Victims of wrongdoing may gain quicker access to compensation thanks to a "valuable tool" clarified in a landmark decision.
Class actions have long been a way for groups of people to sue over alleged legal breaches without having to individually hire lawyers or make their case in court.
However, there can be questions around exactly how many individuals are eligible to join a class action, leading to difficulties in reaching a settlement.
This is because the person, company or entity being sued has to have a good idea of the compensation sought in a class action before it goes to the negotiating table.
The High Court has now weighed into this conundrum in a judgment released on Wednesday.
In a unanimous decision, five judges found the NSW Supreme Court could order that only those who had registered to participate in a class action would automatically get a slice of any future settlement.
Under this type of order, those who had not taken steps to register would have to seek approval from the court before they got paid.
Shine Lawyers class actions practice leader Jonathan Wertheim said the decision meant individuals who did not register could be bound by the settlement without gaining financially from it.
Typically, a settlement comes with certain conditions, including orders that the specific allegations made in a class action cannot be brought a second time after the deal gets court approval.
"This is an important decision as it confirms there is power for class closure," Mr Wertheim told AAP.
"(Class closure) is a valuable tool in appropriate cases to enable parties to negotiate settlements on a fully informed basis at an earlier stage of a proceeding."
However, the court would only make this type of order if individuals were given ample chances to register, he said.
Maurice Blackburn, one of the law firms behind the class action, welcomed the High Court's decision.
"We supported the position that courts have power to approve a notice foreshadowing a future order closing the class in appropriate cases," a spokeswoman told AAP.
The High Court's decision was made in a shareholder class action against construction and real estate firm Lendlease.
That case alleges that Lendlease misled the market and and inflated its share price by failing to disclose issues with its engineering and services business.
This led to an 18-per-cent single-day drop in its share price.
Shareholders are seeking to recover at least some of their losses.
When the lawsuit was filed in 2019, Lendlease said it would vigorously defend the proceedings.
