This paper will examine the curious disconnect between the character requirements for legal practice in New Zealand in the 19th century and financial support stability or security and the slow progression to a requirement of solvency if an individual was to practice as a barrister or solicitor. The latter was only imposed by sections 24 and 25 of the Law Practitioners Act 1955. The paper will first consider the position of a number of 29 identifiable insolvent lawyers in the 19th century, and how they appear to have been treated by their colleagues and by society generally. It then will examine the circumstances of the passage of the Law Practitioners Act 1892, which mandated the keeping of separate trust accounts, and the influential decision of the Court of Appeal in In re Bruges (1907) 26 NZLR 541. The paper then concludes by examining the reason for the changes made by the 1955 legislation and speculating why such provisions took so long to materialise and why insolvency has been ignored in writing about the New Zealand legal profession.

In 1860 the Supreme Court judges were asked by the House of Representatives to report on matters relating to admission to the legal profession. The majority of the discussion is on matters relating to reciprocal admission rights, examinations in New Zealand law and other process issues. Nothing was said about bankruptcy and its effect on rights to practice but the judges specifically referred to the desirability of enacting a clause similar to 6&7 Vic. C 73, s 5. That provision permitted a clerk who had commenced articles with one solicitor to transfer the articles to another employer for the balance of the article period if the first solicitor had “become bankrupt or insolvent or has been in prison for debt for 21 days”. It is therefore obvious that the possibility of a solicitor being bankrupt was well-known and was not regarded as necessarily preventing the first solicitor from continuing to practice his profession.