A class action against the Queensland government over a “racist” police response to an infamous death in custody, and resulting riots on Palm Island, could cost almost $40 million, lawyers claim.

A Federal Court decision in December found police were racist in responding to Cameron “Mulrunji” Doomadgee’s death and the unrest that followed, paving the way for further action.

Riot ringleader Lex Wotton and two of his family members were awarded $220,000 but the decision opened the door for many more affected members of the Palm Island community to claim compensation.

While Mr Wotton, his wife and mother were the plaintiffs, they were acting as representatives for the whole of Palm Island under the Racial Discrimination Act.

A class action notice was filed to the Federal Court on Friday, setting out details of the suit and who could claim.

Broadly speaking, the eligible “group” was Aboriginal and Torres Strait Islanders living on Palm Island when Mr Doomadgee died on November 19, 2004, who still usually lived there on March 25, 2010 but not all would be eligible, according to the notice.

Those arrested or whose homes were raided by SERT officers during the riots, or who wanted to leave or return to the island while it was in a state of emergency, could be eligible.

Levitt Robinson Solicitors senior partner Stewart Levitt, whose firm represented Mr Wotton, said close to 500 people had signed on to the class action.

He said if the lawsuit ran its course, the government could be liable for $20 million, plus almost as much in interest.

However, it was more likely the action would end in a settlement after negotiations.

“Not all of them have in-principle claims. Some of them were too remote from the situation to expect to be compensated,” Mr Levitt said.

“On the other hand there are instances where people suffered in  a manner which you wouldn’t not necessarily anticipate.

“For example where because there was a state of emergency and there was a ban on all commercial travel to and from Palm Island for a couple of days, that meant that in some instances, there was a mother that was … trapped in Palm Island when her child was in intensive care in Townsville and so forth.

“People couldn’t travel and they were traumatised by the emotional separation they experienced.”

Mulrunji died in police custody after Senior Sergeant Chris Hurley arrested him for hurling what he considered abuse.

The intoxicated 36-year-old struggled and fell with the officer, before he was “dragged limp and unresponsive into a cell” and died within an hour, according to Justice Debbie Mortimer’s December decision.

She stated police officers investigating Mulrunji’s death would have acted differently in a remote non-Aboriginal community.

It found they did not act act impartially and independently, highlighting that Senior Sergeant Hurley was never treated as a suspect and in fact, picked the investigators up from the airport and took them to his home for a meal.

A preliminary autopsy report finding Mulrunji’s death was an accident despite his four broken ribs and a liver almost cleaved in two sparked a riot, which Mr Wotton was eventually convicted of inciting.

The state government initially appealed the finding, before withdrawing in February.

A jury acquitted Senior Sergeant Hurley of Mulrunji’s manslaughter in 2007.

When contacted on Monday afternoon, police were not able to immediately respond.

A spokeswoman for Attorney-General Yvette D’ath said the notice was ordered by the Federal Court and set a deadline for people to sign up for the class action.

That deadline is June 30.

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