The Federal Court is hearing a landmark case brought by 13 New South Wales local councils against international credit ratings agency Standard and Poor's.

A lawyer representing the councils, Noel Hutley SC, has told the court in Sydney that his clients were misled by the agency into losing money during the global financial crisis.

The councils, including Bathurst and Corowa shire, have accused Standard and Poor's of leading them to buy complex investments called Constant Proportion Debt Obligation Notes in 2006.

The agency gave the notes its highest investment rating, AAA, but the investments were hit hard when the financial crisis came in 2008.

The councils say they lost more than $15 million and are seeking to recoup their losses by suing Standard and Poor's.

Mr Hutley told the court the trial would run until at least the end of November and he intended to call witnesses from as far afield as London.

Standard and Poor's and global bank ABN Ambro, which issued the notes, are defending the case.

The companies this morning opposed the release of documents on the case to the media.

John Walker, from litigation funder IMF Australia, says the case is internationally significant.

"This is the first time to our understanding that a ratings agency has now been brought before a court at trial in order to respond or to defend their position concerning the ratings of these synthetic derivatives," he said.

"Around the world, we think it's the first time."