A judge has rejected a bid to limit participation in a class action over insurance attached to finance for car loans.

Toyota Finance Australia and Aioi Nissay Dowa Insurance asked the Victorian Supreme Court for orders that, in the case of a pre-trial settlement, only class action members who had registered would receive a payment.

Group members would have had to register within 12 weeks of the court making the order.

Two Toyota class actions are being managed together. The Petrucci action relates to finance commissions to car dealers, and the “insurance proceeding” with Glenda Walker as representative plaintiff concerns insurance underwritten by Aioi Nissay Dowa and sold through dealers.

Ms Walker alleges Toyota and Aioi engaged in misleading or deceptive conduct, unconscionable conduct, unfair conduct, unjust transactions, and provision of inappropriate personal advice with the sale of add-on insurance.

Judge Michael Osborne says both proceedings have been brought on an “open class basis”, meaning anyone falling within the defined class is automatically included unless they opt out, rather than being required to opt in.

The Petrucci group is estimated to number 519,900 and Ms Walker’s group 163,890. About 130,000 people are members of both groups.

Toyota and Aioi argued the orders were critical to negotiating a settlement because they would clarify numbers and enable them to accurately assess their exposure.

Claims go back to 2010 and many of the insurance group members would have received premium refunds, policy payouts and remediation payments, which would complicate estimates of liability.

The two class action groups countered the orders would lead to an artificially low participation rate.

Judge Osborne says the proceedings are at an early stage and the rationale for an open class action is that members can opt out rather than be required to opt in. This protects vulnerable people who may not know about the action or face barriers to giving consent.

While there is uncertainty in estimating losses, this occurs with class actions, and much is known, such as numbers of people and dates of contracts, he says.

Insurance calculations may be complicated, but sophisticated practitioners should be able to make reasonable estimates.

Read the judgment here.