The UK’s biggest supermarket chain is accused of overstating its profits by £263m in September 2014 in a financial statement.
Auditors found that the discrepancy came about from Tesco booking payments from suppliers before the money was due.
Tesco suspended four people over the matter, which caused an 11% drop in shares in September 2014. The share price has fallen about 20% since 2014.
Three former Tesco executives have been charged by the Serious Fraud Office for fraud and false accounting as a result of the incident.
Bentham Europe, the company funding the legal claim from over 100 institutional funds, says Tesco has breached the Financial Services and Markets Act.
Tesco has not commented on the case.