If he decides to go ahead with the new claim, his lawyers will argue that he is illegally imprisoned within a prison.
Hamzy, who is serving a 21-year prison sentence for the 1998 shooting murder of Kris Toumazis outside the Mr Goodbar nightclub in Darlinghurst, has been in segregated from other prisoners since he was allegedly discovered plotting to convert his inmates to Islam and recruit them as foot soldiers in a prison escape plan.
He has already been granted leave to take legal action against the Corrective Services Commissioner, Ron Woodham, for keeping him in isolation.
It is understood that one of his alleged recruits to the prison break-out plot, Emad Sleiman, may also claim that his confinement in Goulburn's high risk management unit is false imprisonment.
Sleiman is serving a 16-year jail term for the murder of a 25-year-old waterskiing champion, Jason Burton, in 1997.
Justice Clifton Hoeben gave Hamzy's lawyers time ask their client whether he wants to challenge the lawfulness of his current imprisonment and make a claim for false imprisonment.
If successful, the actions will infuriate the Corrective Services Commission by calling into question the legality of the High Risk Management Unit at Goulburn, and could have significant implications for prison management in New South Wales.