant no opportunity to appeal or oversight by judges. Ordinary citizens are barred from bringing a case to them, and neither can our government, including companies headquartered in this country. The door is open exclusively to entities based overseas.

If a tribunal finds that a legislative action could harm the corporation’s expected profits, it has the power to grant damages of hundreds of millions, potentially billions.

These sums are based not on tangible damages but compensation the tribunal officials determine the company could potentially have made. The state could be forced to abandon its policy. It will be hesitant to introducing similar legislation along the same lines, worried about incurring a lawsuit.

A Process Growing Exponentially

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 takings. The result? Sovereignty and democracy are turning into unaffordable.

The process is known as “investor-state dispute settlement” (ISDS). The reason it can trump a country's own laws and the decisions made by legislatures is that this provision has been inserted – absent public approval, and typically amid conditions of profound opacity – within trade treaties.

A Specific Instance: The Cumbrian Coalmine

Last year, environmental campaigners achieved a major legal triumph at the high court. The presiding officer found that proposals to dig the first deep coalmine in the UK for 30 years, in Cumbria, had been illegally sanctioned by the Conservative government, which had agreed to the bizarre claim that the mine could have zero effect on our carbon budgets. The new government subsequently revoked the permission the previous administration had issued. Currently, this success could be compromised by an foreign court answering to only the corporations petitioning it.

In August, a firm whose beneficial owners reside in the offshore financial centre filed a lawsuit against the UK government. The previous week a tribunal in Washington DC was convened to consider the case.

The company is seeking compensation from the UK for the money it could have earned if the mine had received permission to commence operations. We have little idea how much this might be. Who is acting on its behalf against the state? A member of parliament, and ex-law officer in the Conservative government, that great patriot the MP. The government enacts a policy, the domestic court validates it, then a foreign company challenges it through an undemocratic private court, and a elected official acts on its behalf.

A Sanctions Case

Simultaneously that the panel on the coal mine dispute was appointed, information emerged from a parliamentary answer that the UK is subject to further litigation under ISDS by a wealthy Russian individual, a sanctioned individual. The public knows nothing of the case at present, but it is highly possible that he will utilise the arbitration process to contest the restrictions the UK imposed on him following the Russian aggression. He has filed a claim against Luxembourg with similar intent, demanding sixteen billion dollars: half that nation's yearly income. Part of the legal team on his side? the wife of a former prime minister, married to the ex-UK leader.

Trade specialists contend that the EU’s procrastination in using frozen oligarchs' funds as guarantee for its financial support package arises from Belgium’s fear that it could be sued in the ISDS tribunals, under a investment pact. This extraordinary, unaccountable authority over elected governments could be blocking the funds Ukraine urgently requires.

Empty Promises and Growing Costs

The public was told that such things were not possible. Years ago, a former prime minister, promoting the most significant and hazardous of all investment pacts, told us: “Britain has agreed to trade deal upon trade deal and there has never been a problem in the past.” A consultant on this matter described campaigners of “alarmism … the truth is, ISDS barely touches the UK much”. The prevailing narrative seemed to be that exclusively weaker states had to worry about these lawsuits. Cautionary notes that “as corporations grasp the power bestowed upon them, they will shift their focus from the poorer states to the strong ones” were greeted by scepticism.

That prediction has come to pass. This year, oil and gas and mining firms have filed a historic level of suits against nations both wealthy and developing, challenging – like the example of the Whitehaven project – state efforts to halt environmental catastrophe. Firms have so far won vast sums through ISDS, of which energy giants have obtained $84bn. That is equivalent to the combined GDP