More than 60 businesses have joined a class action seeking around $40 million in compensation over disruption caused by Sydney's light rail project.

It is three years after construction started on the light rail network and parts of the CBD still remain closed to traffic.

The business owners say the mismanagement of the project has resulted in the loss of their jobs, homes and hope, adding their families have been "devastated forever".

The ABC has been told the claim served Tuesday in the New South Wales Supreme Court is about the unnecessary nuisance and misleading conduct of the State Government.

The group's lawyer, Rick Mitry, said he found the despair among the affected owners "disturbing".

"I can't help to think that these people need psychiatric help," he said.

"Their businesses were destroyed, they were destroyed … their confidence was destroyed."

Mr Mitry said businesses were told construction in one zone of the project would only last six to nine months, not years.

Some businesses are now claiming $4 million in losses.

Businesses say they were told construction in one zone would last as little as six months. ( AAP: Dan Himbrechts )

Mr Mitry said it was about proving that the impacts of construction are not always certain.

"The Government has a obligation to be wary of acts and omissions that are not inevitable … that are avoidable and cause damage," he said.

"Some of the shopping centres looked like ghost towns."

'Sad it's got to this': Constance

Small Business Party leader Angela Vithoulkas, who owned a George Street cafe which just closed, said the class action was about justice.

"Making sure the State Government is held accountable for the disaster that has visited the small businesses and property owners along the light rail route," she said.

"We have tried for years to communicate with the NSW Government and Transport of NSW about how much pain we have suffered."

Ms Vithoulkas owned and operated the iconic Vivo Cafe for 30 years before closing the business last week, as they could no longer afford to pay rent.

Sophie Hunt, managing director of Hunt Leather in the Stand Arcade, said she was actually excited about the project initially.

Elizabeth Hunt and Sophie Hunt said their leather goods business was flourishing before light rail construction. ( ABC News: Liv Casben )

"But two and a half years of barricades out the front, intermittent drilling, staff with migraines, bleeding noses and asthma attacks … how can you sell in that condition?" she said.

The rental assistance did not compensate for the loss in turnover, Ms Hunt said, and in most cases it was not a large sum.

She said the emotional toll had been crippling after being forced to sack staff, take on a second mortgage and endure sleepless nights.

"We've thrown everything we had at this and I'm just hoping I don't lose my house," Ms Hunt said.

Transport Minister Andrew Constance said he had not seen what had been filed to the court, but said it was "sad it's got to this".

Despite the class action, he insisted his cheque book was still open to provide rental assistance for small businesses.

"I'd say to people please keep using us, please keep coming and getting financial support," Mr Constance said.

The Government has to date handed out $9 million in rental assistance to affected businesses.

