Lucky Ernie: from dazed old man to rich adviser

Five years ago, a doctor told the Court of Appeal that Ernest Saunders did not know how to use a door, could not count backwards from three to one and had no idea who was the President of the United States.

It was one of several pieces of evidence that pointed to a form of pre- senile dementia, described as an Alzheimer's-type of disease. The "diagnosis" was one reason why the former chairman of Guinness served just 10 months in prison for his part in the fraudulent pounds 2.7bn takeover of Distillers 10 years ago.

Today, while a mentally agile Mr Saunders is busy charging pounds 800 a day as a business consultant, the European Court of Human Rights will hand down a judgment which is expected to agree with his claim that the investigation into the affair contravened his human rights.

It will not overturn the conviction for his role in an illegal scheme to boost the price of Guinness shares during the takeover bid. It will most likely agree that the power of Department of Trade and Industry inspectors to require suspects to talk - used against Mr Saunders and threatening him with two years' imprisonment if he refused - infringes a person's right to silence.

And it will provide a platform from which the 61-year-old can launch what could be expensive compensation claim for the Government.

Yesterday, benefiting from the recovery that has baffled doctors - dementia is irreversible - Mr Saunders was in west London, back at work as usual, advising the Carphone Warehouse, one of his clients, on how to maintain its meteoric rise. It has been named as the fastest-growing company in Britain, and Mr Saunders has been given much of the credit.

It is the sort of success that has allowed him to claw his way out of the abyss and into a comfortable home, valued at pounds 250,000, in Putney, west London, and a pounds 350,000 17th-century house in Sidlesham, near Chichester. Those who know him say his consultancies, which also include advising Richbell Strategic Holdings, the publishing and information group, more than double the income he receives from his pounds 74,000 a year Guinness pension.

His co-conspirators, Gerald Ronson, the property developer, and Tony Parnes, the stockbroker, have also recovered well from brief periods in prison. Indeed, Mr Ronson, back at the helm of Ronson International, recently announced a pounds 100m deal to develop four huge projects in Madrid, Barcelona and London.

In an interview with the Daily Mail during the summer, Mr Saunders was asked about his illness and responded indignantly. "The idea that I could persuade members of the medical profession that I had this condition is disgraceful," he said. "I was ill, very ill. I was on various drugs and I lost a lot of weight. I was hardly myself. It is an insult to the medical profession to suggest that I put on some sort of act and that they were fooled by it. I resent the fact that these suggestions are made. If people are not able to accept the facts . . . what can I do?"

The doctor who expressed concern over Mr Saunders' use of a door was Dr Patrick Gallwey, a forensic psychiatrist at the Exeter Nuffield Hospital. But he was not alone. Three others, including a doctor for the prosecution, said they had similar concerns.

"We never made a diagnosis but all the doctors agreed that there was some suspicion of pre-senile dementia," said Dr Gallwey yesterday. "Happily, this turned out not to be the case. In the early stages of Alzheimer's or pre-senile dementia, it can be very difficult to make a diagnosis, so we did not make one; we expressed worries about it.

"He had an abnormality in a brain scan. It was not just a psychological examination. I haven't examined him since but, happily, he seems to have recovered."