Wave of ISDS cases threatened against British government COVID-19 actions

August 18, 2020: The Guardian (UK) has reported a series of law firms advising clients to use Investor-State Dispute Settlement clauses in trade and investment agreements to “recover or prevent loss resulting from COVID-19-related government actions”.

The law firm Alston & Bird used a recent webinar to predict that the UK will be sued over the London local government’s decision to close Crossrail construction sites during the pandemic.

Law firms Reed Smith and Ropes & Gray are making more general predictions that ISDS claims will emerge, hitting governments, particularly in poorer countries, and making them think twice about emergency pandemic measures.

El Salvador and Bolivia have allowed citizens to delay payments for water and electricity. Law firm Hogan Lovells has issued a client alert suggesting that foreign-owned utility companies could sue for lost revenue in such cases.

More than 600 civil society groups in 90 countries, including AFTINET and other Australian organisations, issued an open letter on June 25, 2020, sounding the alarm and urging governments to permanently restrict the use of ISDS concerning COVID-19 related measures and to review the inclusion of ISDS in all trade deals. So far governments have failed to respond.

Signatories included Oxfam, Friends of the Earth, the International Trade Union Confederation, Doctors Without Borders and hundreds of national unions, environment, church, public health and human rights groups. They warned at a “time when government resources are stretched to the limit in responding to the crisis, public money should not be diverted from saving lives, jobs and livelihoods into paying ISDS awards or legal fees to fight a claim”.