"Class actions play a critical role in our justice system, and it's important that people with meritorious claims are provided with every opportunity to have their matter heard," Ms Hennessy said on Friday.

"We're improving access to justice for ordinary Victorians by making it easier to bring class actions for silicosis, wage theft, consumer harm and other forms of corporate wrongdoing."

The new laws have opened a political battleground at both state and federal levels, where a Commonwealth inquiry is underway, between plaintiff lawyers and big business.

Former Law Council of Australia president Stuart Clark said the change will hand more money to lawyers and lead to an explosion of class actions in Victoria.

The Liberal Party brought in Mr Clark to brief crossbench MPs on behalf of business interests at a state level, and he has been contracted to lobby the federal government for a subsidiary of Washington powerbroker the US Chamber of Commerce.

"The Victorian government has just made possible the transfer of enormous amounts of compensation that would otherwise have flowed to class members and victims to the pockets of a handful of lawyers," Mr Clark said.

Liberal opposition to the Victorian move has centred on the Labor government's links to plaintiff law firms, including Labor donors Maurice Blackburn and Slater and Gordon, who have both been advocates for the new fee arrangement.

Shadow attorney-general Ed O'Donohue tried to amend the legislation on Thursday so it would include a 35 per cent cap on the settlement lawyers can obtain.

The amendment failed but the legislation has a safeguard that enable judges to determine at any stage during a case how much lawyers will be paid.

Mr O'Donohue said the new laws do nothing to improve access to justice, and "will only further enrich a small number of large, Labor-donating plaintiff law firms, including the Steve Bracks-chaired Maurice Blackburn".

The Law Institute of Victoria has backed the new fee arrangement, with president Sam Pandya saying the change increases access to justice.

Mr Pandya rejected the notion the move would be a windfall for lawyers, saying the courts will decide what percentage of the settlement plaintiffs take.

“There is oversight and there is oversight by the judiciary, by our courts,” he said.

He said it shouldn’t lead to an explosion to class actions as in in other jurisdictions that have implemented contingency fees, including the UK and Canada, that trend hasn’t occurred.

The new laws were recommended by the Productivity Commission, the Victorian Law Reform Commission and the Australian Law Reform Commission (ALRC).

A Maurice Blackburn spokesman accused the US Chamber of Commerce of running a co-ordinated and deliberate misinformation campaign to undermine the legal rights of Australians.

"The legislative changes will give Australians who suffer injustice greater access to the courts," he said.

Contingency fees are said to increase access to justice because the scheme forces lawyers to bear the cost for plaintiffs if they lose.

At the moment, lead plaintiffs are liable for defendant’s costs if they lose, meaning class actions are usually brought by lawyers on a "no-win, no-fee" basis with most plaintiffs forced to obtain insurance or the backing of a litigation funder.

Even before the change, the returns for funders and lawyers were lucrative.

The ALRC found funders were involved in about 70 per cent of proceedings and, on average, charged a commission for 30 per cent of proceeds recovered, returning just over half of the settlement to class members after legal fees.

Class actions backed by law firms, returned 85 per cent to plaintiffs and class members, ALRC said.