(High Court of Justice 531/79 Likud faction in Petah Tikva Municipality v. Petah Tikva Municipal Council et al., paragraphs 2-4 (14 January 1980)).
The rule regarding the prohibition of being found in a conflict of interest: "Derived from the duty of loyalty of a public servant, and derives from the duty that applies to the authority to act in accordance with the rules of natural justice, fairly and in good faith, and to consider only relevant considerations, as opposed to personal or extraneous considerations" (Appeal Petition/Administrative Claim 3597/20 Four Desalination Islands v. State of Israel, at paragraph 24 of the judgment of the Honorable Justice A. Grosskopf (August 19, 2020)). The test for the existence of a conflict of interest is an objective test (ibid., ibid.).
However, the rule prohibiting conflict of interest is not absolute:
"With all the importance of the rule prohibiting a conflict of interest in the activity of the administrative body, this is a principle that must be realized to the extent possible, but without prejudice to the purposes of the administrative action and the practical possibility of its realization. Its application must be integrated into the administrative system, without harming its basis and goals. It is therefore necessary to apply the principle of the prohibition on conflict of interest, to the extent possible, without prejudice to the main purpose for which it was intended, and for which the administrative action is carried out. However, it is imperative that the inevitable conflict of interest be reduced to the minimum possible limits, and that it should not be allowed to grow into a "wild growth."
(High Court of Justice 3346/09 Legal Forum for the Land of Israel, Appeal against Registrar v. Minister of Education, at para. 27 (April 26, 2009)).
Therefore, even when a concern arises about the existence of a conflict of interest, this does not mean that the appointment of a person to a certain position that will place him in a situation that raises a concern of a conflict of interest, or a decision made under conditions of concern of a conflict of interest, will necessarily be disqualified: