Judges who have a direct, personal, substantial, pecuniary interest in the outcome of a case in which the state tries to take a person’s life, liberty or property are prohibited from hearing the case under the Due Process Clause of the Fourteenth Amendment to the US Constitution. The question is not whether the best judges could act fairly despite the conflict but whether an average judge could be influenced by the conflict. If human nature might result in the financial conflict creating a risk of actual bias, the judge cannot act. The US Supreme Court has specifically held that when a judge has a pecuniary interest in the outcome of a case, the probability of actual bias is too high to be constitutional. Withrow v. Larkin, 421 U.S. 35 (1975).
The reason why judges with financial interest in the outcome of a case are prohibited from hearing the case is to make court proceedings as fair as possible so that the people will have confidence in those proceedings. To accomplish this purpose the proceedings must not only be fair, they must also appear to be fair. It has never been accepted as fair to have a judge who has a financial interest in a case decides the case. This is an ancient concept and reflects the maxim that “no man is allowed to be a judge in his own cause; because his interest would certainly bias his judgment, and, not improbably, corrupt his integrity.” The Federalist No. 10, p 59 (J. Cooke ed. 1961) (J. Madison).
The only exception to this rule is the Rule of Necessity which provides that when all persons who could act as a judge in a case have the same conflict of interest, it is necessary for those judge to do so because the case must be decided. If there is anyway, however, to have a judge without the conflict of interest hear the case, the judges with the conflict are prohibited from doing so.