Class action funders and lawyers will be restricted to a maximum 30 per cent of any payout under new laws the federal government hopes will curb “disproportionate” returns at the expense of ordinary Australians involved in claims.

Treasurer Josh Frydenberg and Attorney-General Michaelia Cash will unveil an exposure draft bill on Thursday that targets commissions collected by litigation funders and the fees charged by the lawyers in a sector worth around $1 billion a year.