The Commonwealth could be exposed to compensation claims for thousands of foreign-born criminals after another landmark NZYQ decision in the High Court.

The High Court on Wednesday dismissed the Government’s argument that it should have immunity from compensation claims from people held in immigration detention with “no real prospect of removal” from Australia.

The decision could open taxpayers up to further liabilities relating to more than 300 people released from detention in the so-called NZYQ cohort following a November 2023 High Court ruling.

However, legal experts warn to could also open the Commonwealth up to compensation for anyone detained since 2004 regardless of if they hold a criminal history.

Human Rights for All director principal Alison Battisson labelled the decision on Wednesday as “brutal” for the Commonwealth and explained to The Nightly it would likely prompt the government to establish a compensation scheme.

“It’s not just the NZYQ cohort. It’s thousands and it’s global,” she said.

“It could be anyone who has spent time in detention since 2004. It could relate to those in community detention too, which is hundreds if not thousands.

“Really this case is the vehicle to cases where compensation could be paid for unlawful detainment.”

Ms Battisson referred to the one-time agreement Australia made with the US to resettle refugees held in regional processing centres, as well as a private sponsorship agreement with Canada.

Shadow home affairs minister Jonno Duniam described it as “another devastating blow for a Government” and insisted the decision could lead to “tens of millions” of dollars in compensation.

“This Government failed to properly manage the legal and practical consequences of NZYQ,” Senator Duniam said.

“This is another NZYQ disaster for the Albanese Government.

“Since the original NZYQ decision, Australians have been forced to watch dangerous non-citizens released into their communities, repeated legal setbacks, and a Government constantly caught flat-footed.”

The landmark 2023 High Court decision had found it was “unconstitutional” to indefinitely detain stateless people, even if they had been convicted of a serious crime, has had serious repercussions.

The High Court ruling that the Commonwealth’s defence against any liability could not be recognised on Wednesday related to a case brought by Austrian citizen Safwat Abdel-Hady who has lived in Australia since 1997.

Mr Abdel-Hady was on various visas since his arrival in the 1990s, until it was cancelled in March 2017.

He was later detained in August 2017 before being released in 2024 after officials deemed through a 2022 health assessment that his thrombophilia made him “medically unfit to travel” on a plane.

The assessment found that he had “no real prospect of removal” from Australia “in the reasonably foreseeable future” so could not be detained.

Mr Abdel-Hady had claimed damages for “false imprisonment for the period of his detention”.

Home Affairs Minister Tony Burke wasn’t available for comment but a spokesman for the Albanese Government acknowledged the finding on Wednesday.

“The Commonwealth notes the decision of the High Court and is carefully considering the judgement and its implications,” he said.

Asylum Seeker Resource Centre’s deputy chief executive Jana Favero labelled Monday’s decision as a “critical step towards justice” for those detained for years and a “lesson” for governments.

“This is a significant outcome, because it paves the way for people to finally access justice for the cruelty inflicted on them,” she said.

“We have always said that indefinite detention is harmful and comes at the cost of people’s health, their mental health, and their wellbeing.

“Families have been separated and people are still living with the consequences of having years of their lives stolen from them.

“People who came here seeking protection have been and in many cases, still are subjected to a system that stripped them of freedom, dignity and hope.

“No government should be able to unlawfully detain people and then walk away from the damage it has caused.

“The lesson from this case is clear — this harm should never have been inflicted, and the government must ensure it never happens again.”