A top Australian law firm is taking on a $300 million class action on behalf of 3000 Canterbury homeowners who feel ripped off on earthquake payouts by insurers Southern Response.

The potentially-landmark case is being launched against the Government-owned insurance company Southern Response which was launched to settle quake claims in the wake of insurer AMI's 2011 failure.

But more than 3000 have felt short-changed in their quake insurance settlements, and now they've banded together for what could be New Zealand's biggest ever class action.

Brendan and Colleen Ross, whose home in the Avondale suburb of Christchurch was badly damaged and red-zoned after the 2010 and 2011 earthquake sequence, were delighted with the announcement a litigation funding contract has been signed with Claims Funding Australia.

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"We think that the many hundreds of policyholders who didn't receive the settlements that they were entitled to, can now get access to justice, something they would never have obtained on their own. We are thrilled with this development," the couple said.

Christchurch lawyer Grant Cameron, who has led the class action, confirmed that a contract had been signed.

He said now that Claims Funding Australia is a major litigation funder and "we can now see this through to completion, no matter how long it might take".

Claims Funding Australia was created by Maurice Blackburn, Australia's leading class action law firm.

Cameron said the relationships means that the best class action minds in the Southern Hemisphere have looked closely at the matter and decided to back it.

It means that all of those Southern Response policyholders who settled before October 1, 2014 can now "seek proper redress if they now come forward".

"On the information to hand it seems there may be about 3000 affected policyholders and there could be about $300m in issue."