Greetings, Overseas Tycoons and Companies! Please Proceed and Take Legal Action Against the UK for Billions of Pounds.

What is your understand our system of government works? Maybe along the lines of this. Citizens choose MPs. They debate and pass 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 Rise of Offshore Tribunals

In the modern era, international firms, along with the billionaires that control them, have the power to sue nation states for the laws they pass, at offshore tribunals made up of corporate lawyers. The cases are held in secret. Unlike our courts, these tribunals grant no avenue for appeal or legal review. The general public cannot take a case to them, nor can our government, including businesses operating from this country. The door is open exclusively to corporations registered abroad.

Should an arbitration panel determines that a law or policy may compromise the corporation’s expected profits, it has the power to grant damages of vast sums, even billions.

This compensation represent not actual losses but funds the arbitrators conclude the company would perhaps have made. The administration might be compelled to rescind the measure. It will be discouraged from enacting future policies of a similar nature, for fear of incurring a lawsuit.

A System Growing Exponentially

Historically high figures of disputes are being brought, as companies take cues from each other, and hedge funds bankroll lawsuits in return for a cut of the awards. The consequence? National sovereignty and popular rule are turning into unaffordable.

The process is called “investor-state dispute settlement” (ISDS). The rationale it is allowed to supersede a country's own laws and the choices made by legislatures is that this provision has been incorporated – without democratic mandate, and frequently under conditions of total confidentiality – within trade treaties.

A Real-World Case: The Cumbrian Coalmine

Twelve months ago, a conservation group achieved a major legal triumph at the senior court. The justice ruled that schemes to dig the first deep coalmine in the UK for three decades, at Whitehaven in Cumbria, had been illegally sanctioned by the Conservative government, which had agreed to the questionable argument that the mine would have no impact on national carbon targets. The Labour government subsequently revoked the licence the former government had issued. Currently, this legal outcome is under threat by an offshore tribunal reporting to only the corporations filing the suit.

Last August, a company whose ultimate owners are based in the Cayman Islands filed a lawsuit against the UK government. The previous week a tribunal in the US capital was established to consider the case.

The claimant is suing the UK for the money it would have generated if the mine had received permission to commence operations. We have no idea how much this could amount to. Who is serving as its counsel challenging the British government? An elected representative, and ex-law officer in the Conservative government, the self-proclaimed patriot the MP. The state passes a law, the domestic court validates it, then a overseas corporation challenges it through an undemocratic arbitration panel, and a member of our parliament acts on its behalf.

The Russian Lawsuit

On the same day that the panel on the mining lawsuit was established, information emerged from a government response that the UK is also being sued under ISDS by a Russian billionaire, an oligarch. Details are nothing of the case so far, but it appears probable that he will utilise the arbitration process to contest the restrictions the UK imposed on him after the invasion of Ukraine. He has already initiated proceedings against a small nation on these grounds, demanding sixteen billion dollars: an amount representing half state's annual revenue. Part of the legal team acting for him in that case? the wife of a former prime minister, wife of the former British prime minister.

International law scholars argue that the EU’s procrastination in utilising seized Russian assets as collateral for its loan to Ukraine stems from concerns within Belgium that it could be sued in the ISDS tribunals, under a bilateral investment treaty. This remarkable, secretive influence over sovereign states may be obstructing the finance Ukraine urgently requires.

False Assurances and Growing Threats

We were assured that these scenarios wouldn’t happen. Previously, a senior politician, advocating for the biggest and most dangerous of all investment pacts, stated: “Britain has agreed to trade agreement after trade deal and we have never seen a issue in the past.” An adviser on this issue accused campaigners of “exaggeration … in reality, ISDS has little impact on the UK much”. The general impression seemed to be that solely developing countries needed to fear such legal actions. Warnings that “when companies begin to understand the power bestowed upon them, they will redirect their efforts from the poorer states to the wealthy nations” were dismissed with scepticism.

That warning has come to pass. In the current period, oil and gas and resource corporations have lodged a historic level of claims against nations rich and poor, opposing – as in the case of the Whitehaven project – government attempts to prevent environmental catastrophe. Firms have thus far won vast sums through ISDS, of which energy giants have secured $84bn. That represents the combined GDP