The Crown is appealing a High Court decision that a 501 deportee from Australia had several human rights breached.
It has applied to fast-track the appeal due to the potential impact of the decision on the management of deportees under current legislation.
The Crown said it will not comment further while the matter is before the court.
The case concerns a former drug dealer who was deported from Australia as a 501 - and it has opened the floodgates for others to seek justice.
The man, who has name suppression, represented himself in the High Court, arguing he should not have been labelled a returning prisoner which resulted in him being subject to parole-like conditions.
He was told where to live and give police his fingerprints when he arrived in the country in 2019 having already served a prison sentence.
Co-founder of advocacy group Route 501, Filipa Payne, has been fielding calls from former deportees wondering if they, too, can mount legal action.
"I've had an influx of people asking if it affects them, if they will be able to find out and get their names taken off the returned offenders legislation and their identification taken off the police records."
This week's High Court judgement opened the door for future claims concerning deportees' human rights, Payne said.
"This opens up a whole new realm of possible breaches against their human rights. I think they've got every opportunity to stand up and represent themself as well."
The man who went to the High Court sought a judicial review of his returning prisoner status, arguing it was unlawfully applied to him and breached his human rights - and that he'd been punished for the offending for which he'd already done his time.
The court agreed, ordering the removal of his fingerprints, DNA and photographs from the police database.
Australian-based human rights lawyer and professor of law at the Australian Catholic University Patrick Keyzer said the decision is precedent-setting.
"Any other person who has been classified as a returned prisoner under the legislation could mount a similar claim. It's a very significant judgement in my opinion."
That could extend to deportees who were imprisoned in New Zealand for breaching the parole-like conditions.
"There would be people who would not be in prison in New Zealand now but for that legislation. I'd be very surprised if others don't mount additional challenges and compensation is certainly something that people are entitled to if they are wrongfully imprisoned."
501 deportees are named after the section of Australia's Migration Act which allows the country's authorities to cancel their visa.
Anyone who is not an Australian citizen who is sentenced to 12 months' imprisonment in an Australian prison is subject to deportation, even if they have served their sentence, on grounds of not meeting a test of good character.
More than 2500 people have arrived in New Zealand as 501s since late 2014.
Nick Robinson helps to integrate people deported from Australia as 501s and said labelling them returning prisoners is common.
"Some of our guys are put onto [electronic monitoring] bracelets straight away even though they're coming back and they haven't committed any crimes in New Zealand. They're getting judged for what they've done in Australia."
Many returned to a life of crime in New Zealand and he understood the need for some deportees to have a level of police surveillance, he said.
But Robinson said that should have limits.
"I would like to see ... that they get an opportunity to be able to start again without being labelled.
"If they come back here and they're labelled as criminals straight away, that's not a fair opportunity to be able to rebuild their lives."