Should he stay or should he go?

The price was based on an understanding that the profits for the year ending March 31, 2001 would total £30.5m. AWG subsequently decided that the profit level was wrong and that Morrison had concealed material facts during the ‘due diligence', and it might have withdrawn its bid had it known these facts.

A week before the trial, the judge, Mr Justice Evans-Lombe, was prereading the papers and found that AWG was going to call Richard Jewson, who had been a director of AWG and chairman of the AWG board's audit sub-committee, as a witness.

Mr Justice Evans-Lombe had known Jewson for more than 30 years and they lived only a mile from each other and the judge realised he would have great difficulty in dealing with the case if Jewson's truthfulness were challenged. However, replacing him with another judge at that stage would take time and delay the case.

Rather than risk delay and cost, AWG decided it would not call Jewson, but Morrison wanted the opportunity to cross-examine him and suggested that the judge should withdraw. Mr Justice Evans-Lombe thought he should stay, but allowed an appeal and the Appeal Court decided there was a risk of apparent bias if he continued.

The disadvantages of the delay were outweighed by the necessity of ensuring a fair and impartial justice system, the court ruled.

Moral: Check for conflicts of interest.