Investor-State Dispute Settlement Mechanisms

Given that ISDS mechanisms are a complicated subject, I can understand why there is some confusion surrounding them. I would like to take this opportunity to assure you that the inclusion of such provisions in trade agreements is fairly routine and has no impact on UK sovereignty.

The inclusion of investment protection provisions and associated ISDS mechanisms in trade agreements helps to protect UK investors, both large and small, from discriminatory or unfair treatment by a state. These kind of provisions are already in place within over 90 bilateral investment treaties between the UK and other countries, helping to safeguard the interests of UK businesses trading across the globe. Despite the UK’s participation in these agreements, there has never been a successful ISDS claim made against the UK, nor has the existence of such mechanisms ever prevented the Government from legislating in the interests of UK citizens and businesses.

The Government, in developing an independent trade policy for when we leave the EU, is looking at a variety of ISDS mechanisms which will form the basis of the UK’s own investor protection model. This includes the Investment Court System model, proposed for the Comprehensive Economic and Trade Agreement between the EU and Canada.