We investigate the effect of stellar activity and flares on short-term radial velocity measurements in the mid-M flare star CN Leo. Radial velocity variations are calculated from 181 UVES spectra obtained during three nights. We searched for spectral orders that contain very few atmospheric absorption lines and calibrated them against the telluric A-band from O2 in the Earth's atmosphere. One giant flare occurred during our observations, which has a very strong effect on radial velocity. The apparent radial velocity shift due to the flare is several hundred m s-1 and clearly correlated with Hα emission. Outside the flare, only spectral orders containing the most prominent emission lines of H, He, and Ca show a correlation to chromospheric activity together with a radial velocity jitter exceeding a few 10 m s-1. We identify a number of spectral orders that are free of strong emission lines and show no flaring-related radial velocity jitter, although flares occurred as strong as 0.4 dex in normalized Hα luminosity. The mean radial velocity jitter due to moderate flaring is less than 10 m s-1. Strong flares are easily recognized directly in the spectra and should be neglected for planet searches.